MCQOPTIONS
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MCQOPTIONS
This section includes 657 Mcqs, each offering curated multiple-choice questions to sharpen your Testing Subject knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
Which of the following is not a quantitative method of credit control |
| A. | Bank arte |
| B. | Open market operation |
| C. | Variable reserve ratio |
| D. | Regulation of consumer credit |
| Answer» E. | |
| 2. |
Which of the following is the indicators of economics growth |
| A. | National income |
| B. | Per capita income |
| C. | Per capita consumption |
| D. | All of the above |
| Answer» E. | |
| 3. |
To what extent the central bank is the lender of the last resort? |
| A. | As it lends to the government |
| B. | As it provides finance to agriculture |
| C. | As it is the ultimate source of credit in times of crisis |
| D. | As it controls the money supply in the economy |
| Answer» D. As it controls the money supply in the economy | |
| 4. |
Variable reserve ratio refers to- |
| A. | The ratio which the commercial banks are required to maintain with the central bank |
| B. | The ratio at which the central bank rediscounts first class bills |
| C. | The purchase and sale by the central bank to government securities in the money market |
| D. | All of the above |
| Answer» B. The ratio at which the central bank rediscounts first class bills | |
| 5. |
What is known as the most profitable asset of a commercial bank? |
| A. | Investment at call and short-notice |
| B. | Loans and advances to its customers |
| C. | Accepting deposits |
| D. | None of the above |
| Answer» C. Accepting deposits | |
| 6. |
The term bank liquidity implies |
| A. | Management of cash |
| B. | Creation of credit |
| C. | The capacity of the bank to give cash on demand in exchange |
| D. | All of the above |
| Answer» D. All of the above | |
| 7. |
The fundamental function of a commercial bank is |
| A. | Acceptance of deposits |
| B. | Advancing loans |
| C. | Issuing bank draft |
| D. | Creating credit |
| Answer» C. Issuing bank draft | |
| 8. |
Loans and investment of a commercial bank constitute its |
| A. | Derivative deposits |
| B. | Primary deposits |
| C. | Secondary deposits |
| D. | All of the above |
| Answer» B. Primary deposits | |
| 9. |
Bank s liquidity means |
| A. | Its capacity to create credit |
| B. | Its capacity to provide a high rate of interest |
| C. | Its capacity to supply finance |
| D. | Its capacity to convert its assets into cash |
| Answer» E. | |
| 10. |
Derivative deposits are created during the time of |
| A. | Accepting demand deposits |
| B. | Accepting drafts |
| C. | Making loans to the customers |
| D. | All of the above |
| Answer» D. All of the above | |
| 11. |
Which of the following public sector banks has the highest number of branches in India? |
| A. | State Bank of India |
| B. | Allahabad Bank |
| C. | Bank of India |
| D. | Punjab National Bank |
| Answer» B. Allahabad Bank | |
| 12. |
A bank s capacity to create credit is limited by the |
| A. | Size of cash |
| B. | Size of its area |
| C. | Size of the central bank |
| D. | All of the above |
| Answer» B. Size of its area | |
| 13. |
The securities and bonds which a commercial banks holds is also known as |
| A. | Cash reserve ratio |
| B. | Derivative deposits of the banks |
| C. | Secondary deposits of the bank |
| D. | All of the above |
| Answer» D. All of the above | |
| 14. |
Which is known as the most profitable asset of the bank? |
| A. | loans and advance to its customers |
| B. | the investment in government securities |
| C. | life insurance policies of the staff |
| D. | None of the above |
| Answer» B. the investment in government securities | |
| 15. |
The derivative deposit created by a bank results in- |
| A. | a decrease in the total stock of money |
| B. | an increase in the total stock of money |
| C. | an increase in government securities |
| D. | none of the above |
| Answer» C. an increase in government securities | |
| 16. |
What is the Reserve Deposit Ratio ? |
| A. | The proportion of money RBI lends to commercial banks |
