CBSE Questions for Class 8 General Knowledge Indian Economy Quiz 12 - MCQExams.com

Which one of the following is the correct sequence of the countries having Foreign Exchange Reserve from high to low?
  • China - Russia - India - France
  • China - France - India - Russia
  • France - China - Russia - India
  • France - China - India - Russia
Consider the following events in the Indian Finance System 
1 . Nationalisation of Reserve Bank of India .
2 . Foundation of Punjab National Bank .
3 . Nationalisation of State Bank of India .
4 . Establishment of NABARD .
Arrange the events given above chronologically and select the correct answer using the codes given below
  • 1 , 2 , 3 , 4
  • 1 , 2 , 4 , 3
  • 2 , 1 , 4 , 3
  • 2 , 1 , 3 ,4
Which one among the following is the total amount of money available in an economy at a specific time?
  • Near money
  • Narrow money
  • Money volume
  • Money stock
Consider the following statements 
1) Bank Rate is the rate at which RBI lends to the commercial banks through its discount window to help the banks meet depositor's demands and reserve requirements.
2) Bank Rate imposed by the RBI is stable and not changes with the market conditions.
Which of the statements given above is / are correct ?
  • Only 1
  • Only 2
  • Both 1 and 2
  • Neither 1 nor 2
Consider the following statements 
1) Sectoral currency is a form of complementary currency that is restricted to a specific sector.
2) Digital gold currency is a form of electronic money based on ounces of gold.
Which of the statements given above is / are correct ?
  • Only 1
  • Only 2
  • Both 1 and 2
  • Neither 1 nor 2
Consider the following components:
1) Notes in circulation
2) Circulation of rupee coins
3) Circulation of small coins
4) Cash on hand with banks 
Which of the components given above is/are part of the currency with the public?
  • Only 2
  • 1, 2 and 3
  • 2, 3 and 4
  • All of these
Which one of the following is the major component of the money supply in the Indian Economy?
  • Currency component
  • Deposit component
  • Treasury bills with public
  • Both 'a' and 'b'
Consider the following money supplies 
1) Narrow money
2) Saving deposits in the post office
3) Time deposits of the public with bank
4) Total post office savings
Which of the money supplies given above are the major components of the Broad Money ?
  • 1 , 2 and 3
  • 1 , 2 and 4
  • 2 , 3 and 4
  • 2 and 4
A foreign-exchange agreement between two parties to exchange the principal and / or interest payments of a loan for equivalent aspects of an equal in net present value loan in the form of each other's currency is known as 
  • debt swap
  • currency swap
  • interest swap
  • principal swap
Consider the following statements 
1) Repo bills are typically short- term bills.
2) Repo bills are not unusual to see with a maturity as long as two years.
Which of the statements given above is / are correct ?
  • Only 1
  • Only 2
  • Both 1 and 2
  • Neither 1 nor 2
Consider the following kinds of credit controls:
1) Minimum margins for lending against specific securities. 
2) Ceiling on the amounts of credit for certain purposes. 
3) Discriminatory rate of interest charged on certain types of advances.
Which of the credit controls given above are used by RBI as a selective credit control measures?
  • 1 and 2
  • 1 and 3
  • 2 and 3
  • All of these
After a gap of over 20 years, Rs. 1 note has been released in the country and it bears the signature of ______________.
  • Finance Secretary
  • RBI Governor
  • Prime Minister
  • Speaker
Consider the following elements 
1) Broad Money (M3)
2) All deposits with Post Office Savings Banks
3) National Savings Certificates
Which of the elements given above are the parts of the M4-Money Supply in Indian Economy ?
  • 1 and 2
  • 1 and 3
  • 2 and 3
  • All of these
With the aim of containing inflation and anchoring inflationary expectations , recent time , Reserve Bank of India actively managed liquidity through the appropriate use of which one of the following ?
  • Liquidity Adjustment Facility
  • Interest Subvention
  • Open Market Operations
  • Both 'a' and 'b'
Consider the following statements 
1) During inflation , RBI buys government securities in the open market.
