{"id":10290,"date":"2024-07-12T08:29:26","date_gmt":"2024-07-12T07:29:26","guid":{"rendered":"https:\/\/mcqsadda.com\/?p=10290"},"modified":"2024-07-17T12:01:29","modified_gmt":"2024-07-17T11:01:29","slug":"money-banking-set-1","status":"publish","type":"post","link":"https:\/\/mcqsadda.com\/index.php\/2024\/07\/12\/money-banking-set-1\/","title":{"rendered":"Money Banking Set &#8211; 1"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\"><strong>1. <strong><strong><strong><strong>_________________ is the main source of money supply in an economy.<\/strong><\/strong><\/strong><\/strong><\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>A. Central Bank<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>B.  Commercial Banks<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>C. Both (A) and (B)<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>D. Government<\/strong><\/h3>\n\n\n\n<button class=\"acc\">ANSWER &#038; SOLUTION<\/button>\n<div class=\"pnl\">\n  <p>ANSWER: C.Both (A) and (B)<BR>\nSOLUTION :The sources of money supply involve both the central bank (typically the Reserve Bank of India, RBI, in India) and commercial banks. The key sources include: Central Bank (RBI) Actions: The RBI has the authority to issue currency notes and coins, contributing to the physical component of money supply (M0).<\/p>\n<\/div>egin\n\n\n\n<h2 class=\"wp-block-heading\"><strong>2. Money supply is a _________ concept.<\/strong><\/h2>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>A. Stock<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>B. Flow<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>C. Both (a) and (b)<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>D. Neither (a) nor (b)<\/strong><\/h3>\n\n\n\n<button class=\"acc\">ANSWER &#038; SOLUTION<\/button>\n<div class=\"pnl\">\n  <p>ANSWER:A.Stock<BR>\nSOLUTION: \nMoney supply is measured as per the stock of money that is in circulation among the public at a particular point of time. Hence, money supply is a &#8216;stock concept&#8217;. <\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>3. There is ______ relationship between reserve ratio and money creation.<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>A. \u00a0Direct<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>B. \u00a0\u00a0Inverse<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>C. Can&#8217;t say<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>D. None<\/strong><\/h3>\n\n\n\n<button class=\"acc\">ANSWER &#038; SOLUTION<\/button>\n<div class=\"pnl\">\n  <p>ANSWER : B.Inverse<BR>\nSOLUTION: \nThere is an inverse relationship between legal reserve ratio (LRR) and value of money multiplier.<\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>4. Who regulates money supply?<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>A. Government of India <\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>B. Reserve Bank of India<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>C. Commercial Banks<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>D. Planning Commission<\/strong><\/h3>\n\n\n\n<button class=\"acc\">ANSWER &#038; SOLUTION<\/button>\n<div class=\"pnl\">\n  <p>ANSWER: B.Reserve Bank of India<BR>\nSOLUTION: \nThe Reserve Bank of India (RBI) controls the money supply in India. The RBI has control over the monetary policy of India. It controls the interest rates, the reserves to be maintained with the banks to control the money circulation in the economy.<\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>5. \u00a0This bank operates in public interest without any profit motive_______.<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>A. Reserve Bank of India<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>B. State Bank of India<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>C.  \u00a0Canara Bank<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>D. \u00a0Allahabad Bank<\/strong><\/h3>\n\n\n\n<button class=\"acc\">ANSWER &#038; SOLUTION<\/button>\n<div class=\"pnl\">\n  <p>ANSWER: A.Reserve Bank of India<BR>\nSOLUTION: \nReserve bank of India looks after the monetary system of the country. It is a banker to the banks and the govt of the country, it does not exist for making profits. Its main objective is to make public welfare and economic development. <\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>6. \u00a0Which of the following is a step that the central bank will take to encourage greater investment in the economy?<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>A.  It will look to increase the cash reserve ratio<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>B. It will look to reduce the cash reserve ratio<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>C. It will look to increase the bank rate<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>D. It will look to sell the government securities in the open market<\/strong><\/h3>\n\n\n\n<button class=\"acc\">ANSWER &#038; SOLUTION<\/button>\n<div class=\"pnl\">\n  <p>ANSWER:B.It will look to reduce the cash reserve ratio<BR>\nSOLUTION: \nIt will look to reduce the cash reserve ratio.<\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>7. <strong><strong>Which of the following is a step that the central bank will take to increase the overall availability of credit?<\/strong><\/strong><\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>A. It will sell the government securities in the market<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>B.  