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 modern currency is used as a medium of exchange; however, it does not have a use of its own.
Reason (R): Modem currency is easy to carry
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 Multiplier refers to the process of creation of credit by the commercial Bank.
Reason (R): Money creation by commercial bank raises the National Income
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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: To curb inflation , the RBI should sell the Government securities.
Reason: When RBI will sell Government securities to the people and commercial banks then money will flow to RBI which reduces the lending capacity of commercial banks.
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): An increase in CRR results in decrease in the value of Multiplier.
Reason (R): Banks lend money many times more than their cash reserves.
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 monetary policy is a policy formulated by the central bank.
Reason (R): The policy involves measures taken to regulate the supply of money, availability, and cost of 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: Central bank uses many tools such as Bank rate, repo rate, reverse repo rate etc. to control money supply in the economy.
Reason: Commercial bank is the apex Bank of India.
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): Size of multiplier is given by the inverse of LRR
Reason(R): There is direct relationship between LRR and value of money multiplier
Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion: The Central Bank as a Supervisor regulates and controls the commercial banks. The control is exercised by periodic inspection of banks and the returns filed by them.
Reason: The RBI has fined Induslnd Bank Rs.4.5 crore for non-compliance of certain norms like Exposure norms, Prudential Norms on Income Recognition etc., among others. RBI has clarified that the deficiencies were in regulatory compliance and not in customer bank transactions. — The Financial Express, 18 October 2020.
Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion- To reduce the volume of credit, bank rate should be reduced.
Reason- A rise in bank rate implies that the cost of money would go up.
Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion - Central Bank is the ‘Lender of last Resort’.
Reason - It is ready to lend to banks, when bank faced severe crises. If central bank refuses, there is no option for the banks but to shut down.
Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion: The Reserve bank of India had in march 2020,offered a three month moratorium on loans enabling borrowers to defer repayments on EMI and other loans.
Reason: The loan moratorium was aimed at providing borrowers relief aimed the economic impact of the covid-19 pandemic.
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 issues currency on the basis of CRR.
Reason ( R ) The CRR impacts credit creation capacity of the commercial bank.
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): Supply of money is a stock variable
Reason (R): Supply of money is measured over a period of time, usually a fiscal year
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 ) : in order to maintain the faith of depositors in the banking system, it is sufficient for the commercial banks to keep only a small part of deposits as cash Reserves.
Reason ( R ) : A change in Reserve requirement affects the power of commercial bank to create the credit.
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