Archives Answers

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…

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…

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…

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…

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…

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…

Ans – (a) Explanation:- Repo Rate is the rate at which the central bank of a country lends money to commercial banks to meet their short-term needs. Additional Information:- The repo rate is also called the Repurchase rate. The repo…

Ans – (c) Explanation:- If LRR = 20% Money Multiplier = 1/LRR Money Multiplier = 1/20% Money Multiplier = 100/20 Money Multiplier = 5 times

Ans – (a) Explanation:- Cash Reserve Ratio (CRR): It refers to the minimum percentage of net demand and time liabilities, to be kept by commercial banks with the central bank. A change in CRR affects the ability of commercial banks…

Ans – (c) 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 Central Bank of an economy in the direction of…