2) During deflation , RBI sells government securities in the open market.
Which of the above statements is / are true ?
  • Only 1
  • Only 2
  • Both 1 and 2
  • None of the above
Consider the following 
1) Currency in Circulation.
2) Banker's deposits with the RBI.
3) Call / Term Funding from Financial Institutions.
4) 'Other' deposits with RBI.
Which of the components given above is / are included in the calculation of Reserve Money in India ?
  • 1 and 2
  • 2 , 3 and 4
  • 1 , 2 and 4
  • Only 2
Foreign Exchange Reserve are accumulated when there is absorption of the excess foreign exchange flows by the RBI through intervention in foreign exchange markets.
Which of the following currency is used by the RBI as an intervention currency ?
  • US Dollar
  • Euro
  • Japanese Yen
  • Both 'a' and 'b'
The Reserve Bank of India has initiated publication of a new set of monetary and liquidity aggregates as per the recommendations of the Working Group on Money Supply : Analytics and Methodology of Compilation.
Then , which one of the following money supplies in India is remained unchanged as that of the old definitions ?
  • M0
  • M1
  • M3
  • Both M0 and M1
Consider the following statements 
1) The rank of India in international Monetary Fund (IMF) is 13th is the list.
2) China ranks second just after the United States in the quota terms of IMF.
Which of the statements given above is / are correct ?
  • Only 1
  • Only 2
  • Both 1 and 2
  • Neither 1 nor 2
Which of the following is the correct definition of Hot Money ?
  • This is the fund which is dumped into a country to get the advantage of a favourable interest rate and hence bring high returns .
  • This is the fund which is provided by a bank in US Dollar at very short notice at the very high rate of interest and for a longer period of repayment .
  • This is the find which is pushed into market through Hawala or some other such illegal method and is sometime referred to also as Black Money .
  • Both 'a' and 'b'
With regards to the Service Area Approach Programme , consider the following 
1 . Avoidance of duplication of development efforts .
2 .Organised and planned lending in the designated areas .
3 . Monitoring and assessment of the service and its impact on production level .
4 . Optimise the credit and linkages between the production productivity .
Which of the benefits given above are actually accrued from the Service Area Approach Programme ?
  • 1 , 2 , 3 and 4
  • 1 , 2 and 3
  • 2 and 4
  • 3 and 4
Which one of the following is the mechanism used by Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments ?
  • State Liquidity Adjustment Facility
  • Cash Reserve Requirement
  • Liquidity Adjustment Facility
  • Ways and means advances
Select the correct one/ones about the cooperative banks in India from the given choices using the codes 
1 . The Urban co-operative Banks (ICBS) ,Until 1996, could only lend for non-agricultural purposes .
2 .These banks provide most services , such as savings and current accounts , safe deposit lockers , loan or mortgages to private and business customers .
  • Only 1
  • 1 and 2
  • Only 2
  • None of the these
Select the correct one /ones about the Banking Financial Supervision (BFS) in India 
1 . The RBI performs Financial supervision function under the guidance of the Board for Financial Supervision (BFS) .
2 .Primary objective of BFS is to undertake consolidate supervision of the financial sector comprising commercial banks , financial institution and non-banking finance companies .
  • Only 1
  • Only 2
  • Both 1 and 2
  • Neither 1 nor 2
Which one of the liquidity aggregates as per the recommendations of the Working Group on Money Supply : Analytics and Methodology of Compilation, includes the public Deposits of Non-banking Financial Companies ?
  • L1
  • L2
  • L3
  • None of these
Consider the following objectives 
1) To secure regional co-operation as regards the settlement of monetary transactions among the members of the Union
2) To provide a system for clearing payments among the member countries on a multilateral basis.
Which of the objectives given above is / are the primary objective of Asian Clearing Union (ACU) ? 
  • Only 1
  • Only 2
  • Both 1 and 2
  • Neither 1 nor 2
Consider the following functions of the LAF in Indian Monetary Policy
1) It influences the volume of liquidity in the money market.
2) It stabilises the short-term rate of interest or the call rates.
