West Bengal Police Constable Special Mock Test

Indian Economy - Money & Banking

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

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

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

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

A) Government spending, taxation, and inflation

B) Exchange rates, inflation, and trade balances

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

D) Money supply, interest rates, and inflation

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

A) Helps regulate the amount of cash banks hold

B) Ensures the solvency of financial institutions

C) Provides a mechanism for adjusting fiscal policy

D) Facilitates the injection and absorption of liquidity

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

A) To stimulate economic growth

B) To curb inflation

C) To reduce the fiscal deficit

D) To enhance export competitiveness

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

A) Excise duty

B) Sales tax

C) Income tax

D) VAT

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

A) Capital to Risk-weighted Assets Ratio

B) Current Reserve Assessment Ratio

C) Cash Reserve Allowance Rate

D) Credit Risk Adjustment Rate

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

A) A and B

B) 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

C) 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

D) 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

E) All of the above

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8) 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) B. Rs.84,230 crore

B) C. Rs.85,400 crore

C) E. Rs.86.225 crore

D) A. Rs.82,650 crore

E) D. Rs.86,120 crore

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

A) Cash Reserve Ratio

B) Open Market Operations

C) Selective Credit Control

D) Bank Rate

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10) 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) D. 2,5

B) A. 1,5

C) E. 3,5

D) B. 2,4

E) C. 2,3

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Curriculum

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

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