| B. | The proportion of total deposits commercial banks keep as reserves |
| C. | The total proportion of money that commercial banks lend to the customers |
| D. | None of the above |
| Answer» C. The total proportion of money that commercial banks lend to the customers | |
| 17. |
Solow s model of long-run growth is an improvement over that of |
| A. | J.E. Meade |
| B. | Harrod-Domar |
| C. | J. Robinson |
| D. | A.K.Sen |
| Answer» C. J. Robinson | |
| 18. |
Reserve Bank of India(RBI) was established on |
| A. | 1st April,1925 |
| B. | 1st April 1935 |
| C. | 1st April 1945 |
| D. | 1st April 1955 |
| Answer» C. 1st April 1945 | |
| 19. |
The major difference between Harrod-Domar and Solow models of growth lies in |
| A. | Returns to scale |
| B. | Returns to variable factors |
| C. | Substitutability between labour and capital |
| D. | Growth of income |
| Answer» D. Growth of income | |
| 20. |
If the central bank wants to control credit, it should |
| A. | Lower the rediscount rate |
| B. | Raise the bank rate |
| C. | Buy securities in the open market |
| D. | Raise cash reserve ratio |
| Answer» C. Buy securities in the open market | |
| 21. |
Which of the following models formed the basis of India s First Five Year Plan |
| A. | Malanobis model |
| B. | Feldman model |
| C. | Harrod-Domar model |
| D. | Leontief model |
| Answer» D. Leontief model | |
| 22. |
Harrod-Domar model of economic growth is based on |
| A. | Underveloped economy |
| B. | Advanced capitalist economy |
| C. | Developing economy |
| D. | All of the above |
| Answer» C. Developing economy | |
| 23. |
Which of the following models uses three distinct concepts of growth? |
| A. | Ramsey model |
| B. | Harrod-Domar model |
| C. | Solow model |
| D. | Lewis model |
| Answer» C. Solow model | |
| 24. |
Which of the following is a qualitative method of credit control of a central bank? |
| A. | Bank rate |
| B. | Open market operation |
| C. | Rationing of Credit |
| D. | All of the above |
| Answer» D. All of the above | |
| 25. |
Harrod-Domar model operates in a |
| A. | Closed economy |
| B. | Open economy |
| C. | Both open and closed economy |
| D. | None of the above |
| Answer» B. Open economy | |
| 26. |
Harrod- Domar model is based on |
| A. | Two distinct rates of growth |
| B. | Three distinct rates of growth |
| C. | Four distinct rates of growth |
| D. | Five distinct rates of growth |
| Answer» C. Four distinct rates of growth | |
| 27. |
When the Central Bank intends to expand the credit, it should |
| A. | Raise the margin requirements |
| B. | Raise the variable reserve ratio |
| C. | Lower the bank rate |
| D. | Purchase government securities in the open market |
| Answer» E. | |
| 28. |
Which of the following is not a function of Central Bank? |
| A. | Enjoys monopoly of note issue |
| B. | Acts as the banker s bank |
| C. | Creation of credit |
| D. | Lender of the last resort |
| Answer» B. Acts as the banker s bank | |
| 29. |
The sequence of the three growth rates in Harod-Domar model is |
| A. | actual, warranted and natural growth rates |
| B. | natural,warranted and actual growth rates |
| C. | warranted, actual and natural growth rates |
| D. | natural,actual and warranted growth rates |
| Answer» B. natural,warranted and actual growth rates | |
| 30. |
According to Harrod-Domar model, once the steady growth is interrupted and the economy falls into disequilibrium, cumulative forces tend to perpetuate divergence thereby leading to |
| A. | inflation in the economy |
| B. | either secular deflation or secular inflation |
| C. | Low economic growth rates |
| D. | All of the above |
| Answer» C. Low economic growth rates | |
| 31. |
Which of the following is a selective credit instrument? |
| A. | variable reserve ratio |
| B. | credit rationing |
| C. | Bank rate |
| D. | All of the above |
| Answer» C. Bank rate | |
| 32. |
In Harrod-Domar model, the actual growth rate represented by G, is determined by |
| A. | Aggregate demand and aggregate supply |
| B. | Saving ratio and the capital-output ratio |
| C. | Increase in productive capacity |
| D. | Net autonomous investment |
