CURRENCY INFLATION MCQS SET 12

CURRENCY INFLATION MCQS SET 12

111) Consider the following elements
1. Broad Money (M3)
2. All deposits with Post Office Savings Banks
3. National Savings Certificates
Which of the elements given above are the parts of the M4 Money Supply in Indian Economy?
A) 1 and 2
B) 1 and 3
C) 2 and 3
D) All of these
Correct Answer: 1 and 2
   
112) Which one among the following is used to determine the monetisation of the economy?
A) The ratio of average M1 to GDP
B) The ratio of average M3 to GDP
C) The ratio of average M3 to M0
D) The ratio of average M1 to M0
Correct Answer: The ratio of average M1 to GDP
   
113) On which of the following committee's recommendation, RBI introduced base rate system?
A) MV Nair Committee
B) Deepak Mohanty Committee
C) Khandewal Committee
D) Nachiket Mor Committee
Correct Answer: Deepak Mohanty Committee
   
114) The Reserve Bank of India has initiated publication of a new set of monetary and liquidity aggregates as per the recommendations of the Working Group on Money Supply: Analytics and Methodology of Compilation. Then, which one of the following money supplies in India is remained unchanged as that of the old definitions?
A) M0
B) M1
C) M3
D) Both M0 and M1
Correct Answer: Both M0 and M1
   
115) Consider the following
1. Currency in Circulation.
2. Bankers' deposits with the RBI.
3. Call/Term Funding From Financial Institutions.
4. 'Other' deposits with the RBI.
Which of the components given above Is/are included In the calculation of Reserve Money In India?
A) 1 and 2
B) 2, 3 and 4
C) 1, 2 and 4
D) Only 2
Correct Answer: 1, 2 and 4

116) The higher rate of expansion in currency with the public and reserves as compared to that in deposits in an economy leads to
A) the money multiplier remains unchanged
B) increases at the first then decreases later on
C) an increase in the money multiplier
D) a decrease in the money multiplier
Correct Answer: a decrease in the money multiplier
   
117) Consider the following statements
1. During inflation, RBI buys government securities in the open market.
2. During deflation, RBI sells government securities in the open market.
Which of the above statements is/are true?
A) Only 1
B) Only 2
C) Both 1 and 2
D) None of the above
Correct Answer: Both 1 and 2
   
118) Which one of the following is used to determine the Money Multiplier in an economy?
A) M3/M2
B) M0/M3
C) M1/M3
D) M3/MO
Correct Answer: M3/MO
   
119) With the aim of containing inflation and anchoring inflationary expectations, recent time, Reserve Bank of India actively managed liquidity through the appropriate use of which one of the following?
A) Liquidity Adjustment Facility
B) Interest Subvention
C) Open Market Operations
D) Both 'a' and 'c'
Correct Answer: Both 'a' and 'c'
   
120) Which one of the following is the main composition of the New Broad Money (NM3) as per the recommendations of the Working Group on Money Supply: Analytics and Methodology of Compilation?
1. Narrow Money
2. Short-term time deposits of residents maturing at one year
3. Long-term time deposits of residents
4. Term Funding from Financial Institutions
Select the correct answer using the code given below
A) 1 and 2
B) 1 and 3
C) 2 and 3
D) All of the above
Correct Answer: All of the above