EASY
Earn 100

Explain how 'margin requirements' are helpful in controlling credit creation.

Important Questions on Money and Banking

HARD
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System
 In order to reduce credit in the country, RBI may:
EASY
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System
_____ instruments of monetary policy affect the direction of money supply in the economy.
HARD
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System
To decrease money supply in the economy, reverse repo rate should be _____.
HARD
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System
If Legal Reserve Ratio is 25%, then value of credit multiplier would be _____.
EASY
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System
Money Multiplier = 1/ ?.
EASY
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System
_____  instruments of monetary policy affect the volume of money supply in the economy. 
HARD
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System
Which of the following are most appropriate in reference to tools used by the Central bank to control money supply?
EASY
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System
Bank Rate is also known as _____.
EASY
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System
Commercial Banks earn interest from lending money. So, they want to lend the maximum possible amount. However, there is a limit to credit creation by banks and this is determined by _____ which is fixed by Central Bank.
EASY
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System
_____  is exact opposite of Repo Rate.
EASY
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System

Primary Deposits + Secondary Deposits = _____ of the Commercial Banks.
 

HARD
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System

Value of Money Multiplier, _____ (increases/decreases/remains unchanged) with an increase in Cash Reserve Ratio.

EASY
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System
Repo rate or _____ rate is the rate at which RBI lends money to commercial banks to meet their short-term needs.
HARD
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System

Which of the following is correct in reference to Reserve Bank of India?

 

EASY
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System
_____ is the apex bank in the economy?
EASY
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System
One rupee note and all coins are issued by the _____.
EASY
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System
_____ is the policy adopted by the Central Bank of an economy in the direction of credit control or money supply. 
EASY
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System
_____ refers to buying and selling of government securities by the Central Bank from/to public and commercial banks. 
 
EASY
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System
_____  refers to minimum percentage of net demand and time liabilities which commercial banks are required to maintain with themselves.
EASY
Economics>Macroeconomics>Money and Banking>Money Creation by Banking System

Cash deposits with the Commercial Banks are _____ (Primary/Secondary) Deposits.