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Thursday, 1 October 2015

Banking Awareness Quiz: Monetary Policy

1. Bank rate policy, open market operations, variable reserve requirements and statutory liquidity requirements as measures of credit control are classified as
(a) Quantitative methods
(b) Qualitative methods
(c) Weighted average methods
(d) None of the above
(e) both (a) and (b)

2. Which of the following fall under the qualitative method of credit control adopted by RBI?
(a) Selective credit control 
(b) Moral suasion 
(c) Credit authorization scheme  
(d) All of the above  
(e) None of the above

3. In periods of boom, which leads to economic instability RBI resorts to
(a)Sale first class securities in its precession in the market, to reduce the supply of money as a measure of open market operations 
(b) Buying of approved securities in the market as a measure of open market operation 
(c) Like in the bank rate as is measure of open market operations 
(d) None of the above 
(e) All of the above

4. Cash reserve ratio is maintained in the form of
(a) Government securities  
(b)Balance with RBI  
(c) Balance with state bank of India 
(d) All of the above 
(e) None of the above

5. Which is the authority in India for effecting changes in the cash reserve ratio and statutory liquidity ratio?
(a)  Government of India   
(b)  RBI   
(c)  Indian banks Association 
(d) CRR and SLR association 
(e) None of the above

6. Bank rate means
(a) The rate of interest charged by the bank on advances  
(b) The rate of interest paid by banks on the deposits 
(c) The standard rate at which the RBI is prepared to buy or to rediscount eligible bills of exchange or other commercial papers of commercial banks   
(d) None of the above     
(e) All of the above 

7. In the opinion of the Governor of Reserve Bank of India, which one of the following is the reason owing to which India’s inflation is accelerating?
(a) Excess liquidity in market 
(b) Speculation in essential goods 
(c) Higher food Cost
(d) Commodities futures  
(e) None of these

8) When Reserve Bank intends to increase credit by the banking system, it
(a) Reduces the bank rate        
(b) Raises the bank rate
(c) Freezes the bank rate                        
(d) None of these          
(e) All of these

9)  What does the term Open Market Operations refer to?
(a) Selling of equities in the open market
(b) Selling of commodities in the open market
(c) Buying and selling of government securities in the open market

(d) Buying and selling of products in the wholesale market

(e) None of these

10) ______is the percentage of total deposits of a bank which it has to keep with itself in the form of liquid assets. 

(a) Statutory Liquidity Ratio (SLR)    
(b) Cash Reserve Ratio (CRR) 
(c) Statutory Reserve Ratio            
(d) Cash Ratio
(e) None of these

Answers --

1)  a
2) d
3) a
4) b
5) b
6) c
7) a
8) a
9) c
10) a 

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