SSC Economics Sample Paper NCERT Sample Paper-2

  • question_answer
    What is the main function of banking department of Reserve Bank of India?

    A) To do banking business with customers

    B) To provide liquidity to the economy and absorb liquidity

    C) To issue the currency in circulation and its Withdrawal from circulation

    D) None of the above

    Correct Answer: C

    Solution :

    The Banking department of RBI looks after the banking operations. It takes care of the currency in circulation and its withdrawal from circulation. Issuing new currency is known as expansion of currency and withdrawal of currency is known as contraction of currency.

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