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Money, Banking and Financial Institutions 01
Question
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of 15
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Q1. In which of the following years, India switched over to decimal currencies?
A.
1955
B.
1957
C.
1950
D.
1956
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
B
India moved from the 16-anna system to the decimal system (100 paise) on April 1
Q2. When was new rupee symbol was selected by Union Cabinet?
A.
10-Jul
B.
2010
C.
15-Jul
D.
2010
E.
10-Jul
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
2011
15-Jul
Q3. Dear Money Policy implies
A.
high price level
B.
large money supply
C.
high production
D.
high interest rates
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
D
Dear money policy refers to a contractionary monetary policy where credit becomes expensive due to high interest rates.
Q4. First bank of limited liability managed by Indians and founded in 1881 was
A.
Hindustan Commercial Bank
B.
Oudh Commercial Bank
C.
Punjab National Bank
D.
Punjab and Sind Bank
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
B
Oudh Commercial Bank was the first bank with limited liability managed by an Indian board.
Q5. Since 1983, the RBI’s responsibility with respect to Regional Rural Banks was transferred to
A.
ARDC
B.
SBI
C.
NABARD
D.
PACs
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
C
Since the establishment of NABARD
Q6. Life Insurance Corporation (LIC) of India was established in?
A.
1955
B.
1956
C.
1957
D.
1958
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
B
LIC was formed on September 1
Q7. Which one of the following is not a ’Money Market Instrument?
A.
Treasury bills
B.
Commercial paper
C.
Certificate of Deposit
D.
Equity shares
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
D
Equity shares are capital market instruments; the others are short-term money market instruments.
Q8. The bank which has the highest number of branches in the world is?
A.
State Bank of India
B.
RBS
C.
London Bank
D.
Canara Bank
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
A
State Bank of India (SBI) is a Fortune 500 company and the largest public sector bank in India with a massive global footprint.
Q9. If Cash Reserve Ratio (CRR) is reduced, supply of money will
A.
Increases
B.
Decreases
C.
Remains constant
D.
None of these
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
A
Lowering CRR leaves more cash with banks, allowing them to lend more and increase the money supply.
Q10. If all banks are nationalized and converted into a monopoly, total deposits
A.
will decrease
B.
will increase
C.
will neither increase nor decrease
D.
None of the above
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
C
Consolidating banks into one entity changes ownership structure but does not inherently create or destroy the existing deposits.
Q11. Keynesian model: change in quantity of money leads to price level change via?
A.
investment-employment
B.
employment-investment
C.
investment-rate of interest
D.
rate of interest-investment-employment-output
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
D
Money supply change affects interest rates, which affects investment, then employment/output, and finally prices.
Q12. The co-operative credit societies have a
A.
two-tier structure
B.
three-tier structure
C.
four-tier structure
D.
five-tier structure
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
B
The structure consists of Primary Credit Societies (village), Central Co-op Banks (district), and State Co-op Banks.
Q13. The first bank managed by Indians was?
A.
Oudh Bank
B.
Punab National Bank
C.
Oriental Bank of Commerce
D.
State Bank of India
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
A
Oudh Commercial Bank (1881) was the first; PNB (1894) was the first 'purely' Indian bank to survive.
Q14. Industrial Finance Corporation of India (IFCI) was established in:
A.
1946
B.
1947
C.
1948
D.
1949
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
C
IFCI was the first development financial institution set up by the government in 1948 to provide long-term finance.
Q15. First Regional Rural Bank (RRB) came into existence in
A.
1973
B.
1974
C.
1975
D.
1976
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
C
Prathama Bank was the first RRB, established on Oct 2, 1975, in Moradabad, UP.
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