Monetary Economics

Who is the Central monetary policy Authority in India?

• RBI

• Finance Ministry

• Parliament

• Prime Minister

Who is empowered to control the expansion of bank credit?

• finance minister

• home minister

• commercial Bank

• RBI

What is meant by Repo Rate?

i) Rate at which RBI lends commercial banks in place of Govt. Securities

ii) Rate at which commercial banks lend the clients

• only i

• only ii

• both i and ii

• none of the above

Which of the following is a step that the central bank will take to increase the overall availability of credit?

• it will sell the governement securities in the market

• it will buy more government securities from the market

• it will raise the reverse repo rate

• it will raise the repor rate

Which of the following statements represents the main functions of the central bank in a country?

• it is responsible for the regulation over the supply of money in the market

• it is responsible for the issuance of notes withing the country

• it acts as a banker both to the governments and to other banks in the country

• all of the above

Which of the following statements is true about credit creation by banks?

• banks create credit on the basis of their total assets

• banks create credit on the basis of their total deposit

• banks create credit on tbe basis of their total securities

• Banks create credit out of nothin

To help the country's credit situation, the RBI may sell securities in the open market. Say true or false.

• true

• false

• both

• nothing

Which of the statements below is true?

• M3 is the most liquid money supply measure

• M2 is the most liquid money supply measure

• M1 is the most liquid money supply measure

• All of the statements are true

Which of the following is the closest to the money?

• securities

• bonds

• insurance policy

• all of these above

When the supply for money increase and the demand for money reduces, there will be

• a fall in the level of prices

• a decrease in the rate of interest

• an increase in the rate of interest

• a fall in the level of demand