CUET Economics - Macro - Money & Banking | Free Questions - Page 7

Q1:

2023: 28 May Shift 2

Macro

>

Money & Banking

Easy

The RBI can influence money supply by changing __________ at which it gives loan to the commercial Banks.

Promissory Rate

Lending Rate

Fixed Rate

Bank Rate

Correct Answer

Option 4

Correct Answer

Explanation

Q2:

2023: 28 May Shift 2

Macro

>

Money & Banking

Medium

Arrange the following statements relating to open market operations in the correct sequence.

(A) There by resulting in an increase in money supply

(B) Central bank pays for it by giving a cheque

(C) Central bank buys a government bond in the open market

(D) This increases the total amount of reserves in the economy

Choose the correct answer from the options given below :

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

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

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

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

Correct Answer

Option 4

Correct Answer

Explanation

Q3:

2023: 28 May Shift 2

Macro

>

Money & Banking

Easy

RBI can influence money supply by changing the Bank rate. An increase in Bank rate can be termed as :

Contractionary monetary policy

Expansionary monetary policy

Contractionary fiscal policy

Expansionary fiscal policy

Correct Answer

Option 1

Correct Answer

Explanation

Q4:

2023: 28 May Shift 2

Macro

>

Money & Banking

Easy

When Cash Reserve Ratio is 20% then with the deposit of Rs 1000, Money creation will be Rs 5000, Money multiplier is :

0.5

0.05

5

1/5

Correct Answer

Option 3

Correct Answer

Explanation

Q5:

2022: 30 Aug Shift 2

Macro

>

Money & Banking

Medium

In a situation of Excess Demand.

Choose the correct option.

(A) Cash reserve ratio should decrease

(B) Bank rate should increase

(C) Statutory Liquidity Ratio should increase

(D) Statutory Liquidity Ratio should decrease

Choose the correct answer from the options given below :

(A) and (B) only

(B) and (C) only

(C) and (A) only

(D) and (B) only

Correct Answer

Option 2

Correct Answer

Explanation

Q6:

2022: 30 Aug Shift 2

Macro

>

Money & Banking

Easy

In India currency notes are issued by the Reserve Bank of India (RBI) which is the monetary authority of India. However, coins are issued by the government of India. Apart from currency notes and coins, balance in savings or current account deposits held by the public in commercial bank is also considered money. Since cheques drawn on these accounts are used to settle transaction such deposits are called demand deposit. They are payable by the bank on demand. Other deposits, eg. fixed deposits, have a fixed period of maturity and are therefore referred to as time deposit.

In India currency notes are issued by _______.

Government of India

Commercial Banks

Reserve Bank of India

State Bank of India

Correct Answer

Option 3

Correct Answer

Explanation

Q7:

2022: 30 Aug Shift 2

Macro

>

Money & Banking

Easy

In India currency notes are issued by the Reserve Bank of India (RBI) which is the monetary authority of India. However, coins are issued by the government of India. Apart from currency notes and coins, balance in savings or current account deposits held by the public in commercial bank is also considered money. Since cheques drawn on these accounts are used to settle transaction such deposits are called demand deposit. They are payable by the bank on demand. Other deposits, eg. fixed deposits, have a fixed period of maturity and are therefore referred to as time deposit.

In India coins are issued by _______.

RBI

State Bank of India

SEBI

Government of India

Correct Answer

Option 4

Correct Answer

Explanation

Q8:

2022: 30 Aug Shift 2

Macro

>

Money & Banking

Easy

In India currency notes are issued by the Reserve Bank of India (RBI) which is the monetary authority of India. However, coins are issued by the government of India. Apart from currency notes and coins, balance in savings or current account deposits held by the public in commercial bank is also considered money. Since cheques drawn on these accounts are used to settle transaction such deposits are called demand deposit. They are payable by the bank on demand. Other deposits, eg. fixed deposits, have a fixed period of maturity and are therefore referred to as time deposit.

_______ are deposits which have a fixed period of maturity.

Demand deposits

Time deposits

Saving deposits

Current deposits

Correct Answer

Option 2

Correct Answer

Explanation

Q9:

2022: 30 Aug Shift 2

Macro

>

Money & Banking

Easy

In India currency notes are issued by the Reserve Bank of India (RBI) which is the monetary authority of India. However, coins are issued by the government of India. Apart from currency notes and coins, balance in savings or current account deposits held by the public in commercial bank is also considered money. Since cheques drawn on these accounts are used to settle transaction such deposits are called demand deposit. They are payable by the bank on demand. Other deposits, eg. fixed deposits, have a fixed period of maturity and are therefore referred to as time deposit.

