Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): M1 is the least liquid measure of money supply.
Reason (R): M1 includes the currency in circulation, demand deposits with the bank and other deposits with the RBI.
Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): Demand deposits are not legal tenders.
Reason (R): They are with the bank, so only can be used as a legal tender when cheques are issued for the transfer.
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Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): M4 is the least liquid measure of money supply.
Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.
Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): Money serves as a unit of account, providing a standard measure for valuing goods and services.
Reason (R): Money facilitates barter transactions by eliminating the need for a double coincidence of wants.
Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): The banking system plays a critical role in money creation, which is essential for economic growth.
Reason (R): Banks can lend more than the amount they have on deposit due to the fractional reserve banking system.
Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): The Statutory Liquidity Ratio (SLR) is essential for ensuring that banks maintain a certain level of liquid assets.
Reason (R): A higher SLR allows banks to lend more money to customers, thereby increasing overall credit in the economy.
Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): The Reserve Bank of India plays a crucial role in controlling the money supply through various monetary policy tools.
Reason (R): The tools include changing the Cash Reserve Ratio (CRR), conducting open market operations, and adjusting the bank rate.
Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): The Central Bank employs Open Market Operations (OMOs) to control the liquidity in the economy.
Reason (R): OMOs involve the buying and selling of government securities to influence the money supply.
Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as
Assertion (A): The speculative demand for money increases when interest rates are expected to fall in the future.
Reason (R): People prefer to hold money rather than bonds to avoid capital losses when they expect interest rates to rise.
Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): The introduction of new currency notes during demonetisation aimed to increase the formal economy's transparency.
Reason (R): Demonetisation led to a temporary cash shortage, which prompted individuals to adopt digital payment methods.
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