CUET Economics - Macro - Money & Banking | Free Questions - Page 3

Q1:

2025: 3 June Shift 1

Macro

>

Money & Banking

Medium

Match List-I with List-II

List-I	List-II
(A) Bank Rate	(I) Securities are pledged in order to repurchase.
(B) Open Market Operations	(II) Minimum rate at which funds are provided for long term.
(C) Repo Rate	(III) Buying and selling of bonds issued by the government in open market.
(D) Reverse Repo Rate	(IV) Central bank borrows funds from commercial banks.

Choose the correct answer from the options given below:

(A) - (II), (B) - (IV), (C) - (I), (D) - (III)

(A) - (III), (B) - (II), (C) - (I), (D) - (IV)

(A) - (II), (B) - (I), (C) - (III), (D) - (IV)

(A) - (II), (B) - (III), (C) - (I), (D) - (IV)

Correct Answer

Option 4

Correct Answer

Explanation

Q2:

2025: 2 June Shift 1

Macro

>

Money & Banking

Medium

Arrange the following statements in sequential order.

(A) Rise in prices.

(B) Central Bank increases margin requirement.

(C) Situation of excess demand in the economy.

(D) Aggregate demand falls.

Choose the correct answer from the options given below:

(A), (B), (C), (D)

(C), (A), (B), (D)

(A), (C), (B), (D)

(C), (B), (D), (A)

Correct Answer

Option 2

Correct Answer

Explanation

Q3:

2025: 2 June Shift 1

Macro

>

Money & Banking

Easy

Comprehension:

Read the passage carefully and answer the questions based on the passage:

RBI Monetary Policy

The Reserve Bank of India, in its monetary policy meet decided to keep the key policy rates unchanged after two emergency rate cuts amid the COVID-19 disruptions and its ensuing economic fall out. Consequently, the repo rate stands unchanged at 4% and the reverse repo rate at 3.35%. RBI noted that the economic activity had started to recover from the lows of April-May. Meanwhile, migrant labor is returning to work in urban areas, and factories and construction activities are coming back to life. This is also reflected in rising levels of energy consumption and population mobility. In cities, traffic intensity is rising rapidly; online commerce is booming; and people are getting back to offices. The mood of the nation has shifted from fear and despair to confidence and hope. Some of this optimism is being reflected in people’s expectations. In September 2020, round of the RBI’s survey, households expects inflation to decline modestly over the next three months, indicative of hope that supply chains are mending.

The Reserve Bank of India (RBI) __________ government securities in a bid to ________ the stock of money in the economy.

sells; decrease

purchases; decrease

sells; increase

purchases; not change

Correct Answer

Option 1

Correct Answer

Explanation

Q4:

2025: 2 June Shift 1

Macro

>

Money & Banking

Easy

Comprehension:

Read the passage carefully and answer the questions based on the passage:

RBI Monetary Policy

The Reserve Bank of India, in its monetary policy meet decided to keep the key policy rates unchanged after two emergency rate cuts amid the COVID-19 disruptions and its ensuing economic fall out. Consequently, the repo rate stands unchanged at 4% and the reverse repo rate at 3.35%. RBI noted that the economic activity had started to recover from the lows of April-May. Meanwhile, migrant labor is returning to work in urban areas, and factories and construction activities are coming back to life. This is also reflected in rising levels of energy consumption and population mobility. In cities, traffic intensity is rising rapidly; online commerce is booming; and people are getting back to offices. The mood of the nation has shifted from fear and despair to confidence and hope. Some of this optimism is being reflected in people’s expectations. In September 2020, round of the RBI’s survey, households expects inflation to decline modestly over the next three months, indicative of hope that supply chains are mending.

A cut in Repo Rate would lead to __________ in Money Supply and a cut in Reverse Repo Rate would lead to __________ in deposits of commercial bank to RBI

increase; increase

decrease; decrease

decrease; increase

increase; decrease

Correct Answer

Option 4

Correct Answer

Explanation

Q5:

2025: 2 June Shift 1

Macro

>

Money & Banking

Easy

Comprehension:

Read the passage carefully and answer the questions based on the passage:

RBI Monetary Policy

The Reserve Bank of India, in its monetary policy meet decided to keep the key policy rates unchanged after two emergency rate cuts amid the COVID-19 disruptions and its ensuing economic fall out. Consequently, the repo rate stands unchanged at 4% and the reverse repo rate at 3.35%. RBI noted that the economic activity had started to recover from the lows of April-May. Meanwhile, migrant labor is returning to work in urban areas, and factories and construction activities are coming back to life. This is also reflected in rising levels of energy consumption and population mobility. In cities, traffic intensity is rising rapidly; online commerce is booming; and people are getting back to offices. The mood of the nation has shifted from fear and despair to confidence and hope. Some of this optimism is being reflected in people’s expectations. In September 2020, round of the RBI’s survey, households expects inflation to decline modestly over the next three months, indicative of hope that supply chains are mending.