Who among the following is responsible for controlling money supply in the economy ?

Commercial banks

Government of India

Ministry of Finance

Reserve Bank of India

Correct Answer

Option 4

Correct Answer

Explanation

Q10:

2022: 30 Aug Shift 2

Macro

>

Money & Banking

Easy

In India currency notes are issued by the Reserve Bank of India (RBI) which is the monetary authority of India. However, coins are issued by the government of India. Apart from currency notes and coins, balance in savings or current account deposits held by the public in commercial bank is also considered money. Since cheques drawn on these accounts are used to settle transaction such deposits are called demand deposit. They are payable by the bank on demand. Other deposits, eg. fixed deposits, have a fixed period of maturity and are therefore referred to as time deposit.

Deposits which are payable on demand are called _______.

Fixed deposits

Time deposits

Demand deposits

Current deposits

Correct Answer

Option 3

Correct Answer

Explanation

Q11:

2022: 10 Aug Shift 2

Macro

>

Money & Banking

Easy

Identify the correct statements regarding money supply

(A) Money supply is a stock concept.

(B) Money supply is a flow concept.

(C) Money supply is the currency (cash and coins) with the public and demand deposit in banks.

(D) Money supply is the currency held with banks.

(E) Money supply is the concept of real flow.

Choose the correct answer from the options given below :

(A) and (C)

(A) and (D)

(B) and (E)

(C) and (D)

Correct Answer

Option 1

Correct Answer

Explanation

Q12:

2022: 10 Aug Shift 2

Macro

>

Money & Banking

Easy

Identify the quantitative tools used by RBI to control money supply.

(A) Moral Suasion

(B) Bank Rate

(C) Cash Reserve Ratio

(D) Open Market Operations

(E) Margin requirement

Choose the correct answer from the options given below :

(A) only

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

(B) and (C) only

(A) (D) and (E) only

Correct Answer

Option 2

Correct Answer

Explanation

Q13:

2022: 10 Aug Shift 2

Macro

>

Money & Banking

Easy

If the reserve ratio is 10% and the initial deposit with the commercial banks are Rs. 450 cr, the total money creation by the banking system will be :

Rs. 4,000 Cr

Rs. 5,000 Cr

Rs. 3,500 Cr

Rs. 4,500 Cr

Correct Answer

Option 4

Correct Answer

Explanation

Q14:

2022: 10 Aug Shift 2

Macro

>

Money & Banking

Medium

Match List - I with List - II.

List - I (Financial Terms)	List - II (Examples)
(A) Monetary Base	(I) Loans extended by banks
(B) Assets	(II) Reserve Bank of India
(C) Liabilities	(III) Currency
(D) Credit control	(IV) Deposits accepted by the banks

Choose the correct answer from the options given below :

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

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

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

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

Correct Answer

Option 2

Correct Answer

Explanation

Q15:

2022: 10 Aug Shift 2

Macro

>

Money & Banking

Easy

Which of the following is a function of RBI ?

Accepting deposits from general public

Giving loans to general public

Banker to the government

Credit creation

Correct Answer

Option 3

Correct Answer

Explanation

Q16:

2022: 10 Aug Shift 2

Macro

>

Money & Banking

Easy

Which of the following is not a function of the Central Bank ?

Bank rate

Open market operation

Lender of last resort

Deficit financing

Correct Answer

Option 4

Correct Answer

Explanation

Q17:

2022: 10 Aug Shift 2

Macro

>

Money & Banking

Medium

Which among the following is not a part of Qualitative measure of Monetary Policy of RBI ?

Margin Requirement

Moral Suasion

Reverse Repo Rate

Selective Credit Control

Correct Answer

Option 3

Correct Answer

Explanation

Q18:

2022: 19 July Shift 2

Macro

>

Money & Banking

Medium

Economics all across the globe are facing the problem of deficient demand post covid 19. Such a situation in India can be corrected by : (Choose the correct alternative).

Selling government securities to the Commercial Banks by the Reserve Bank of India.

Raising of the margin requirements by the Reserve Bank of India.

Reducing the reverse repo rate by the Reserve Bank of India.

Raising of the bank rate by the Reserve Bank of India.

Correct Answer

Option 3

Correct Answer

Explanation

Q19:

2022: 19 July Shift 2

Macro

>

Money & Banking

Medium

Identify the incorrect statement.