Which of the functions given above is / are the main functions of the LAF ?
  • Only 1
  • Only 2
  • Both 1 and 2
  • Neither 1 nor 2
Consider the following
1) Normal ways and means advances are clean and without the pledge of the Union Government.
2) Special ways and means advances are secured advances provided against the dated securities and pledge of Government of India.
Which of the statements given above is / are correct about the the ways and means advances made by the Reserve Bank of India ?
  • Only 1
  • Only 2
  • Both 1 and 2
  • Neither 1 nor 2
Which one of the following is the main composition of the New Broad Money (NM3) as per the recommendations of the Working Group on Money Supply : Analytics and Methodology of Compilation?
1) Narrow Money
2) Short-term time deposits of residents maturing at one year
3) Long-term time deposits of residents 
4) Term Funding from Financial Institutions
Select the correct answer using the code given below
  • 1 and 2
  • 1 and 3
  • 2 and 3
  • All of the above
Select the correct one/ones about a Local Area Banks (LABs) using the code given below 
1 . They ensure focussed savings and credit mobilisation by defining their clear boundary of operation .
2 . They operate in narrow geographical area of three continuous districts .
3 . Private sector is allowed to enter the segment .
  • 1 and 2
  • 2 and 3
  • 1 and 3
  • All of the above
What does the letter 'e' denotes in the term 'e-banking ' ?
  • Essential Banking
  • Economic Banking
  • Electronic Banking
  • Expansion Banking
Select the correct statement regarding the Priority Sector Lending (PSL) obligations of the banks operating in India 
  • the number of terms in the PSL has been decreased by the Government of India , following the recommendations of the Narsimham committee-I
  • nationalised banks have to fulfil higher targets of the PSL than the India private  sector banks.
  • for foreign private banks the PSL compulsion has been withdrawn .
  • poorest among the poor's also come under the PSL .
Consider the following statements 
1) The repo rate is the rate at which other banks borrow from the RBI.
2) A value of 1 for Gini Coefficient in a country  implies that there is perfectly equal income for everyone in its population.
Which of the statements given above is / are correct ?
  • Only 1
  • Only 2
  • Both 1 and 2
  • Neither 1 nor 2
Which one of the following agencies of the Indian Government publishes the Narrow Money (M1) and Broad money (M3) on fortnightly basis ?
  • State Bank of India
  • Security Exchange Board of India
  • Reserve Bank of India
  • Central Statistical Organisation
Consider the following statements 
1) Among liquidity aggregates , the data  on L1 and L2 are published monthly by the Reserve bank of India.
2) Data on Reserve Money (M0) in India is published by the Commercial Banks.
Which of the statements given above is / are correct ?
  • Only 1
  • Only 2
  • Both 1 and 2
  • Neither 1 nor 2
Consider the following statements 
1) Reserve Bank of India (RBI) was established in 1935.
2) The share capital RBI was divided into shares of 100 each which was entirely owned by private shareholders in the beginning .
Which of the statements given above is / are correct ?
  • Only 1
  • Only 2
  • Both 1 and 2
  • Neither 1 nor 2
Consider the following statements regarding India's Minimum Reserve system and select the incorrect one / one's using the codes given below
1) In minimum reserve system , RBI had to keep a minimum reserve of gold worth Rs. 115 crore and rest in Indian rupees.
2) The minimum requirement of foreign securities was diluted when minimum reserve system was launched.
  • Only 1
  • Only 2
  • 1 and 2
  • Neither 1 nor 2
If all the banks in an economy are nationalized and converted into monopoly banks , the total deposits ______________.
  • will decrease
  • will increase
  • Neither increase nor decrease
  • None of the above
Consider the following instruments 
1) Credit Monitoring Arrangement 
2) Credit Authorisation Scheme
3) Cash Reserve Requirement
4) Statutory Liquidity Requirement
Which of the instruments given above are used in the Selective Credit Control in India ?  
  • 1 , 2 and 3
  • 1 , 2 and 4
  • 2 and 3
  • 1 and 2
If the RBI decides to adopt an ' expansionist' monetary policy , which of the following it would not do ?
