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CUET Economics 2025 PYQs14 May Shift 1. Free, no login required.

Macro

past year questions, CUET Economics 2025 14 May Shift 1

Money & Banking

past year questions, Macro, CUET Economics 2025 14 May Shift 1

Medium

Comprehension:

Money and Banking

Exchange of commodities without the mediation of money is called barter exchange. It requires double coincidence of wants. Money facilitates exchanges by acting as a commonly acceptable medium of exchange. In a modern economy, people hold money broadly for two motives – transactive motive and speculative motive. Supply of money, on the other hand, consists of currency notes and coins, demand and time deposits held by commercial banks, etc. It is classified as narrow and broad money according to the decreasing order of liquidity. In India, the supply of money is regulated by the Reserve Bank of India (RBI) which acts as the monetary authority of the country. The commercial banks of the country and RBI are responsible for changes in the supply of money in the economy. RBI regulates money supply by controlling the stock of high powered money, the rate and reserve requirements of the commercial banks.

Reserve Bank of India (RBI) is also known as by which other name.

Solution

✅ Correct Option: 1

Option 1 -> RBI is the apex monetary institution that regulates India's banking and financial system.

Option 2 -> Commercial banks are retail banks like SBI, HDFC that provide banking services to the public.

Option 3 -> Cooperative banks are formed on cooperative principles and serve specific communities or groups.

Option 4 -> Regional rural banks are specialized banks created to serve rural and agricultural sectors.

Hence, Option 1: Central Bank -> The Reserve Bank of India is officially known as the Central Bank of India. It was established in 1935 and acts as the country's monetary authority, regulator of the banking system, issuer of currency, and manager of foreign exchange. As the central bank, RBI controls monetary policy, supervises commercial banks, manages government securities, and maintains financial stability in the economy.-> correct

More from this set:

Question 46

The classification of money in terms of narrow and broad money is due to .....

Question 47

The bank rate and reserve money are the monetary tools of RBI to regulate the money flow with ...........

  1. Cooperative banks
  2. External banks
  3. Central bank
  4. Commercial banks

Question 49

What is the principal motive for holding money?

Question 50

Which system requires double coincidence of wants?

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