Why did Monetary Policy Committee keep its policy rate unchanged in its recent meet?

Due to recovery of economic activities.

To avoid unnecessary deflation.

Because of irrational decision of committee.

To reduce economic activities.

Correct Answer

Option 1

Correct Answer

Explanation

Q6:

2025: 2 June Shift 1

Macro

>

Money & Banking

Easy

Comprehension:

Read the passage carefully and answer the questions based on the passage:

RBI Monetary Policy

The Reserve Bank of India, in its monetary policy meet decided to keep the key policy rates unchanged after two emergency rate cuts amid the COVID-19 disruptions and its ensuing economic fall out. Consequently, the repo rate stands unchanged at 4% and the reverse repo rate at 3.35%. RBI noted that the economic activity had started to recover from the lows of April-May. Meanwhile, migrant labor is returning to work in urban areas, and factories and construction activities are coming back to life. This is also reflected in rising levels of energy consumption and population mobility. In cities, traffic intensity is rising rapidly; online commerce is booming; and people are getting back to offices. The mood of the nation has shifted from fear and despair to confidence and hope. Some of this optimism is being reflected in people’s expectations. In September 2020, round of the RBI’s survey, households expects inflation to decline modestly over the next three months, indicative of hope that supply chains are mending.

Which of the following is not a monetary measure adopted by Reserve Bank of India?

Change in Cash Reserve Ratio.

Change in Bank Rate.

Change in Public Expenditure.

Change in Open Market Operations.

Correct Answer

Option 3

Correct Answer

Explanation

Q7:

2025: 2 June Shift 1

Macro

>

Money & Banking

Easy

Comprehension:

Read the passage carefully and answer the questions based on the passage:

RBI Monetary Policy

The Reserve Bank of India, in its monetary policy meet decided to keep the key policy rates unchanged after two emergency rate cuts amid the COVID-19 disruptions and its ensuing economic fall out. Consequently, the repo rate stands unchanged at 4% and the reverse repo rate at 3.35%. RBI noted that the economic activity had started to recover from the lows of April-May. Meanwhile, migrant labor is returning to work in urban areas, and factories and construction activities are coming back to life. This is also reflected in rising levels of energy consumption and population mobility. In cities, traffic intensity is rising rapidly; online commerce is booming; and people are getting back to offices. The mood of the nation has shifted from fear and despair to confidence and hope. Some of this optimism is being reflected in people’s expectations. In September 2020, round of the RBI’s survey, households expects inflation to decline modestly over the next three months, indicative of hope that supply chains are mending.

Repo Rate is the rate at which.

Commercial banks purchase government securities from the central bank.

Commercial banks can take loans from the central bank.

Commercial banks can keep their deposits with the central bank.

Short term loans are given by commercial banks.

Correct Answer

Option 2

Correct Answer

Explanation

Q8:

2025: 31 May Shift 1

Macro

>

Money & Banking

Medium

Why does central bank is called the lender of last resort?

It lends money to the government to finance its budget deficit.
Central bank lends money to trade and industry to support their export operations.
When a country runs out of money, the central bank prints more money.
Central bank lends money to banks at all times.

It lends money to the government to finance its budget deficit.

Central bank lends money to trade and industry to support their export operations.

When a country runs out of money, the central bank prints more money.

Central bank lends money to banks at all times.

Correct Answer

Option 4

Correct Answer

Explanation

Q9:

2025: 31 May Shift 1

Macro

>

Money & Banking

Medium

Suppose there is a fresh deposit of Rs. 10,000 in banks and cash reserve ratio is 0.5. How much is total deposit creation?

20,000
50,000
10,000
5000

20,000

50,000

10,000

5000

Correct Answer

Option 1

Correct Answer

Explanation

Q10:

2025: 31 May Shift 1

Macro

>

Money & Banking

Easy

Arrange the following in chronological order.

(A) Barter System

(B) Currency notes

(C) Precious metals

(D) Online transfer of money.

Choose the correct answer from the options given below:

(A), (B), (C), (D)
(A), (C), (B), (D)
(B), (A), (D), (C)
(C), (B), (D), (A)

(A), (B), (C), (D)

(A), (C), (B), (D)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer

Option 2

Correct Answer

Explanation

Q11:

2025: 31 May Shift 1

Macro

>

Money & Banking

Medium

If the market rate of interest is already low enough so that everybody expects it to rise in future, causing capital losses, nobody will wish to hold bonds. This situation is called.............

