Money Banking and International Trade Test 5 Mcqs Preparation Online

1. Bank rate refer to the interest rate at which?

A. Central bank gives loans to commercial banks

B. Government loans are floated

C. Commercial banks grant loans to their customers

D. Commercial banks receive deposits from the public

2. Which one of the following will reduce the capacity of commercial banks to lend?

A. Sales of securities in the open market by the central bank

B. Reduction of the required cash reserves ratio

C. Reduction in the discount rate

D. Purchase of securities by the Central bank in the open market

3. In which country was the instrument of minimum legal cash reserves ratio for banks first introduced?

A. USA

B. Germany

C. UK

D. Japan

4. In a bimetallic standard?

A. Two metals (usually gold and silver) are simultaneously monetized and their monetary values are fixed as legal tender

B. All of the above

C. Both gold and silver coins circulate as unlimited legal tender

D. Coinage as well as exports and imports of both the metals are free

5. Which of the following is not a part of the un-organised Indian money market?

A. Chit funds

B. Indigenous bankers

C. Co-operative credit societies

D. Money lenders

6. If there is a significant decrease in the demand for loans, banks will be forced to?

A. Resort to creating credit

B. Adjust their protfolios

C. Sell securities to the public

D. Increase liquidity

7. One of the following is an instrument of qualitative credit control. Identify it?

A. Credit rationing

B. Minimum statutory cash reserves ratio

C. Open-market operations

D. Bank rate

8. The immediate effect of credit-creation by banks is?

A. Increase in real national income

B. Rise in prices

C. Reduction of poverty

D. Increase in money supply

9. Open market operations refer to the buying and selling of?

A. Gold

B. Government securities

C. Commercial bills

D. Foreign exchange

10. Selective credit control devices are used by the central bank of a country to?

A. Regulate the volume of aggregate bank credit in the economy

B. Regulate credit-creation on the part of some selected banks

C. Selectively allocate credit among banks

D. Control the flow of aggregate bank credit to different productive activities in the economy

Money Banking and International Trade Test 5 Mcqs Preparation Online

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