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Banking Sector: Inflation & RBI- 2


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20 Questions MCQ Test Indian Economy for UPSC CSE | Banking Sector: Inflation & RBI- 2

Banking Sector: Inflation & RBI- 2 for UPSC 2022 is part of Indian Economy for UPSC CSE preparation. The Banking Sector: Inflation & RBI- 2 questions and answers have been prepared according to the UPSC exam syllabus.The Banking Sector: Inflation & RBI- 2 MCQs are made for UPSC 2022 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Banking Sector: Inflation & RBI- 2 below.
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Banking Sector: Inflation & RBI- 2 - Question 1

The base year to calculate CPI-AL is

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 1

The base year to calculate CPI-AL is 1986-87 and 260 items are included in the index.

Banking Sector: Inflation & RBI- 2 - Question 2

The base year to calculate CPI-UNME is

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 2

The base year to calculate CPI-UNME is 1984-85. 180 items are included in the index.

Banking Sector: Inflation & RBI- 2 - Question 3

 Consider the following statements and identify the right ones.
i. RBI has the sole right to issue currency notes
ii. Minimum reserve system has been replaced by proportional reserve system

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 3

Proportional reserve system has been replaced by minimum reserve system.

Banking Sector: Inflation & RBI- 2 - Question 4

Which of the following is not a function of RBI?

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 4

RBI performs central banking functions as well as development and promotional functions.

Banking Sector: Inflation & RBI- 2 - Question 5

 Consider the following statements and identify the right ones.
i. RBI provides advice in all monetary matters except agriculture and industrial finance.
ii. RBI is obliged to transact business of central government and state governments including J&K

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 5

RBI provides advice in all monetary matters including agriculture and industrial finance. RBI is obliged to transact business of central government and state governments excluding J&K.

Banking Sector: Inflation & RBI- 2 - Question 6

Consider the following statements and identify the right ones.
i. RBI acts as clearing house for commercial banks.
ii. It also grants license for setting up banking operations

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 6

RBI is also responsible for regulating banks, directs their credit policies and provides advice to them.

Banking Sector: Inflation & RBI- 2 - Question 7

The amount a bank needs to maintain in form of cash, gold and other securities before giving credit is

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 7

The amount a bank needs to maintain in form of cash, gold and other securities before giving credit is called SLR.

Banking Sector: Inflation & RBI- 2 - Question 8

The percentage of demand and time liabilities that banks have to keep with RBI is

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 8

The percentage of demand and time liabilities that banks have to keep with RBI is called cash reserve ratio.

Banking Sector: Inflation & RBI- 2 - Question 9

Consider the following statements and identify the right ones.
i. RBI is the custodian of foreign exchange reserves of the country.
ii. It also keeps the exchange rate of domestic currency at stable level.

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 9

RBI is responsible for transaction of the currencies of IMF countries.

Banking Sector: Inflation & RBI- 2 - Question 10

 Which of the following is not a function of RBI?

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 10

RBI has a set of supervisory functions too.

Banking Sector: Inflation & RBI- 2 - Question 11

For bank rate to be effective, which of the following conditions are to be fulfilled?

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 11

Bank rate is the rate at which banks can borrow from RBI when in need of funds.

Banking Sector: Inflation & RBI- 2 - Question 12

The buying, selling of treasury bills, government and other securities by RBI is called

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 12

CRR, SLR and OMO are various tools in the hands of RBI to influence money supply in the economy.

Banking Sector: Inflation & RBI- 2 - Question 13

Which of the following is a union tax?
 

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 13

Union taxes are given in the list of 7th schedule in the constitution.

Banking Sector: Inflation & RBI- 2 - Question 14

Which of the following is not a union tax?

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 14

Taxes levied by the state government include Sales tax, VAT, tax of land & buildings, tax of agricultural income, stamp duty, luxury tax, dividend distribution tax  and entertainment tax. 

Banking Sector: Inflation & RBI- 2 - Question 15

 Consider the following statements and identify the right ones.
i. Central government does not have exclusive power to impose tax which is not mentioned in state or concurrent list.
ii. The constitution also provides for transferring certain tax revenues from union list to states.

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 15

Central government has exclusive power to impose tax which is not mentioned in state or concurrent list.

Banking Sector: Inflation & RBI- 2 - Question 16

The tax levied by the union government on income of individuals is known as

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 16

It is based on the principle of ability to pay. The tax levied by the union government on income of individuals is known as income tax.

Banking Sector: Inflation & RBI- 2 - Question 17

The tax on net income of companies is

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 17

The tax on net income of companies is corporate tax. Tax rates are uniform for all categories of companies.

Banking Sector: Inflation & RBI- 2 - Question 18

Consider the following statements and identify the right ones.
i. Wealth tax is collected from productive as well as unproductive assets
ii. Estate duty was a type of inheritance tax of large estates

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 18

Wealth tax is collected from unproductive assets only. Estate duty was abolished in 1985.

Banking Sector: Inflation & RBI- 2 - Question 19

 Which of the following taxes is/are withdrawn or abolished?

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 19

Interest tax was withdrawn in 2000-01, estate duty abolished in 1985 and gift tax in 1998-99.

Banking Sector: Inflation & RBI- 2 - Question 20

The most important source of revenue to the states is

Detailed Solution for Banking Sector: Inflation & RBI- 2 - Question 20

Sales tax is the tax on sale of goods and is influenced by the value added tax system.

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