Jevons Paradox
Liquidity trap
Paradox of thrift
Double coincidence of wants

Jevons Paradox

Liquidity trap

Paradox of thrift

Double coincidence of wants

Correct Answer

Option 2

Correct Answer

Explanation

Q12:

2025: 31 May Shift 1

Macro

>

Money & Banking

Medium

Match List-I with List-II

List-I	List-II
(A) Percentage of deposits that a bank keep as reserve with Central Bank	(I) Reserves + Loan.
(B) Banks Assets	(II) Central Bank of a country.
(C) Lender of the last Resort	(III) Aggregate Monetary Resources.
(D) M₃	(IV) Cash Reserve Ratio.

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)
(A) - (IV), (B) - (I), (C) - (II), (D) - (III)
(A) - (I), (B) - (II), (C) - (IV), (D) - (III)
(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (IV), (B) - (I), (C) - (II), (D) - (III)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Correct Answer

Option 2

Correct Answer

Explanation

Q13:

2025: 30 May Shift 2

Macro

>

Money & Banking

Medium

Which statement is not true for M3 as a measure of money supply.

M3 is known as Aggregate Monetary Resources.

M3 is the most commonly used measure of money supply.

M3 = M4 - Total deposits with Post Office savings organizations (excluding National Savings Certificates).

M3 = M1 + Saving deposits with a post office savings bank.

Correct Answer

Option 4

Correct Answer

Explanation

Q14:

2025: 30 May Shift 2

Macro

>

Money & Banking

Medium

Match List-I with List-II

List-I	List-II
(A) Buying and selling of bonds	(I) Transaction Motive
(B) Hold money is to carry out expenses	(II) Open Market Operations
(C) The number of times a unit of money changes hands during the unit period	(III) Velocity of circulation
(D) Hold money in terms of bonds	(IV) Speculative Motive

Choose the correct answer from the options given below:

(A) - (II), (B) - (I), (C) - (III), (D) - (IV)

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Correct Answer

Option 1

Correct Answer

Explanation

Q15:

2025: 30 May Shift 2

Macro

>

Money & Banking

Medium

Arrange the following in ascending order in respect of evolution of money.

(A) Coin exchanges.

(B) Barter exchanges.

(C) E-money.

(D) Paper currency.

Choose the correct answer from the options given below:

(B), (A), (C), (D)

(A), (B), (C), (D)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer

Option 3

Correct Answer

Explanation

Q16:

2025: 30 May Shift 2

Macro

>

Money & Banking

Easy

Demonetization refers to :

Restricting money supply in the economy by the government.

Restricting new currency and coin printing by the government.

Declaring any existing hard currency or coins as no longer a legal tender for some time.

Declaring all or few existing hard currency or coins as no longer a legal tender forever.

Correct Answer

Option 4

Correct Answer

Explanation

Q17:

2025: 30 May Shift 2

Macro

>

Money & Banking

Easy

When the Reserve Bank of India was established?

1932

1933

1934

1935

Correct Answer

Option 4

Correct Answer

Explanation

Q18:

2025: 30 May Shift 1

Macro

>

Money & Banking

Medium

Instead of outright sale of securities, the Central Bank may sell securities through an agreement which has a specification about the date and price at which it will be repurchased. This type of agreement is called . The rate at which money is withdrawn in this manner is called.

open market operations, bank rate.

open market operations, repo rate.

repurchase agreement, repo rate.

reverse repurchase agreement, reverse repo rate.

Correct Answer

Option 4

Correct Answer

Explanation

Q19:

2025: 30 May Shift 1

Macro

>

Money & Banking

Medium

Quantitative instruments of monetary policy focus on :

(A) Quantity of money across selected sectors of the economy.

(B) Overall supply of money in the economy.

(C) Credit creation capacity of commercial banks.

(D) Inflationary and deflationary gaps in the economy.

Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (C) and (D) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 4

Correct Answer

Explanation

Q20:

2025: 30 May Shift 1

Macro

>

Money & Banking

Medium

Match List-I with List-II

List-I	List-II
(A) Secondary Deposits	(i) Initial deposits with commercial banks
(B) Primary Deposits	(ii) The ratio of money held by the public in currency to that held at deposits in commercial banks.
(C) Currency Deposit ratio	(iii) No intrinsic value
(D) Fiat money	(iv) Demand deposits which come back to Commercial bank through lending process.

