Money and Credit

Banks provide a higher rate of interest on which of the following accounts?

• Saving account

• Fixed account for long period of time

• Current account

• Fixed account for short period of time

What percentage of deposits are kept as cash by the commercial banks in India?

• 25%

• 20%

• 15%

• 10%

What is Statutory Liquidity Reserve?

• Statutory Liquidity Reserve is a certain percentage of the total deposits that must be kept with the commercial bank.

• Statutory Liquidity Reserve is a certain percentage of the total bank deposits must be kept with the Central Bank of the country (RBI)

An increase in the rate of SLR will;

• Increase Lending activities by Commercial Banks

• Decrease lending activities by Commercial Banks

• Will not impact lending at all

What is the main source of income of a bank?

• Bank charges that the depositors pay for ; keeping their money safe is the main ; source of the bank’s income.

• The difference between what is charged from the borrowers and paid to the depositors is the main source of bank’s income.

• Banks earn huge amounts of money by investing the money of the depositors in various company shares.

• The Government of India gives huge amounts of money to the banks to help their smooth functioning.

An agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment refers to;

• Debt

• Deposit

• Credit

• Collateral

The modern forms of money include ____________ and ____________ .

A ____________ is the apex institution of monetary system of a country.

Currency (coins and notes) is a ____________ which cannot be refused in payment for transactions.

The deposits in a bank which are payable on demand are called ____________ .