Economics (Part – XI) - Mock Test 365

Total Questions: 50

31. Who acts as Banker to the Indian Government? [S.S.C. Online MTS (T-I) 14.08.2019 (Shift-III)]

(a) Reserve Bank of India
(b) State Bank of India
(c) World Bank
(d) International Monetary Fund

Correct Answer: (a) Reserve Bank of India

Solution:The Reserve Bank of India (RBI) works as a banker to the Government of India. The Reserve Bank of India carries on the normal banking business of governments, both public and private, through its own offices and commercial banks appointed as its agents.

32. Which institution in India acts as 'lender of the last resort'? [S.S.C. Online CHSL (T-I) 24.01.2017(Shift-II)]

(a) Finance Ministry
(b) Reserve Bank of India
(c) Treasury
(d) Currency Printing Presses

Correct Answer: (b) Reserve Bank of India

Solution:The Reserve Bank of India acts as a lender of the last resort. It offers loans to banks or other eligible institutions that are experiencing financial difficulty or near collapse.

33. What is the meaning of the term 'collateral' in the context of the banking system? [S.S.C. Online CHSL (T-I) 10.08.2021 (Shift-II)]

(a) Collateral is an asset that a borrower owns and uses this as a guarantee to a lender until the loan is repaid.
(b) Collateral is an asset that the government provides to farmers.
(c) Collateral is an asset that a borrower took as a loan.
(d) Collateral is an asset of the government that is used for the protection of consumers.

Correct Answer: (a) Collateral is an asset that a borrower owns and uses this as a guarantee to a lender until the loan is repaid.

Solution:In the context of the banking system, Collateral is an asset that a borrower owns and uses as a guarantee to a lender until the loan is repaid.

34. The legal provisions governing the management of foreign exchange reserves are laid down in the Reserve Bank of India Act,_______. [S.S.C. Online CHSL (T-I) 10.08.2021 (Shift-II)]

(a) 1923
(b) 1971
(c) 1947
(d) 1934

Correct Answer: (d) 1934

Solution:The legal provisions governing the management of foreign exchange reserves are laid down in the Reserve Bank of India Act, 1934.

35. In which of the following years did the Reserve Bank of India liberalise the licensing policy for Urban Co-operative Banks? [S.S.C. Online CHSL (T-I) 10.08.2021 (Shift-III)]

(a) 1998
(b) 2001
(c) 1993
(d) 1995

Solution:In 1993, the Reserve Bank of India liberalized the licensing policy for Urban Co-operative Banks.

36. Which Central agency manages the public debt of the Central and State government? [S.S.C. Online MTS (T-I) 21.08.2019 (Shift-II)]

(a) FICCI
(b) IRDA
(c) SEBI
(d) RBI

Correct Answer: (d) RBI

Solution:

The Reserve Bank of India (RBI) manages the public debt of the central and state governments. The Reserve Bank of India was established on April 1, 1935, in accordance with the provisions of the Reserve Bank of India Act, 1934.

37. Scheduled bank is a bank which is : [S.S.C. Online C.G.L. (T-I) 7.09.2016 (Shift I & II)]

(a) Nationalised
(b) Not Nationalised
(c) Based in a foreign Country
(d) Included in the second schedule of RBI

Correct Answer: (d) Included in the second schedule of RBI

Solution:A scheduled bank, in India, refers to a bank that is listed in the 2nd Schedule of the Reserve Bank of India Act, 1934. Banks not under this Schedule are called non-scheduled banks. Scheduled banks are usually private, foreign and nationalized banks operating in India.

38. The nationalisation of major commercial Banks took place in- [S.S.C. Online C.G.L. (T-I) 6.09.2016 (Shift-III)]

(a) 1947
(b) 1956
(c) 1969
(d) 1980

Solution:The nationalization of major commercial Banks took place on 19 July 1969. The Nationalization was done through the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969. This was the bold decision taken by that time Prime Minister of India Smt Indira Gandhi.

39. If Reserve Bank of India reduces the cash reserve ratio, it will : [S.S.C. Online C.G.L. (T-I) 2.09.2016 (Shift-I)]

(a) increase credit creation
(b) decrease credit creation
(c) have no impact on credit creation
(d) have no definite impact on credit creation

Correct Answer: (a) increase credit creation

Solution:The credit creation capacity of any bank depends on the Cash Reserve Ratio (CRR). If the cash reserve ratio is low, the bank has to keep less cash to pay to the public and correspondingly more funds will be available for lending. That is, a decrease in CRR will increase credit creation, while an increase in CRR will decrease credit creation.

40. The total liability of the monetary authority of the country, Reserve Bank of India, is called : [S.S.C. Online CHSL (T-I) 12.08.2021 (Shift-III)]

(a) Hot money
(b) High powered money
(c) Cold cash
(d) Grey money

Correct Answer: (b) High powered money

Solution:The total liability of the monetary authority of the country, RBI, is called the monetary base or high-pow-ered money. It consists of currency (notes and coins in circulation with the public and vault cash of com-mercial banks) and deposits held by the Government of India and commercial banks with RBI.

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Economics (Part – XI)