Find the odd one out among the following:
Ans – (c) Explanation:- Quantitative Credit Control Policy: 1. Reverse Repo Rate 2. Cash Reserve Ratio 3. Open Market Operations Qualitative Credit Control Policy: 1. Margin Requirements
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Demand deposits are:
Ans – (a) Explanation:- Demand deposits are chequable deposits as money can be withdrawn by issuing cheques on demand. The commercial bank issues a book of cheques. The account holder can withdraw cash by issuing a self cheque. The holder…
Commercial Banks create money by way of:
Ans – (c) Commercial Banks create money by way of demand deposits. Explanation:- Generally, commercial banks create money through lending that is credited in the demand deposits. The commercial bank provides loans to the public from initial deposits. Banks do…
The value of credit multiplier will be high when Legal Reserve Ratio is:
Ans – (a) Explanation:- The credit multiplier is inversely related to the legal reserve ratio. In other words, credit Multiplier is the process by which commercial banks create credit, based upon the reserve ratio and initial deposits. It is calculated…
Qualitative instruments of monetary policy exclude:
Ans – (b) Explanation:- Qualitative instruments of monetary policy include: 1. Margin Requirements 2. Moral Suasion 3. Selective Credit Controls Additional Information:- Moral Suasion:- This is a combination of persuasion and pressure that the Central bank applies on other banks…
Monetary Policy is the policy of:
Ans – (c) Monetary Policy is the policy of the Central Bank. Explanation:- The Reserve Bank of India (RBI) is empowered to regulate the money supply in the economy through its ‘Monetary Policy’. It is the policy adopted by the…
Bank rate is the rate at which ____ lends money to ____.
Ans – (a) The bank rate is the rate at which the Central Bank lends money to Commercial Banks Explanation:- Bank Rate:- It is the interest rate at which the commercial banks can borrow from the central bank to meet…
Which of the following is the function of Central Bank?
Ans – (d) Explanation:- One of the functions of the central bank is the Banker’s Bank. Banker’s Bank and Supervisor:- There are a number of commercial banks in the country. There should be some agency to regulate and supervise their…
Credit Control means:
Ans – (c) Explanation:- Credit Control means both contraction and expansion of money supply. Central banks with the help of monetary policy can increase and decrease the credit supply in the economy. for example:- An increase in the bank rate…
The lender of last resort is the function of:
Ans – (b) Explanation:- The Central Bank is the banker’s bank and supervisor. One of the functions of it is, Lender of the Last Resort:- When commercial banks fail to meet their financial requirements from other sources, i.e., in case…