It will buy more government securities from the market<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>C. It will raise the reverse repo rate<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>D. It will raise the repo rate<\/strong><\/h3>\n\n\n\n<button class=\"acc\">ANSWER &#038; SOLUTION<\/button>\n<div class=\"pnl\">\n  <p>ANSWER:A.It will sell the government securities in the market<BR>\nSOLUTION :\nIt will sell the government securities in the market\n<\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>8. \u00a0Which of the following statements is true about the Indian monetary system?<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>A. The Indian monetary system is based on the gold standard<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>B. The Indian monetary system is based on the credit money standard<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>C. The Indian monetary system is based on the paper standard<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>D. The Indian monetary system is based on the metallic standard<\/strong><\/h3>\n\n\n\n<button class=\"acc\">ANSWER &#038; SOLUTION<\/button>\n<div class=\"pnl\">\n  <p>ANSWER:C.The Indian monetary system is based on the paper standard<BR>\nSOLUTION:\nThe Indian monetary system is based on the paper standard. <\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>9. Which of the following statements is true about the central bank?<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>A. It regulates the entire banking system in the country<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>B. It is under the ownership of the central government of a country<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>C. It is the apex bank of a country<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>D. All of the above<\/strong><\/h3>\n\n\n\n<button class=\"acc\">ANSWER &#038; SOLUTION<\/button>\n<div class=\"pnl\">\n  <p>ANSWER: D.All of the above<BR>\nSOLUTION: \nAll of the above\n<\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>10. Which of the following statements is true about the money supply?<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>A. It is the total volume of money that is held by the government of a country<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>B. It is the total volume of money that is held by the general public of a country over a time period<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>C. It is the total volume of money that is held by the general public of a country at a particular point in time<\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>D. All of the above<\/strong><\/h3>\n\n\n\n<button class=\"acc\">ANSWER &#038; SOLUTION<\/button>\n<div class=\"pnl\">\n  <p>ANSWER: C.It is the total volume of money that is held by the general public of a country at a particular point in time<BR>\nSOLUTION:\nIt is the total volume of money that is held by the general public of a country at a particular point in time\n<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>1. _________________ is the main source of money supply in an economy. A. Central Bank B. Commercial Banks C. Both (A) and (B) D. Government ANSWER &#038; SOLUTION ANSWER: C.Both (A) and (B) SOLUTION :The sources of money supply involve both the central bank (typically the Reserve Bank of India, RBI, in India) and commercial<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[5521,5654,5655,5646,4029,5649,5652,5522,5523,5525,5526,5527,5529,5528,5530,5524],"class_list":{"0":"post-10290","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-economics","7":"tag-_________________-is-the-main-source-of-money-supply-in-an-economy","8":"tag-economics-mcqs-for-sda-fda-pdo-vao-banking-kas-ias-ssc-gd-ssc-chsl-ssc-cgl-for-all-compitative-exams","9":"tag-economics-mcqs-for-sda-fda-pdo-vao-banking-kas-ias-ssc-gd-ssc-chsl-ssc-cgl-for-all-compitative-examsin-kannada","10":"tag-exam-veda","11":"tag-mcqs-adda","12":"tag-mcqs-for-pc-psi-sda-fda-pdo-vao-banking-kas-ias-ssc-gd-ssc-chsl-ssc-cgl-for-all-compitative-exams","13":"tag-mcqs-for-pc-psi-sda-fda-pdo-vao-banking-kas-ias-ssc-gd-ssc-chsl-ssc-cgl-for-all-compitative-examsin-kannada","14":"tag-money-supply-is-a-_________-concept","15":"tag-there-is-______-relationship-between-reserve-ratio-and-money-creation","16":"tag-this-bank-operates-in-public-interest-without-any-profit-motive_______","17":"tag-which-of-the-following-is-a-step-that-the-central-bank-will-take-to-encourage-greater-investment-in-the-economy","18":"tag-which-of-the-following-is-a-step-that-the-central-bank-will-take-to-increase-the-overall-availability-of-credit","19":"tag-which-of-the-following-statements-is-true-about-the-central-bank","20":"tag-which-of-the-following-statements-is-true-about-the-indian-monetary-system","21":"tag-which-of-the-following-statements-is-true-about-the-money-supply","22":"tag-who-regulates-money-supply"},"_links":{"self":[{"href":"https:\/\/mcqsadda.com\/index.php\/wp-json\/wp\/v2\/posts\/10290","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mcqsadda.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mcqsadda.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mcqsadda.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mcqsadda.com\/index.php\/wp-json\/wp\/v2\/comments?post=10290"}],"version-history":[{"count":1,"href":"https:\/\/mcqsadda.com\/index.php\/wp-json\/wp\/v2\/posts\/10290\/revisions"}],"predecessor-version":[{"id":10305,"href":"https:\/\/mcqsadda.com\/index.php\/wp-json\/wp\/v2\/posts\/10290\/revisions\/10305"}],"wp:attachment":[{"href":"https:\/\/mcqsadda.com\/index.php\/wp-json\/wp\/v2\/media?parent=10290"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mcqsadda.com\/index.php\/wp-json\/wp\/v2\/categories?post=10290"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mcqsadda.com\/index.php\/wp-json\/wp\/v2\/tags?post=10290"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}