(A) Money is what money does

(B) There are many assets which carry functions of money

(C) In modern sense, money creates instability

(D) The first and foremost role of money is that it acts as medium of exchange

(E) Money acts only as convenient unit of account

Choose the correct answer from the options given below :

(A) and (B) only

(C) and (E) only

(C) and (D) only

(D) ands (E) only

Correct Answer

Option 2

Correct Answer

Explanation

Q20:

2022: 19 July Shift 2

Macro

>

Money & Banking

Easy

Buying and selling of government securities by the Reserve Bank of India to the public is called :

Margin Requirement

Bank Rate

Open Market Operations

Repo Rate

Correct Answer

Option 3

Correct Answer

Explanation

Q21:

2022: 19 July Shift 2

Macro

>

Money & Banking

Medium

Match List - I with List - II.

List - I (Banking)	List - II (Function)
(A) Commercial Bank	(I) Long term lending rate by RBI
(B) Reserve Bank of India	(II) Short term lending rate by RBI
(C) Bank Rate	(III) Credit creation
(D) Repo Rate	(IV) Lender of last resort

Choose the correct answer from the options given below :

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

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

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

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

Correct Answer

Option 2

Correct Answer

Explanation

Q22:

2022: 19 July Shift 2

Macro

>

Money & Banking

Medium

Suppose in an economy, the legal Required ratio fixed by the Central Bank is 20% and the value of initial deposits is $\overline{\mathbf{\tau}}$ 1000 crores. What is the value of loans extended by the Commercial Banks ?

$\overline{\mathbf{\tau}}$ 5,000 crores

$\overline{\mathbf{\tau}}$ 4,000 crores

$\overline{\mathbf{\tau}}$ 2,000 crores

$\overline{\mathbf{\tau}}$ 20,000 crores

Correct Answer

Option 2

Correct Answer

Explanation

Q23:

2022: 19 July Shift 2

Macro

>

Money & Banking

Medium

High powered money comprises of :

Notes and coins in circulation with Public and Vault cash of Commercial Banks and deposits held by Government and Commercial Banks with RBI.

Notes and coins in circulation with Public and deposits held by Government.

Currency and deposits held by bank with RBI.

Notes and Vault cash of Commercial Banks.

Correct Answer

Option 1

Correct Answer

Explanation

Q24:

2022: 16 July Shift 2

Macro

>

Money & Banking

Medium

Identify the correct statements from the following:

A. Currency is issued by the nation's Central Bank

B. To address the budget deficit, Central Bank sends money to the government

C. The economy's foreign exchange reserves are preserved by Central Bank

D. Central Bank does not control money supply and credit through monetary policy

E. Central Bank gives loans to the commercial Banks for short term

Choose the correct answer from the options given below :

(B) (C) (D) (E) only

(A) (B) (C) (D) only

(B) (C) (D) (A) only

(A) (B) (C) (E) only

Correct Answer

Option 4

Correct Answer

Explanation

Q25:

2022: 16 July Shift 2

Macro

>

Money & Banking

Easy

Commercial banks have generated Rs. 12,000 crores and CRR is 25%. Initial payments will be in the amount of:

Rs. 48,000 crores

Rs. 6,000 crores

Rs. 3,000 crores

Rs. 30,000 crores

Correct Answer

Option 3

Correct Answer

Explanation

Q26:

2022: 16 July Shift 2

Macro

>

Money & Banking

Easy

In a time of deflation, the Central Bank should:

Lower the Bank rate and purchase securities

Increase the Bank rate and purchase securities

Lower the Bank rate and sell securities

Increase the Bank rate and sell securities in the open market

Correct Answer

Option 1

Correct Answer

Explanation

Q27:

2022: 15 July Shift 2

Macro

>

Money & Banking

Medium

What will be the amount of initial reserves if Cash Reserve Ratio (CRR) is 20 % and total credit creation is Rs 500?

Rs 400

Rs 450

Rs 200

Rs 100

Correct Answer

Option 4

Correct Answer

Explanation

Q28:

2022: 15 July Shift 2

Macro

>

Money & Banking

Medium

The currency issued by the Reserve Bank of India is called.

A. High powered money

B. Reserve money

C. Bank money

D. Monetary base

E. Fiscal base

Choose the correct answer from the options given below:

A, B and D only

B, C and E only

C, D and E only

A, C and E only

Correct Answer

Option 1

Correct Answer

Explanation

Q29:

2022: 15 July Shift 2

Macro

>

Money & Banking

Medium

Identify which of the following measures taken by RBI will increase the money supply.

A. Increase in Cash Reserve Ratio

B. Decrease in Cash Reserve Ratio

C. Selling of a government bond

D. Buying of a government bond

E. Decrease in Bank Rate

Choose the correct answer from the options given below:

A and C only

B and D only

A,C and E only

B,D and E only

Correct Answer

Option 4

Correct Answer

Explanation

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