Banking General Awareness Money Market and Capital Market Question Bank

done Practice Questions - Money Supply Total Questions - 38

• question_answer1)
  Rupee coins are the legal tender in India under the provisions of
  A)
   Reserve Bank of India Act, 1934 done clear
  B)
   Negotiable Instruments Act, 1881 done clear
  C)
   Banking Regulation Act, 1949 done clear
  D)
   Indian Coinage Act, 1906 done clear
  E)
   None of these done clear
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• question_answer2)
  In India, the system of decimal coinage was introduced on
  A)
   15th August, 1947 done clear
  B)
   26th January, 1950 done clear
  C)
   1st April, 1957 done clear
  D)
   All of the above done clear
  E)
   None of these done clear
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• question_answer3)
  Which of the following statements is/are correct?

  i. Data on \[{{M}_{0}}\]are published on monthly basis

  ii. Data on \[{{M}_{1}}\]and \[{{M}_{3}}\]are available on weekly basis

  A)
   (i) only             done clear
  B)
   (ii) only done clear
  C)
   both (i) and (ii)              done clear
  D)
   none done clear
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• question_answer4)
  In terms of Section 24 of the Reserve Bank of India Act, 1934, the Reserve Bank of India may issue bank notes for the maximum  denomination of
  A)
   Rs. 500                         done clear
  B)
   Rs. 5000 done clear
  C)
   Rs. 10000                     done clear
  D)
   Rs. 1000 done clear
  E)
   None of these done clear
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• question_answer5)
  The minting of rupee coin is governed by
  A)
   Coinage Act, 1906 done clear
  B)
   Reserve Bank of India Act, 1934 done clear
  C)
   Banking Regulation Act, 1949 done clear
  D)
   Currency Act, 1902 done clear
  E)
   None of these done clear
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• question_answer6)
  One rupee notes and coins are issued by
  A)
   Reserve Bank of India done clear
  B)
   State Bank of India on behalf of Government of India done clear
  C)
   Government of India done clear
  D)
   Finance Minister of Central Government done clear
  E)
   None of these done clear
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• question_answer7)
  The monetary authority in India, viz Reserve Bank of India, is bound to maintain a reserve against the notes issued, whatever may be the amount. This system is called is
  A)
   minimum reserve system done clear
  B)
   proportional reserve system done clear
  C)
   maximum fiduciary issue system done clear
  D)
   simple deposit system done clear
  E)
   None of these done clear
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• question_answer8)
  One rupee notes bear the signature of
  A)
   Governor of Reserve Bank of India done clear
  B)
   Prime Minister of India done clear
  C)
   President of India done clear
  D)
   Secretary, Ministry of Finance (Government of India) done clear
  E)
   None of these done clear
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• question_answer9)
  The note-issue system in India is based on
  A)
   Gold Deposit System done clear
  B)
   Minimum Reserve System done clear
  C)
   Proportional Reserve System done clear
  D)
   Simple Deposit System done clear
  E)
   None of these done clear
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• question_answer10)
  The Indian rupee is a
  A)
   taken coin done clear
  B)
   standard-token coin done clear
  C)
   standard coin done clear
  D)
   gold coin done clear
  E)
   None of these done clear
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• question_answer11)
  Which of the following about money supply measures adopted in 1977 is correct?
  A)
   M2= Ml +demand deposits with post offices done clear
  B)
   M3= Ml +term deposits with banks done clear
  C)
   M4=M3+total deposits with post offices done clear
  D)
   All the above done clear
  E)
   None of these done clear
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• question_answer12)
  The approved assets against which currency notes are issued by RBI comprise of
  A)
   gold coin and billion and rupee coin done clear
  B)
   foreign securities and Government of India rupee securities of any maturity done clear
  C)
   bills of exchange and promissory notes payable in India which are eligible for purchase by RBI done clear
  D)
   All of the above done clear
  E)
   None of these done clear
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• question_answer13)
  Who is the final authority for deciding the design, form and material of bank notes?
  A)
   Central Government done clear
  B)
   Reserve Bank of India done clear
  C)
   Indian Banks Association done clear
  D)
   Note Issuing Authority of India done clear
  E)
   None of these done clear
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• question_answer14)
  Whenever somebody needs foreign currency against Indian Rupee, banks give equivalent amount of desired currency based on prevalent?
  A)
   Bank rate                      done clear
  B)
   Currency rate done clear
  C)
   Policy rate                    done clear
  D)
   Exchange rate done clear
  E)
   Base rate done clear
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• question_answer15)
  Which one of the following is the' major component of the money supply in the Indian Economy?
  A)
   Currency component done clear
  B)
   Deposit component done clear
  C)
   Treasury bill with public done clear
  D)
   Both [a] and [b] done clear
  E)
   Both [b] and [c] done clear
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• question_answer16)
  The first decimal issues of coins in 1950 in India consisted of
  A)
   1, 2 and 5 paise done clear
  B)
   1, 2, 5 and 10 paise done clear
  C)
   1, 2, 5, 10 and 25 paise done clear
  D)
   1, 2, 5, 10, 25 and 50 paise done clear
  E)
   1, 2, 5, 10, 25 and 50 paise along with Rs.1 done clear
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• question_answer17)
  In India, Fixed Fiduciary System of note issue was in force from
  A)
   1816 to 1920    done clear
  B)
   1920 to 1945 done clear
  C)
   1945 to 1950    done clear
  D)
   1947 to 1952 done clear
  E)
   1965 to 1972 done clear
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• question_answer18)
  Which one of the following methods is currently used in India to issue note?
  A)
   Fixed Fiduciary System done clear
  B)
   Maximum Fiduciary System done clear
  C)
   Proportional Reserve System done clear
  D)
   Percentage Reserve System done clear
  E)
   Minimum Reserve System done clear
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• question_answer19)
  On 25th September, 1975, rupee was delinked from pound sterling and was linked to
  A)
   US dollar                      done clear
  B)
   gold done clear
  C)
   basket of currencies        done clear
  D)
   All of these done clear
  E)
   None of these done clear
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• question_answer20)
  The Reserve Bank of India began production of notes in 1938, issuing Rs. 25,10,1000 notes. Rs. 500 note was re-introduced again in
  A)
   1987                            done clear
  B)
   2000 done clear
  C)
   2003                            done clear
  D)
   2006 done clear
  E)
   2010 done clear
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• question_answer21)
  Who decides on the quantity of coins to be minted?
  A)
   The Government of India done clear
  B)
   RBI done clear
  C)
   SBI done clear
  D)
   All of the above done clear
  E)
   None of these done clear
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• question_answer22)
  Under Bretton Woods System, as a member of IMF, India declared its par value of rupee in terms of
  A)
   British pound                 done clear
  B)
   US dollar done clear
  C)
   A basket of currency       done clear
  D)
   Gold done clear
  E)
   None of these done clear
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• question_answer23)
  The merit of issuing notes with RBI can be seen is
  A)
   uniformity                     done clear
  B)
   stability in currency done clear
  C)
   control of credit done clear
  D)
   All of these done clear
  E)
   None of these done clear
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• question_answer24)
  The association of the rupee with pound sterling as the intervention currency was broken in
  A)
   1990                            done clear
  B)
   1991 done clear
  C)
   1992                            done clear
  D)
   1993 done clear
  E)
   None of these done clear
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• question_answer25)
  Currency notes and coins are called Fiat money because
  A)
   they do not have intrinsic value like gold or silver. done clear
  B)
   they are made on special imported paper. done clear
  C)
   they are printed by government. done clear
  D)
   they exchange for goods and services. done clear
  E)
   None of these done clear
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• question_answer26)
  If banks and the private sector decide to hold less cash, the money multiplier will be
  A)
   unchanged      done clear
  B)
   larger done clear
  C)
   smaller          done clear
  D)
   unstable done clear
  E)
   None of these done clear
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• question_answer27)
  Which of the following is/are correct for Money Market?
  A)
   It is a short-term credit market. done clear
  B)
   It is regulated by the Reserve Bank of India done clear
  C)
   It consists of borrowers and lenders of short-term funds. done clear
  D)
   All the above done clear
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• question_answer28)
  Which of the following is/are Money Market instruments?
  A)
   Treasury Bills done clear
  B)
   Commercial Papers done clear
  C)
   Certificate of Deposit done clear
  D)
   All the above done clear
  E)
   None of these done clear
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• question_answer29)
  Treasury bills (T-bills) issued by the Government of India consists of three types, namely
  A)
   91-day             done clear
  B)
   182-day done clear
  C)
   364-day            done clear
  D)
   All the above done clear
  E)
   None of these done clear
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• question_answer30)
  Which of the following is/are not correct about government securities?
  A)
   It is also called the gilt edged securities. done clear
  B)
   It comprises of dated securities issued by the Government of India done clear
  C)
   Government of India manages these securities. done clear
  D)
   [b] and [c] done clear
  E)
   None of these done clear
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• question_answer31)
  When was the demonetization happened in India for the first time?
  A)
   1946                            done clear
  B)
   2016 done clear
  C)
   1978                            done clear
  D)
   1949 done clear
  E)
   None of these done clear
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• question_answer32)
  Which of the following statements is/are correct?

