ECONOMICS – BANKING – GENERAL QUESTIONS
/in Mock Test /by Noushad ChengodanTest-summary
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Read questions thoroughly and trace out the right answer from the options given below.
Each question carries 1 marks
Total time allotted 20 minutes
After the exam look review and read and learn the right answer with explanation
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- Question 1 of 15
1. Question
1 pointsGender Inequality Index (GII) was developed by:
CorrectGender indexes such as the Global Gender Gap Index of the World Economic Forum (WEF) or the Gender Inequality Index (GII) of the United Nations Development Program (UNDP) rank countries in chronological time.
Incorrect - Question 2 of 15
2. Question
1 pointsA reduction in the reverse repo rate generally indicates that:
1. Market rate of interest is likely to increase
2. Central bank is following tight money policy
3. Inject liquidity into the system
4. Commercial banks may lend more
Select the correct statementsCorrectReduction in the reverse repo rate encourages commercial banks to lend more instead of keeping money with the RBI as the return from it (reverse repo rate) is falling. It will inject more money / liquidity into the system. It is part of easy / soft money policy.
Incorrect - Question 3 of 15
3. Question
1 pointsWhich of the following is the regulator of the credit rating agencies in India?
CorrectThe Securities and Exchange Board of India is the regulator of the securities and commodity market in India owned by the Government of India. It was established on 12 April 1988 and given Statutory Powers on 30 January 1992 through the SEBI Act, 1992.
Incorrect - Question 4 of 15
4. Question
1 pointsWho is the author of the book titled ‘The Quest For A World Without Hunger’?
CorrectMankombu Sambasivan Swaminathan is an Indian geneticist and international administrator, renowned for his leading role in India’s Green Revolution.
Incorrect - Question 5 of 15
5. Question
1 pointsConsider the following statements on farming sector of India:
1. Agriculture also matters for economic reasons because it still accounts 16 percent of GDP and 30 percent of employment.
2. Poor agricultural performance can lead to inflation, farmer distress and unrest, and larger political and social disaffection – all of which can hold back the economy.
Select the correct statements:CorrectThe 1st statement is NOT Correct. Agriculture also matters for economic reasons because it still accounts for a substantial part of GDP (16 percent) and employment (49 percent) not 30 percent.
Incorrect - Question 6 of 15
6. Question
1 pointsWhat will be the impact on the Cash Reserves of commercial banks if RBI conduct a sale of securities?
CorrectSale of securities by RBI absorbs excess liquidity from the market / fall in the cash reserves of commercial banks.
Incorrect - Question 7 of 15
7. Question
1 pointsUnder which qualitative tool, RBI fixes maximum limit to loan and advances that can be made, above which the commercial banks cannot exceed:
CorrectCentral Bank fixes credit amount to be granted. Credit is rationed by limiting the amount available for each commercial bank. This method controls even bill rediscounting. For certain purpose, upper limit of credit can be fixed and banks are told to stick to this limit. This can help in lowering banks credit exposure to unwanted sectors.
Incorrect - Question 8 of 15
8. Question
1 pointsReverse Repo Rate is a tool used by RBI to:
CorrectReverse Repo Rate: The rate at which the RBI is willing to borrow from the commercial banks is called reverse repo rate. If the RBI increases the reverse repo rate, it means that the RBI is willing to offer lucrative interest rate to commercial banks to park their money with the RBI. This results in a reduction in the amount of money available for the bank’s customers as banks prefer to park their money with the RBI as it involves higher safety. This naturally leads to a higher rate of interest which the banks will demand from their customers for lending money to them, thereby causing reduction in liquidity.
Incorrect - Question 9 of 15
9. Question
1 pointsConsider the following liquid assets:
1. Demand deposits with the banks
2. Time deposits with the bank
3. Savings deposits with the bank
4. Currency
The correct sequence of aforesaid assets in the decreasing order of liquidity is:CorrectThe most liquid asset, and what everything else is compared to, is cash or currency. This is because it can always be used easily and immediately.
Incorrect - Question 10 of 15
10. Question
1 pointsIn an economy, head count ratio is the measure of:
CorrectWhen the number of poor is estimated as the proportion of people below the poverty line, it is known as ‘Head Count Ratio’.
Incorrect - Question 11 of 15
11. Question
1 pointsWhich among the following is/are the qualitative tools to control credit creation by RBI?
1. Open Market Operations
2. Repo Rate
3. Moral Suasion
4. Direct Action
Select the correct answer using the code given below:CorrectVarious methods used by central bank to control creation can be divided into quantitative and qualitative methods.
Qualitative methods are:
Margin Requirements
Regulation of consumer Credit
Credit Rationing Policy
Direct Action
Moral Suasion / Persuasion
While quantitative methods include the following:
Open Market Operation
Repo Rate
Variable Reserve Ratio
Bank Rate Policy.Incorrect - Question 12 of 15
12. Question
1 pointsWhich of the following constitutes the primary sector of the economy?
1. Fishing
2. Animal Husbandry
3. Mining
4. Forestry
Select the correct answer using the code given below:CorrectThe primary sector of the economy is the sector of an economy making direct use of natural resources. This includes agriculture including animal husbandry, forestry, fishing and mining. In contrast, the secondary sector produces manufactured goods, and the tertiary sector produces services. The primary sector is usually most important in less-developed countries, and typically less important in industrial countries.
Incorrect - Question 13 of 15
13. Question
1 pointsWhich one of the following groups of items is included in India’s forex reserve
CorrectForeign exchange reserve is consisting of foreign currency assets, gold, Special Drawing Rights (SDR), and reserve position in the IMF. India’s foreign exchange reserves rose $7.78 billion to touch a record high of $568.5 billion in the week ended Nov. 6, 2020
Incorrect - Question 14 of 15
14. Question
1 pointsWhich of the following is/are the characteristics of recession?
1. General fall in demand
2. High inflation
3. Fall in employment rate
Select the correct answer using the code given below.CorrectRecession is a mild form of depression, the major traits of which are:
General fall in demand as economic activities take a down turn.
Low inflation, showing further signs of falling down.
Fall in employment rate.
Price cuts by industries to sustain their business.Incorrect - Question 15 of 15
15. Question
1 pointsThe official data on poverty released in India is estimated on the basis of consumption expenditure data collected by:
CorrectThe official data on poverty released in India is estimated on the basis of consumption expenditure data collected by National Sample Survey Organisation (NSSO).
Incorrect
