UPSC Economics- Money Supply and Indian Financial System Set 2

1.

Which of the following could be a cause of demand inflation?

An increase in the cost of labour An increase in domestic interest rates An increase in the level of consumer spending An increase in import prices, resulting from a depreciating dollar

2.

Other things being equal, what would be the impact of an increase in net capital inflow on the Indian currency?

There would be an increase in the demand for the American dollar and an appreciation of the currency. There would be a decrease in the demand for the rupees (Rs.) and a depreciation of the currency. There would be an increase in the supply of the American dollar and an appreciation of the currency. There would be a decrease in the supply of the American dollar and a depreciation of the currency.

3.

If an exporter earns money and deposits that with RBI, what will be the ultimate impact on country's money supply?

Money supply will increase Money supply will decrease Money supply will remain unaltered Money supply will depend upon the current exchange rate

4.

'SHG Bank Linkage Programme' is a programme which encourages India's banks to lend to self-help groups (SHGs) composed mainly of poor women, this has evolved into an important Indian tool for microfinance. This programme was initiated by?

Reserve Bank of India (RBI) Agricultural Refinance and Development Corporation (ARDC) National Bank for Agriculture and Rural Development (NABARD) Non-Banking Finance Companies (NBFC)

5.

Open market Operation by RBI are the part of its:

Fiscal Policy Credit Policy Income Policy Monetary Policy

6.

Which of the following statements is not correct regarding the 'Banking Sector' of India?

At present there are 26 Nationalized Banks in India. Foreign Banks and Regional Rural Banks do not come under the category of Scheduled Commercial Banks. Banks have the freedom to regulate their own Savings Bank Deposit interest rates. Narsimham Committee is related to Banking Sector reforms.

7.

The concept of 'Universal Banking' was implemented in India on the recommendations of:

Abid Hussain Committee R H Khan Committee S Padmanabhan Committee Y H Malegam Committee

8.

Which among Ithe following is considered to be a part of Shadow Banking in India?

Business Correspondents Bankassurance Providers Non-Banking Financial Companies Private Banks

9.

Which among the following is the only correct statement?

Money market meets long term financing needs Recession in industrial sector in India is normally due to fall in exports Ways and means advances given by RBI are nowhere related to State?s revenue Exchange rate is fixed by RBI

10.

Bring out the only incorrect statement:

Reverse Repo operation by RBI aims at injecting? increasing liquidity SDR refers to special drawing rights Rupee appreciation results in decrease in imports Increase in inflation rate leads to decline in real interest rate

UPSC Economics- Money Supply and Indian Financial System Set 2

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UPSC Economics- Money Supply and Indian Financial System Set 2

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