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Ans – (a) or (b) or (c) or (d) Explanation:- Money supply can be controlled by: Buying securities in the open market. It increases the cash reserves of the commercial bank. It increases the credit-creating capacity and thus money supply…

Ans – (a) The main aim of monetary policy is to bring price stability in the economy. Explanation:- The central bank uses monetary policy to control the money supply. money supply is controlled by controlling the credit-creating capacity of the…

Ans – (a) or (c) Explanation:- Statutory Liquidity Ratio (SLR): If refers to the minimum percentage of net demand and time deposit liabilities that commercial banks are required to maintain with themselves. SLR is maintained in the form of designated…

Ans – (c) Explanation:- Bank Rate:- The bank rate is the rate at which the central bank of a country lends money to commercial banks to meet their long-term needs. RBI uses bank rate to control credit and it has…

Ans – (d) Explanation:- (a) Bank rate is the rate at which the Central Bank is ready to give credit to Commercial banks for long-term needs. (b) Bank rate is the interest rate at which the central bank provides loans…

Ans – (d) Explanation:- Commercial banks open following types of accounts 1. Savings Deposits Account 2. Current Deposits Account 3. Time Deposits Account

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

Ans – (a) Explanation:- Demand deposits are chequable deposits as money can be withdrawn by issuing cheques on demand.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…

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…

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…