What is the value of money multiplier when initial deposits are ₹ 500 crores and LRR is 10%?
Ans – (c) Explanation:- Money Multiplier = 1/LRR Money Multiplier = 1/10% Money Multiplier = 100/10 Money Multiplier = 10 times
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Which bank controls the banking and monetary structure of India?
Ans – (a) Explanation:- The Central Bank is an Apex body that controls, operates, regulates, and directs the entire banking and monetary structure of the country. Central Bank:- It is known as the apex body as it occupies the topmost…
Which of the following instrument can not be used by Central Bank to control money supply?
Ans – (d) Government spending is a measure of fiscal policy of the government to control the money supply. The government can increase its spending on infrastructure and subsidies to increase the money supply. On the other hand, the government…
____ refer to those deposits in which amount is deposited with bank for a fixed period of time
Ans – (b) Explanation:- Time Deposits:- It refers to those deposits, in which the amount is deposited with the bank for a fixed period of time. 1. Such deposits do not enjoy a chequeable facility. These deposits carry a high…
Which of the following is not a function of the Reserve Bank of India?
Ans – (b) Explanation:- RBI does not deal with the public. Thus It is not the banker to the public. It only deals with financial institutions and government.
Other name for legal reserve requirement is ____.
Ans – (c) Explanation:- The legal Reserve Requirement is also known as Variable Reserve Ratio. It has two components: 1. Cash reserve ratio 2. statutory Liquidity Ratio This ratio is controlled by the central bank and can be changed as…
Which of the following is not correct for Reserve Bank of India?
Ans – (b) Explanation:- RBI is the central bank of India. It is the apex body of the financial institution. It controls and regulates other financial institutions such as commercial banks. It is also the bank of the government. It…
If amount of initial deposits with commercial banks is ₹ 3,000 crore and LRR is 25%, then total deposits created will be:
Ans – (b) Explanation:- Total Deposits = Initial Deposits × 1/LRR Total Deposits = 3,000 × 1/25% Total Deposits = 3,000 × 4 Total Deposits = ₹ 12,000 Crores
In order to reduce credit in the country, RBI may:
Ans – (b) Explanation:- One of the Monetary policies practiced by the RBI is the Open Market operations. RBI has the right to sell and purchase of government securities to the public. By practicing it, RBI can control the money…
What is the other name of Money Multiplier ?
Ans – (a) Explanation:- The other name of Money Multiplier are: (i) Credit Multiplier (ii) Deposit Multiplier Money multiplier is the formula that calculates, how much money money a commercial bank can create. In this whole process, Money is created…