Choose the correct answer from the options given below:

(A) - (i), (B) - (IV), (C) - (ii), (D) - (III)

(A) - (IV), (B) - (i), (C) - (ii), (D) - (III)

(A) - (III), (B) - (i), (C) - (ii), (D) - (IV)

(A) - (III), (B) - (IV), (C) - (i), (D) - (II)

Correct Answer

Option 2

Correct Answer

Explanation

Q21:

2025: 30 May Shift 1

Macro

>

Money & Banking

Medium

Which of th following system is followed by the Reserve Bank of India for issuing currency?

Proportionate system.

Minimum Reserve System.

Simple Deposit System.

Fixed fiduciary issue System.

Correct Answer

Option 2

Correct Answer

Explanation

Q22:

2025: 30 May Shift 1

Macro

>

Money & Banking

Medium

Arrange the following steps involved in the process of credit creation by Commercial Banks.

(A) The commercial bank lends the excess reserves to the borrowers.

(B) The borrowers deposit the loaned money in the bank.

(C) The bank keeps a portion of the lent deposit money as reserve.

(D) The initial deposit is made in the commercial bank.

Choose the correct answer from the options given below:

(B), (C), (D), (A)

(A), (D), (C), (B)

(D), (C), (A), (B)

(D), (B), (C), (A)

Correct Answer

Option 3

Correct Answer

Explanation

Q23:

2025: 30 May Shift 1

Macro

>

Money & Banking

Easy

Electronic transfer of money in terms of credit/ debit entries of the account-holders in the banks is called____.

e-marketing.

e-business.

e-fund.

e-banking.

Correct Answer

Option 4

Correct Answer

Explanation

Q24:

2025: 29 May Shift 2

Macro

>

Money & Banking

Medium

Match List-I with List-II

List-I	List-II
(A) $M_1$	(I) $M_1$ + Net time deposits of commercial banks
(B) $M_3$	(II) Assets - Liabilities
(C) Net Worth	(III) 1/CRR
(D) Money Multiplier	(IV) Currency + Demand Deposit

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (IV), (B) - (I), (C) - (II), (D) - (III)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Correct Answer

Option 2

Correct Answer

Explanation

Q25:

2025: 29 May Shift 2

Macro

>

Money & Banking

Medium

Consider the following steps taken by the Reserve Bank of India with respect to money supply and arrange them in the appropriate sequence.

(A) Increase in lending rates by commercial banks.

(B) Contraction in credit.

(C) Increase in bank rates by the Reserve bank of India.

(D) Increase in cost of borrowings by commercial banks.

Choose the correct answer from the options given below:

(A), (B), (C), (D)

(A), (C), (B), (D)

(C), (D), (A), (B)

(C), (B), (D), (A)

Correct Answer

Option 3

Correct Answer

Explanation

Q26:

2025: 29 May Shift 2

Macro

>

Money & Banking

Easy

At a given cash reserve ratio of 50% with deposits of ₹ 1000, the amount which can be used to give loans by the bank.

₹ 50

₹ 500

₹100

₹1000

Correct Answer

Option 2

Correct Answer

Explanation

Q27:

2025: 29 May Shift 2

Macro

>

Money & Banking

Easy

Suppose, in a hypothetical economy, the cash reserve ratio is 20% and initial deposits are Rs.100. The value of money which a bank can use to give as a loan in the first round would be

80

100

120

90

Correct Answer

Option 1

Correct Answer

Explanation

Q28:

2025: 29 May Shift 2

Macro

>

Money & Banking

Medium

Arrange the following statements in chronological order with respect to open market operation.

(A) Bonds payments increases total reserves in the economy.

(B) RBI buys government bonds from the market.

(C) RBI sell bond if there is excess money supply.

(D) Higher reserves Increase money supply in the economy.

Choose the correct answer from the options given below:

(A), (B), (C), (D)

(A), (C), (B), (D)

(B), (A), (D), (C)

(D), (A), (C), (B)

Correct Answer

Option 3

Correct Answer

Explanation

Q29:

2025: 29 May Shift 1

Macro

>

Money & Banking

Medium

Suppose a bank has an initial deposit of ₹200. The required cash reserve ratio is 20%. Then what will be the total money supply in an economy?

Correct Answer

Option 3

Correct Answer

Explanation

Q30:

2025: 29 May Shift 1

Macro

>

Money & Banking

Medium

During deficient demand, RBI __________ the margin.

Decrease.

Increase.

Constant.

Either Increase or Decrease.

Correct Answer

Option 1

Correct Answer

Explanation

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