SECTION-6

Economics Multiple Choice Questions

 
Q51. Which one of the following statement is correct regarding increase in the cash reserve ratio in India?     [Punjab PSC (Pre) 2017 UPPCS (Mains) 2004]

(A) It increases credit creation
(B) It reduces credit creation
(C) It does not affect credit
(D) It denotes liberal monetary policy

Ans:(B) It reduces credit creation

 

Q52. Credit creation power of the commercial banks gets limited by which of the following?
[HCS (Pre) 2014]

(A) Banking habits of the people
(B) Cash reserve ratio
(C) Credit policy of the central bank
(D) All of the above

Ans:(D) All of the above

 

Q53. Number of times a unit of money changes hands in the course of a year is called
[HCS (Pre) 2014]

(A) Supply of money
(B) Purchasing power of money
(C) Velocity of money
(D) Value of money

Ans:(C) Velocity of money

 

Q54. Which among the following is not correct?     [HCS (Pre) 2014]

(A) Floating exchange rate system works on market mechanism
(B) Floating exchange rate breeds uncertainties and speculation
(C) Economic and political factors and value judgments influence the choice of the exchange rate system
(D) The system of floating exchange rate requires comprehensive government intervention

Ans:(D) The system of floating exchange rate requires comprehensive government intervention

 

Q55. Monetary policy is implemented by ….. in India.    [UPPCS (Pre) 2006 HCS (Pre) 2014]

(A) The Ministry of Finance
(B) The Parliament
(C) Planning Commission
(D) Reserve Bank of India

Ans:(D) Reserve Bank of India

 

Q56. One amongst the following take the decision about the monetary policy of India.
[RAS (Pre) 2010]

(A) Finance Minister of India
(B) Reserve Bank of India
(C) Prime Minister of India
(D) International Monetary Fund

Ans:(B) Reserve Bank of India

 

Q57. Which one of the following is not an instrument of selective credit control in India?
[UPSC (Pre) 1995]

(A) Regulation of consumer credit
(B) Rationing of credit
(C) Margin requirements
(D) Variable cost reserve ratios

Ans:(D) Variable cost reserve ratios

 

Q58. Which one of the following is not an objective of Monetary policy?
[UPPCS (Mains) 2011]

(A) Price Stability
(B) Economic Stability
(C) Equitable distribution of Indian Assets
(D) Foreign Exchange Rate Stability

Ans:(C) Equitable distribution of Indian Assets

 

Q59. ‘Money is a matter of functions four, a medium, a measure a standard and …..’. What is the fourth function of money indicated in this popular phrase?   [HCS (Pre) 2014]

(A) A stock
(B) A flow
(C) A store
(D) A payment

Ans:(C) A store

 

Q60. Which of the following measure of the high power money Supply (H) has been used by RBI in India?    [HCS (Pre) 2014]

(A) Currency held by public + other deposits with the RBI
(B) Cash reserve of the commercial banks + other deposits with the RBI
(C) Currency held by the public +Cash reserves of the commercial banks + Other deposit with the RBI
(D) Currency held by the public + Cash reserves of the commercial banks + Time deposits of commercial banks + Other deposits with the RBI

Ans:(C) Currency held by the public +Cash reserves of the commercial banks + Other deposit with the RBI

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Read More Sections of Indian Economy Objective Questions

Each section contains maximum 80 Questions. To practice more questions visit other sections.
 

 Indian Economy Objective Questions – Section-1

 

 Indian Economy Objective Questions – Section-2

 

 Indian Economy Objective Questions – Section-3

 

 Indian Economy Objective Questions – Section-4

 

 Indian Economy Objective Questions – Section-5

 

 Indian Economy Objective Questions – Section-6

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