West Bengal Police Constable Special Mock Test

Indian Economy - Money & Banking

1 / 10

1) 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) B. 2,4

C) C. 2,3

D) E. 3,5

E) A. 1,5

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

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

B) Government spending, taxation, and inflation

C) Exchange rates, inflation, and trade balances

D) Money supply, interest rates, and inflation

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

A) Capital to Risk-weighted Assets Ratio

B) Cash Reserve Allowance Rate

C) Credit Risk Adjustment Rate

D) Current Reserve Assessment Ratio

4 / 10

4) 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) VAT

C) Excise duty

D) Sales tax

5 / 10

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

A) To enhance export competitiveness

B) To reduce the fiscal deficit

C) To curb inflation

D) To stimulate economic growth

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

A) All of the above

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) A and B

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

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

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

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

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

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

A) Ensures the solvency of financial institutions

B) Provides a mechanism for adjusting fiscal policy

C) Facilitates the injection and absorption of liquidity

D) Helps regulate the amount of cash banks hold

9 / 10

9) 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) A. Rs.82,650 crore

B) B. Rs.84,230 crore

C) D. Rs.86,120 crore

D) C. Rs.85,400 crore

E) E. Rs.86.225 crore

10 / 10

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

A) Cash Reserve Ratio

B) Bank Rate

C) Open Market Operations

D) Selective Credit Control

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Curriculum

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

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