Money Creation by Banking System
Money Creation by Banking System: Overview
This topic covers concepts such as, Money Creation by Banking System etc.
Important Questions on Money Creation by Banking System
What is the term for the total amount of money in circulation in an economy, including all forms of money?
Which economist is known for formulating the theory of money supply and credit creation?
What is the name of the ratio that banks must maintain between their reserves and deposits?
Which term describes the process by which banks create money through lending?
What is the initial deposit in the banking system called?
Which among the following is not a part of Qualitative measure of Monetary Policy of RBI ?
Which of the following is not a function of the Central Bank ?
Which of the following is a function of RBI?
Match List-I with List-II
| List I | List II |
| (A) Monetary Base | (I) Loans extended by banks |
| (B) Assets | (II) Reserve Bank of India |
| (C) Liabilities | (III) Currency |
| (D) Credit control | (IV) Deposits accepted by the banks |
If the reserve ratio is 10% and the initial deposit with the commercial banks are 450 cr, the total money creation by the banking system will be:
Identify the quantitative tools used by RBI to control money supply.
(A) Moral Suasion
(B) Bank Rate
(C) Cash Reserve Ratio
(D) Open Market Operations
(E) Margin requirement
Choose the correct answer from the options given below:
The RBI can influence money supply by changing ______ commercial Banks at which it gives loans to the commercial banks.
Repo-Rate is the rate at which RBI lends money to commercial Banks for:
All those elements which create liability and decrease the assets of the government are known as:
