Money and Banking

Money can perform which of the following function(s)?
1. Medium of exchange.
2. A convenient unit of account.
3. To act as a store of value for individuals
Choose the correct answer from the options given below:

Consider the following statements:
1. A cashless society describes an economic state whereby financial transactions through money in the form of physical bank notes or coins have been completely eradicated.
2. In India government has been consistently investing in various reforms for greater degree of cashless economy.
The correct statement(s) is/are:

‘National Financial Switch’ is mentioned in the context of:

The relation of demand of money with economic transaction is:

Consider the following statements:
1. India’s central bank was established after the independence from foreign rule.
2. Apart from discharging other important regulatory functions, the central bank also acts as a banker to the central as well as state governments.
The correct statement(s) is/are:

Which of the following function(s) are discharged by the Reserve Bank of India (RBI)?
1. Issuing the currency of the country.
2. Controlling money supply of the country through various methods.
3. Acting as a banker to the government.
4. It is the custodian of the foreign exchange reserves of the economy.
5. It acts as a bank to the banking system.
Choose the correct answer using the options given below:

‘High-powered money’ is that quantum of money which is held by:

Which of the following is correct with respect to term “Spread” in context of monetary policy?

Consider the following statements:
1. Commercial banks mediate between individuals or firms with excess funds and lend to those who need funds.
2. People prefer to keep money in banks because they think their money would be safe with banks only.
The correct statement(s) is/are:

Which of the following is/are an asset for a commercial bank?

Consider the following statements:
1. RBI puts limitation upon the credit creation capability of banks through its regulatory powers.
2. Cash Reserve Ratio (CRR) is the percentage of deposits which a bank must keep as cash reserves with RBI.
The correct statement(s) is/are:

Consider the following statements:
1. RBI is legally mandated to lend the commercial banks at any time under any circumstances.
2. The RBI uses both qualitative and quantitative tools to control money supply in the market.
The correct statement(s) is/are:

What is/are motive/s of people in holding money:
1. Transaction Motive i.e. to carry out day to day transactions.
2. Speculative Motive i.e. to make investments.
Identify the correct statements:

Consider the following statements regarding money:
1. Currency notes and coins are called fiat money.
2. This means that if someone produces the note to RBI, or any other commercial bank, RBI will be responsible for giving the person purchasing power equal to the value printed on the note.
Identify the correct statements:

Consider the following statements regarding High Powered Money:
1. The total liability of the monetary authority of the country, RBI, is called the monetary base or high powered money.
2. It consists of currency (notes and coins in circulation with the public and vault cash of commercial banks) and deposits held by the Government of India and commercial banks with RBI.
3. Total amount of money stock in the economy is equal to the volume of high powered money.
Identify the correct statements:

Consider the following statements about Cash Reserve Ratio (CRR):
1. Maintaining a CRR is mandatory for all banks functioning in India.
2. The RBI sets the CRR on its own discretion.
3. CRR has been gradually reduced after the reforms period since 1991.
Which of these is/are true?

Consider the following statements about the impact of the Cash Reserve Ration (CRR):
1. Reducing CRR injects liquidity in the financial system.
2. The secondary liquidity injected is far more than the primary liquidity injected by CRR.
3. Increasing CRR can tackle inflation in the short-run.
Which of these is/are true?

Consider the following statements about Statutory Liquidity Ratio (SLR):
1. Increasing SLR sucks liquidity from the bank- ing system.
2. SLR can be kept only in the form of government bonds/securities or treasury bills.
3. It is a monetary policy tool of the RBI.
Which of these is/are true?

Consider the following statements about Repo rate:
1. It is used for the purpose of short-term lending by the banks.
2. This rate functions as the benchmark rate for inter-bank interest rate.
3. It has direct impact on the nominal interest rate of bank\’s lending.
Which of these is/are true?

Consider the following statements about Reverse repo rate:
1. Reducing this rate increases the money supply.
2. Increasing this rate cuts bank losses.
Which of these is/are true?

Which of the following would increase the money supply in the economy?
1. A scheduled commercial bank issuing a cheque to its customer.
2. Reduction in Cash Reserve Ratio (CRR)
3. A customer depositing money in a scheduled commercial bank.
4. RBI issuing fresh currency
Choose the correct answer using the codes below:

Consider the following statements with respect to flat money:
1. They have same intrinsic value as gold or silver.
2. They cannot be refused by any citizen of the country for settlement of any kind of transaction.
The correct statement(s) is/are:

Consider the following statements:
1. While currency is issued by the Reserve Bank of India, coins are issued by the Government.
2. Fixed deposits are also part of demand deposits.
The correct statement(s) is/are:

Some of the legal definitions of money is given below. Which of the following is known as “broad money”?

Which of the following was/were objectives of demonetisation that took place in December, 2016?
1. To tackle the problem of corruption.
2. Prevent black money generation.
3. Stop terrorism and circulation of fake currency in the economy.
Choose the correct answer using the options given below:

Which of the following was/were among positive impacts of demonetisation on Indian economy?
1. The shortage of currency in circulation overall had encouraged economic growth.
2. It improved tax compliance as a large number of people were brought in the tax ambit.
3. The savings of an individual were channelised into the formal financial system.
The correct statement(s) is/are:

In the context of Indian economy consider the following statements:
1. Statutory Liquidity Ratio (SLR) is the amount which Commercial banks are required to keep with RBI.
2. Cash Reserve Ratio (CRR) is the deposit which the Commercial banks are
required to invest in specified liquid assets.
Which of the statements given above is/are correct?

M3, which is also known as “Broad Money”, consists of which of the following?
1. Currency notes and coins held by public.
2. Net demand deposit held by public.
3. Savings deposits with Post Office Savings Banks.
4. Net time deposits of Commercial Banks.
Select the correct answer using the code given below:

Consider the following statements about Repo Rate:
1. An increase in Repo rate decreases liquidity in the economy.
2. An increase in Repo rate increases inflation in the economy.
Choose the answer from the following code:

Which of the following tools are used by Central Bank to achieve Monetary Policy ends?
1. Open Market Operations
2. Reserve Ratios
3. Moral Suasion
4. Bank Rate
Choose the answer from the following code:

Consider the following statements about Statutory Liquid Ratio :
1. The lower and upper limit of SLR is fixed in Indian economy
2. SLR is regulated only under the RBI act 1934.
Choose the answer from the following code:

Which of the following is/are part of the foreign exchange reserves of India?
1. Foreign Currency Assets (FCAs)
2. Gold
3. Special Drawing Rights (SDRs)
Select the correct answer using the code given below: