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Question 1 of 10
1. Question
2 points
Which of the following statements about the Human Development index (HDI) is
correct?
Correct
Ans c
The HDR measures development by combining three indicators—Health, Education and
Standard of Living—converted into a composite human development index, the HDI.
For the first time in 2020, the United Nations Development Programme introduced a new
metric to reflect the impact caused by each country’s per-capita carbon emissions and its
material footprint, which measures the amount of fossil fuels, metals and other resources
used to make the goods and services it consumes.
India is ranked at 131st position out of 190 countries by the United Nations Development
Programme (UNDP).
Incorrect
Ans c
The HDR measures development by combining three indicators—Health, Education and
Standard of Living—converted into a composite human development index, the HDI.
For the first time in 2020, the United Nations Development Programme introduced a new
metric to reflect the impact caused by each country’s per-capita carbon emissions and its
material footprint, which measures the amount of fossil fuels, metals and other resources
used to make the goods and services it consumes.
India is ranked at 131st position out of 190 countries by the United Nations Development
Programme (UNDP).
Question 2 of 10
2. Question
2 points
India’s decision for a planned economy was also moulded by some contemporary
experiences in the world. Which of the following is/are correct about it?
Correct
Ans c
Both statements are correct.
Incorrect
Ans c
Both statements are correct.
Question 3 of 10
3. Question
2 points
Consider the following statements:
1. The appreciation and depreciation of a currency is a feature of the floating exchange
rate regime.
2. The official annual rate of appreciation and depreciation of an asset are fixed by a
country.
3. The concept of deficit and surplus exists only in relation to the Current Account.
Which of the statements given above is/are correct?
Correct
Ans c
The concept of appreciation and depreciation are also linked to the increase and the
decrease in the value of an asset. Every asset undergoes wear and tear with time and hence
depreciates in its value. This depreciation is officially fixed by the government annually.
However, there is no such official fixation for the appreciation of assets as it is for the
depreciation of the assets.
Incorrect
Ans c
The concept of appreciation and depreciation are also linked to the increase and the
decrease in the value of an asset. Every asset undergoes wear and tear with time and hence
depreciates in its value. This depreciation is officially fixed by the government annually.
However, there is no such official fixation for the appreciation of assets as it is for the
depreciation of the assets.
Question 4 of 10
4. Question
2 points
Which of the given statements best describes the difference between the Repo Rate
and the Marginal Standing Facility?
Correct
Ans b
Incorrect
Ans b
Question 5 of 10
5. Question
2 points
With reference to various reserve ratios of RBI, consider the following statements:
1. Cash Reserve Ratio is to be maintained on a daily basis whereas the Statutory
Liquidity ratio is to be maintained on a fortnightly basis.
2. The Cash Reserve Ratio is to be maintained as per the Banking Regulation Act, 1949
whereas the Statutory Liquidity Ratio is to be maintained as per the Reserve Bank of
India Act, 1934.
3. The Reserve Bank of India can decide CRR without any floor or ceiling rate as per the
situational demands of the economy
Select the incorrect statements by using the codes given below:
Correct
Ans a
The amount of cash that the scheduled and non-scheduled commercial banks are required
to maintain with RBI with respect to their Net Deposit and Time Liabilities (on a fortnightly
basis) is called the Cash Reserve Ratio (CRR).
On the other hand, the Statutory Liquidity Ratio (SLR) is the amount of reserves that the
scheduled commercial banks are required to maintain with themselves on a daily basis in
safe and liquid assets such as government securities, gold and cash with respect to their
NDTL i.e., Net Deposit and Time Liabilities.
All Commercial and Cooperative Banks (either scheduled or non-scheduled) are required to
maintain CRR and SLR. For scheduled banks, the maintenance of CRR is governed through
The Reserve Bank of India Act 1934 and for Non-Scheduled banks CRR is governed through
Banking Regulation Act 1949.
The Banking Regulation Act 1949 (Section 24) governs maintenance of SLR for all banks
(Scheduled and non-scheduled) commercial and cooperative.
Incorrect
Ans a
The amount of cash that the scheduled and non-scheduled commercial banks are required
to maintain with RBI with respect to their Net Deposit and Time Liabilities (on a fortnightly
basis) is called the Cash Reserve Ratio (CRR).
