West Bengal Police Constable Special Mock Test

Indian Economy - Money & Banking

1 / 10

1) Which of the following is a qualitative tool of monetary policy?

A) Cash Reserve Ratio

B) Open Market Operations

C) Bank Rate

D) Selective Credit Control

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2) Which of the following is a direct tax that affects the disposable income of individuals and can influence the money supply?

A) Income tax

B) Excise duty

C) VAT

D) Sales tax

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3) he following statements have two blanks which are to be filled with the options given
below. Choose the correct combination of words in the same order which will most
suitably complete the sentence without altering the meaning of the statement.
The increased use of computers will ______________ the need for further recruitment of
________________ in the banking sector.
1. Captivate
2. Necessitate
3. Obviate
4. Youngsters
5. Staf

A) C. 2,3

B) E. 3,5

C) D. 2,5

D) B. 2,4

E) A. 1,5

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4) What role does the Liquidity Adjustment Facility (LAF) play in the monetary policy framework?

A) Provides a mechanism for adjusting fiscal policy

B) Ensures the solvency of financial institutions

C) Facilitates the injection and absorption of liquidity

D) Helps regulate the amount of cash banks hold

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5) The Fisher Effect describes the relationship between which of the following?

A) Money supply, interest rates, and inflation

B) Nominal interest rates, real interest rates, and inflation

C) Government spending, taxation, and inflation

D) Exchange rates, inflation, and trade balances

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6) The Reserve Bank of India (RBI) infused liquidity amounting to ______ into the banking
system via the 14-day Variable Repo Rate (VRR) auction amid tightening liquidity

A) C. Rs.85,400 crore

B) B. Rs.84,230 crore

C) A. Rs.82,650 crore

D) E. Rs.86.225 crore

E) D. Rs.86,120 crore

7 / 10

7) Which of the following statements regarding NBFCs(Non-Banking Finance Company)
is correct

A) A CIC having an asset size of Rs.100 crore & above and which has accessed public funds would be treated as systemically important core investment company (CICND-S

B) Every CIC-ND-SI is required to obtain Certificate of Registration (COR) from RBI under Section 45-IA of the Reserve Bank of India Act, 1934

C) A and B

D) CIC-ND-SI is not required to fulfill the criteria of having minimum net owned fund (i.e. rupees two crores) subject to adherence to other prudential norms

E) All of the above

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8) In the context of banking, what does 'CRAR' stand for?

A) Cash Reserve Allowance Rate

B) Capital to Risk-weighted Assets Ratio

C) Credit Risk Adjustment Rate

D) Current Reserve Assessment Ratio

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9) Which of the following best explains the concept of 'Money Multiplier'?

A) It is the ratio of the base money to the total money supply.

B) It is the total money supply in an economy divided by the GDP.

C) It represents the multiple by which deposits can increase based on the reserve ratio.

D) It measures the impact of liquidity on the economy.

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10) In which scenario would the Central Bank increase the repo rate?

A) To curb inflation

B) To enhance export competitiveness

C) To reduce the fiscal deficit

D) To stimulate economic growth

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Curriculum

Indian Economy (Money & Banking I অর্থ ও ব্যাংকিং I)

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