  i. A soiled note is a single numbered note cut into two pieces but on which both the numbers are intact.

  ii. Soiled notes can be tendered only at RBI.

  iii. Clean Note Policy in 2001 was introduced under Section 28 of the Reserve Bank of India Act, 1934.

  A)
   ii only                           done clear
  B)
   i and iii done clear
  C)
   ii and iii            done clear
  D)
   i, ii and iii done clear
  E)
   None of these done clear
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• question_answer33)
  The act of stimulating the economy by increasing the money supply or by reducing taxes is called
  A)
   demand pull inflation done clear
  B)
   stagflation done clear
  C)
   disinflation done clear
  D)
   headline inflation done clear
  E)
   None of these done clear
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• question_answer34)
  Which of the following laws was used to amend Reserve Bank of India Act, 1934 (RBI Act) for maintaining price stability?
  A)
   Finance Act, 2016 done clear
  B)
   Finance Act, 2015 done clear
  C)
   Finance Act, 2014 done clear
  D)
   Finance Act, 2013 done clear
  E)
   None of these done clear
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• question_answer35)
  Which of the following statements is/are correct?

  i. Bank rate is the rate at which RBI gives loan to commercial banks without keeping any collateral.

  ii. Marginal Cost of funds based Lending Rate (MCLR) will replace the present base rate system.

  A)
   i only done clear
  B)
   ii only done clear
  C)
   i and ii done clear
  D)
   None of these done clear
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• question_answer36)
  The RBI policy which allows banks to borrow  money  through  repurchase agreements is called
  A)
   Liquidity adjustment facility done clear
  B)
   Loan adjustment facility done clear
  C)
   Finance adjustment facility done clear
  D)
   Liquidity maturity facility done clear
  E)
   None of these done clear
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• question_answer37)
  Capital Market deals in
  A)
   long-term debt   done clear
  B)
   equity claims done clear
  C)
   government securities      done clear
  D)
   all the above done clear
  E)
   None of these done clear
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• question_answer38)
  Mutual Fund can benefit from economy of scale because of
  A)
   portfolio diversification done clear
  B)
   risk reduction done clear
  C)
   large volume of trades done clear
  D)
   All of the above done clear
  E)
   None of thee done clear
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