1) Cut CRR and optimise SLR .
2) Increase MSFR (Marginal Standing Facility Rate ) .
3) Cut bank rate and increase Reserve Repo Rate.
  • 1 and 2
  • Only 1
  • 2 and 3
  • Only 2
Consider the following elements 
1) New Broad Money (NM3).
2) All Deposits with the Post Office Savings Banks.
3) National Savings Certificates.
4) Term deposits with Term Lending Institutions and Refinancing Institutions (FIs).
5) Term Borrowing by FIs.
6) Certificates of Deposit issued by FIs.
7) Public Deposits of Non-banking Financial Companies.
Which of the elements given above are the major components of Liquidity Aggregate-3 (L3) of the Indian Monetary policy ? 
  • 1 , 3 , 4 and 6
  • 1 , 2 , 4 , 5 , 6 and 7
  • 1 , 2 , 3 , 4 , 5 and 7
  • All of the above
Consider the following statements 
1) Liquidity aggregates (L3) is disseminated once in a quarter in the Indian Monetary System.
2) Among liquidity aggregates , data on L1 and L2 are published monthly by the Indian Government.
Which of the statements given above is / are correct ?
  • Only 1
  • Only 2
  • Both 1 and 2
  • neither 1 nor 2
Consider the following sources
State's share in the Central Taxes
Grand-in aid from the Central Government
States' own non-tax revenue 
Which of the sources given above is/are the important source of revenue for the States ?
  • 1 and 2
  • Only 1
  • 2 and 3
  • All of these
The Eurozone Finance Ministers and the International Monetary Fund signed a deal in Brussels to and Cyprus with a bailout worth 10 billion Euros. Which of the following is/are features of the bailout deal ?
Cyprus agreed for Increasing the nominal corporate tax rate to 112.5%. Thus increasing it by 2.5%.
An imposition of 9.9% apart from the bank deposits above 100000 Euros in the Banks a part from the 6.75% tax on the smaller deposits.
The tax on interest. which will be generated by the deposits will also be levied.
The tax measures will help in boosting the revenues of Cyprus a part  from limiting the loan size which is required from Eurozone.
Choose the correct answer from codes given below.
  • Only 1
  • 2, 3 and 4
  • 3 and 4
  • All of these
Which one of the following deficits of the Union Government of India which includes the market borrowing and other government liabilities only ?
  • Revenue deficit
  • Budgetary deficit
  • Fiscal deficit
  • Primary deficit
Which one of the following deficits deducted the interest payments to internal and external debt from the fiscal deficit to Calculate the deficit of an economy ?
  • Revenue deficit
  • Twin deficit
  • Primary deficit
  • Budgetary deficit
Consider the following
VAT is the neutral tax since it does not influence the organisation of production.
VAT is easier to enforce than the Sales Tax to impose through cross-checking. 
Which of the statements given above Is/are correct about Value Added Tax (VAT) ?
  • Only 1
  • Only 2
  • Both 1 and 2
  • Neither 1 nor 2
Which of the following set of the canons of taxation has not been made the part of Indian tax reforms process till date? Select your answer using the codes given below
Equality
Certainity
Convenience
Economy 
Codes
  • 1 and 2
  • 2, 3 and 4
  • 1 and 3
  • 1, 2, 3 and 4
Consider the following statements 
1) Bank rate is the rate of interest which RBI charges its clients on their short term borrowing
2) Repo rate is the rate of interest which RBI charges its clients on their long term borrowing.
Which of the statements given above is / are correct?
  • Only 1
  • Only 2
  • Both 1 and 2
  • Neither 1 nor 2
Select the correct statement/ statements related to the Central Sales Tax (CST) and the VAT (Value Added Tax) from the list given below, using the codes
CST is a destination based tax of the centre while VAT is an origin based tax of the states.
CST is inconsistent with the VAT .
CST is a cascading type tax not rebatable against the VAT. 
Codes 
  • Only 1
  • 1 and 3
  • Only 3
  • 1, 2 and 3
0:0:1


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