MONEY AND BANKING TEST
TEST 3
1. Which monetary system is followed in India? (1)
2. The rate at which the Reserve Bank of India parks the surplus funds of various commercial banks is known as
(a) CRR (b) Repo rate (1)
(c) Reverse Repo Rate (d) SLR
3. Legal Reserve Ratio bears _______relation which the credit created
(a) direct (b) Indirect (1)
(c) relative (d) None of the above
4. If in a hypothetical uni-banking system, initial deposits are ₹20,000 crore and LRR=10%, what would be the amount of derivative deposits and credit creation? (3)
5. Distinguish between cash reserve ratio and statutory liquidity ratio? (4)
6. Discuss the relation between money supply and general price level in economy? (4)
7. Elaborate the process of credit creation with the help of a hypothetical numerical example. (4)
8. Discuss the following functions of a Central Bank
(a) Currency Issuer (b) Custodian of Forex Reserves (3 + 3)
9. Explain the various tools available with the Reserve Bank of India to control credit creation process? (6)