1. Which of the following currencies is not included in the Special Drawing Rights (SDR) Currency Basket?
[A] Indian Rupee
[B] British Pound
[C] Japanese Yen
[D] Chinese Renminbi
Show Answer
Correct Answer: A [Indian Rupee]
Notes:
The SDR basket now consists of the following five currencies: U.S. dollar 41.73%, Euro 30.93%, Renminbi (Chinese Yuan) 10.92%, Japanese Yen (8.33%), British Pound (8.09%).
2. The terms such as ‘placement, layering, integration of funds’ are related to which among the following?
[A] Fiscal Management
[B] Financial Stability
[C] Money Laundering
[D] Capital Market Trading
Show Answer
Correct Answer: C [Money Laundering]
Notes:
The process of laundering money generally involves three steps: placement, layering, and integration. Placement refers to injecting the “dirty money” into the legitimate financial system. Layering conceals the source of the money through a series of transactions and bookkeeping tricks. in Integration, the now-laundered money is withdrawn from the legitimate account to be used for desired purposes.
3. Which among the following is a suitable term for the state of economy in which economic activity is slowing down but wages and prices continue to rise ?
[A] Inflation
[B] Deflation
[C] Skweflation
[D] Stagflation
Show Answer
Correct Answer: D [Stagflation]
Notes:
Stagflation refers to persistent high inflation coupled with high unemployment and stagnant demand /growth in economy.
High Inflation + Low Economic Growth {or conditions of recession} + Low Employment Generation = Stagflation
4. The Unclaimed deposits are those deposits which haven’t been operated for ______?
[A] 5 years or more
[B] 7 years or more
[C] 10 years or more
[D] 12 years or more
Show Answer
Correct Answer: C [10 years or more]
Notes:
Unclaimed deposits are deposits where the proceeds/maturity has not been claimed for a period of 10 years or more. In other words, term deposits are deemed unclaimed if they are inactive/inoperative for more than 10 years.
5. In which of the five year plan in India, the concept of Financial Inclusion was included for the first time?
[A] 8th Five Year Plan
[B] 9th Five Year Plan
[C] 10th Five Year Plan
[D] 11th Five Year Plan
Show Answer
Correct Answer: D [11th Five Year Plan]
Notes:
The 11th Five Year Plan was implemented from 2007-2012, when Manmohan Sigh was India’s Prime Minster. The main slogan for the 11th FYP was “Faster and more inclusive growth”. The 11th FYP made special emphasis on Financial Inclusion, poverty reduction, empowerment through education and skill development etc.
6. If a commodity has more number of substitutes, the demand for this commodity will be _______?
[A] more elastic
[B] less elastic
[C] inelastic
[D] perfectly elastic
Show Answer
Correct Answer: A [more elastic]
Notes:
Substitute goods are those goods which can be used in place of each other. Examples of substitute goods are : tea and coffee; ghee and edible oil. In case of substitute goods like tea and coffee, demand for a commodity falls with a fall in the price of other substitute goods.
7. Which among the following is used for a situation of “Too much money chasing too few goods?
[A] Demand Pull Inflation
[B] Cost pull inflation
[C] Stagflation
[D] Hyperinflation
Show Answer
Correct Answer: A [Demand Pull Inflation]
Notes:
Demand-pull inflation refers to the inflation from rapid growth in aggregate demand and when excess demand causes ‘too much money chasing too few goods.’ This generally happens when an economy is growing at a faster rate.
8. Which of the following is not a Selective Credit Control measure?
[A] Margin Requirements
[B] Regulation of Consumer Credit
[C] Rationing of Credit
[D] Open Market Operations
Show Answer
Correct Answer: D [Open Market Operations]
Notes:
Qualitative or selective methods of credit control refers to those methods which limit the nature or variety of money supply rather than its quantity. Such methods include regulation of margin requirement, credit rationing, regulation of consumer credit and direct action. Open Market Operations is a quantitative method of credit control.
9. For which of the following, the Reserve Bank of India has stipulated a maximum Capital Adequacy Requirements in India?
[A] Private Sector Banks
[B] Banks that Undertake Insurance Business
[C] Local Area Banks
[D] Scheduled Commercial Banks
Show Answer
Correct Answer: C [Local Area Banks]
10. Which among the following are the features of Exchange Earners’ Foreign Currency Accounts:
- They are opened with RBI
- They Earn interests on deposits
- They need a minimum balance to be maintained by the account holder
Choose the correct options:
[A] Only 1
[B] 1 & 2
[C] 2 & 3
[D] None of them
Show Answer
Correct Answer: D [None of them]
Notes:
Exchange Earners’ Foreign Currency (EEFC) Accounts are special accounts in India that allow residents to hold foreign currency. 1. Opened with RBI: EEFC accounts are not directly opened with the Reserve Bank of India (RBI) but are maintained with authorized banks. 2. Earn interest: These accounts do earn interest on deposits, but the rate is typically lower than domestic currency accounts. 3. Minimum balance: There is no mandatory minimum balance requirement for EEFC accounts, making them flexible for account holders. Thus, the correct answer is “None of them” as none of the statements are entirely accurate.
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