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Ans – (b) 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…

Ans – (d) Explanation:- The central bank can borrow money from the commercial bank in need. The commercial bank can also money from the central bank as the central bank is the last resort. The central government and all state…

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…

Ans – (c) Explanation:- LIC is not a bank, it does not open the demand deposits such as savings and current accounts of the general public. It is just a financial institution. It offers loans and time deposits but does…

Ans – (c) Explanation:- The Ministry of Finance of the government of India issues one rupee not and coins of all denominations as per section 6 of the coinage act, 2011. Additional Information:- It bears the signatures of the Finance…

Ans – (a) Solution:- Initial deposits = 1/6 of the total deposits Total deposits = Money Multiplier Money Multiplier = Initial Deposits/Total Deposits Money Multiplier = 1/1/6 Money Multiplier = 6 times

Ans – (d) Explanation:- Following are the functions of the Reserve Bank of India. 1. Currency Authority or Bank of Issue 2. Banker to the Government 3. Banker’s Bank and Supervisor 4. Controller of Money Supply and Credit

Ans – (c) Explanation:- Demand Deposits are deposits of the general public with commercial banks where account holders withdraw money on demand at any time with the help of cheques. with the help of technology, the amount can also be…

Ans – (c) Explanation:- Total Deposit = Initial Deposits × 1/LRR 4,000 = 400 × 1/LRR LRR = 400/4000 LRR = 1/10 LRR = 0.1

Ans – (b) Explanation:- In the absence of the circulation of any other currency in the economy. It means bank money such as demand deposits also does not exist. In this case, LRR also does not exist. Thus as per…