| Answer» C. Increase in productive capacity | |
| 33. |
Who was the first Indian to become Governor of Reserve Bank of India(RBI)? |
| A. | Liaquant Ali Khan |
| B. | T.T. Krishnamachari |
| C. | John Mathai |
| D. | C.D. Deshmukh |
| Answer» E. | |
| 34. |
In what way the Central Bank serves as a Banker s Bank? |
| A. | By maintaining gold reserve |
| B. | By controlling currency |
| C. | By acting as a lender of the last resort |
| D. | By reducing the interest rates |
| Answer» D. By reducing the interest rates | |
| 35. |
Equation of exchange is associated with |
| A. | Pigou |
| B. | J.B.Say |
| C. | Marshall |
| D. | Irving Fisher |
| Answer» E. | |
| 36. |
Robertson s equation of exchange considers money as |
| A. | A medium of exchange |
| B. | A store of value |
| C. | Measures of value |
| D. | All of the above |
| Answer» C. Measures of value | |
| 37. |
Which growth model analyses the contribution of technological progress to the overall growth rate |
| A. | Solow model |
| B. | Kaldor model |
| C. | Harrod model |
| D. | All of the above |
| Answer» B. Kaldor model | |
| 38. |
Which of the following models makes the assumption of constantsaving-income ratio? |
| A. | Kaldor model |
| B. | Leontief model |
| C. | Hoarrod-Domar model |
| D. | Joan Robinson model |
| Answer» D. Joan Robinson model | |
| 39. |
Primary deposit in a commercial bank is called |
| A. | Active deposit |
| B. | Passive deposit |
| C. | Derivative deposit |
| D. | All of the above |
| Answer» C. Derivative deposit | |
| 40. |
In India, coins are minted at four places, which among the following is one of them |
| A. | New Delhi |
| B. | Chennai |
| C. | Hyderabad |
| D. | All of them |
| Answer» D. All of them | |
| 41. |
Derivative deposit in a commercial bank is also called |
| A. | Active deposit |
| B. | Passive deposit |
| C. | Primary deposit |
| D. | None of the above |
| Answer» B. Passive deposit | |
| 42. |
The saving ratio in Solow s model is |
| A. | Constant |
| B. | Negative |
| C. | Flexible |
| D. | None of the above |
| Answer» B. Negative | |
| 43. |
With economic growth, the proportion of labour-force engaged in agriculture |
| A. | Increases |
| B. | Decreases |
| C. | Remains unaffected |
| D. | Changes in uncertain manner |
| Answer» C. Remains unaffected | |
| 44. |
Which of the following is a qualitative or selective method of credit control by the central bank? |
| A. | Bank rate or Discount Rate Policy |
| B. | Open market operations |
| C. | Cash Reserve Ratio |
| D. | None of the above |
| Answer» E. | |
| 45. |
The number of times a unit of money exchanges hands during a unit period of time is known as |
| A. | Velocity of the circulation of money |
| B. | Speed of circulation of money |
| C. | Momentum of circulation of money |
| D. | Count of circulation of money |
| Answer» B. Speed of circulation of money | |
| 46. |
Capital-output ratio is determined by |
| A. | Sectoral allocation of capital |
| B. | Level of economic activity |
| C. | Human and natural resources |
| D. | All of the above |
| Answer» E. | |
| 47. |
In Solow s model of economic growth, production takes places under |
| A. | Increasing returns to scale |
| B. | Constant returns to scale |
| C. | decreasing returns to scale |
| D. | None of the above |
| Answer» C. decreasing returns to scale | |
| 48. |
The incremental capital-output ration (ICOR) refers to the |
| A. | Ratio of investment to change in output |
| B. | Ratio of capital stock to the total output |
| C. | Marginal productivity of capital |
| D. | Financed by the citizens of a country and the income enjoyed by them |
| Answer» B. Ratio of capital stock to the total output | |
| 49. |
In the Fisher s extended equation of exchange MI VI represents |
| A. | Credit money |
| B. | Primary money |
| C. | Both primary and credit money |
| D. | General Price level |
| Answer» B. Primary money | |
| 50. |
Fisher equation of exchange states that |
| A. | P varies directly with income |
| B. | P varies directly with M |
| C. | P and M are constants |
| D. | None of the above |
| Answer» C. P and M are constants | |