Indian Economy Questions Practice Question and Answer

Q:

If Reserve Bank of India reduces the cash reserve ratio, it will :

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  • 1
    increase credit creation
    Correct
    Wrong
  • 2
    decrease credit creation
    Correct
    Wrong
  • 3
    have no impact on credit creation
    Correct
    Wrong
  • 4
    have no definite impact on credit creation
    Correct
    Wrong
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Answer : 1. "increase credit creation"

Q:

In a cut motion, when the amount of demand is reduced by Rs 100/- , it is known as

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  • 1
    Disapproval of policy cut
    Correct
    Wrong
  • 2
    Economy cut
    Correct
    Wrong
  • 3
    Vote on Account
    Correct
    Wrong
  • 4
    Token cut
    Correct
    Wrong
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Answer : 4. "Token cut"

Q:

Subsidies mean that is

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  • 1
    payment by government for purchase of goods and services
    Correct
    Wrong
  • 2
    payment made by business enterprises to factors of production
    Correct
    Wrong
  • 3
    payment made by companies to shareholders
    Correct
    Wrong
  • 4
    payment made by the government to business enterprises, without buying any goods and services
    Correct
    Wrong
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Answer : 4. "payment made by the government to business enterprises, without buying any goods and services"

Q:

If the RBI adopts an expansionist open market operations policy, this means that it will

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  • 1
    buy securities from non-government holders
    Correct
    Wrong
  • 2
    sell securities in the open market
    Correct
    Wrong
  • 3
    offer commercial banks more credit in the open market
    Correct
    Wrong
  • 4
    openly announce to the market that it intends to expand credit
    Correct
    Wrong
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Answer : 3. " offer commercial banks more credit in the open market"

Q:

Short-term finance is usually for a period ranging up to

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  • 1
    5 months
    Correct
    Wrong
  • 2
    10 months
    Correct
    Wrong
  • 3
    12 months
    Correct
    Wrong
  • 4
    8 months
    Correct
    Wrong
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Answer : 3. "12 months "

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