On the other hand, the Statutory Liquidity Ratio (SLR) is the amount of reserves that the
scheduled commercial banks are required to maintain with themselves on a daily basis in
safe and liquid assets such as government securities, gold and cash with respect to their
NDTL i.e., Net Deposit and Time Liabilities.
All Commercial and Cooperative Banks (either scheduled or non-scheduled) are required to
maintain CRR and SLR. For scheduled banks, the maintenance of CRR is governed through
The Reserve Bank of India Act 1934 and for Non-Scheduled banks CRR is governed through
Banking Regulation Act 1949.
The Banking Regulation Act 1949 (Section 24) governs maintenance of SLR for all banks
(Scheduled and non-scheduled) commercial and cooperative.
Question 6 of 10
6. Question
2 points
In the context of Indian economy, which of the following events are likely to happen
as a result of the surge in the Capital Inflows of the country?
1. Increase the levels of investment which will result in economic growth
2. Indian Rupee will depreciate
3. Increased competitiveness of exports
4. Rise in inflation
Select the correct answer using the codes given below:
Correct
Ans c
The surging capital inflows can also lead to destabilizing side effects, including a tendency of
the local currency to appreciate. Hence, the Indian Rupee will appreciate instead of
depreciating as a result of increasing capital inflows. This will have a negative impact on the
exports of the country as it undermines the competitiveness of exports of the country.
Incorrect
Ans c
The surging capital inflows can also lead to destabilizing side effects, including a tendency of
the local currency to appreciate. Hence, the Indian Rupee will appreciate instead of
depreciating as a result of increasing capital inflows. This will have a negative impact on the
exports of the country as it undermines the competitiveness of exports of the country.
Question 7 of 10
7. Question
2 points
The terms ‘Dovish’ and ‘Hawkish’ are often seen in news in the context of:
Correct
Ans a
Expansionary policy is also called ‘Dovish’ or ‘Accommodative’ or ‘Easy Money Policy’.
Contractionary policy is also called ‘Hawkish’ or ‘Tight Money Policy’.
Incorrect
Ans a
Expansionary policy is also called ‘Dovish’ or ‘Accommodative’ or ‘Easy Money Policy’.
Contractionary policy is also called ‘Hawkish’ or ‘Tight Money Policy’.
Question 8 of 10
8. Question
2 points
The Reserve Bank of India regulates the public sector banks (PSBs) in matters of
1. Revoking the Banking license
2. Merger of banks
3. Winding-up of banks
Select the correct answer using the codes given below:
Correct
Ans d
RBI cannot revoke the banking licence as well.
In case of Private sector banks, RBI regulates the merger of banks, however, it doesn't have
the same powers when it comes to public sector banks.
RBI cannot merge or wind up the public sector banks because they are under the dual
regulation of RBI and Central Govt. Along with this, RBI also cannot supersede the board of
public sector banks.
Incorrect
Ans d
RBI cannot revoke the banking licence as well.
In case of Private sector banks, RBI regulates the merger of banks, however, it doesn't have
the same powers when it comes to public sector banks.
RBI cannot merge or wind up the public sector banks because they are under the dual
regulation of RBI and Central Govt. Along with this, RBI also cannot supersede the board of
public sector banks.
Question 9 of 10
9. Question
2 points
Consider the following financial institutions:
1. Non-Banking Financial Institutions (NBFCs)
2. National Bank for Agriculture and Rural Development
3. Cooperative Banks
4. Export and Import Bank of India
Which of the given financial institutions come under full-fledged regulation and supervision
of RBI?
Select the correct answer using the codes given below:
Correct
Ans d
Cooperative Banks however, are under dual regulation of RBI and Government. Banking
related functions are regulated by RBI and management related functions are regulated by
respective State governments or the Central Government, as the case may be.
Incorrect
Ans d
Cooperative Banks however, are under dual regulation of RBI and Government. Banking
related functions are regulated by RBI and management related functions are regulated by
respective State governments or the Central Government, as the case may be.
Question 10 of 10
10. Question
2 points
With reference to the banking system in India, a Bank Run can be said to have
occurred in which of the following circumstances?
Correct
Ans d
A bank run occurs when a large number of customers of a bank or other financial institution
withdraw their deposits simultaneously over concerns of the bank's solvency.
Incorrect
Ans d
A bank run occurs when a large number of customers of a bank or other financial institution
withdraw their deposits simultaneously over concerns of the bank's solvency.
