Monetary Policy and Central Banking

Economics ⇒ Government and the Economy

Monetary Policy and Central Banking starts at 11 and continues till grade 12. QuestionsToday has an evolving set of questions to continuously challenge students so that their knowledge grows in Monetary Policy and Central Banking. How you perform is determined by your score and the time you take. When you play a quiz, your answers are evaluated in concept instead of actual words and definitions used.

See sample questions for grade 11

Define 'repo rate' in the context of monetary policy.

Describe the process by which the central bank controls credit through the Cash Reserve Ratio (CRR).

Describe the role of the central bank in controlling inflation.

Explain how an increase in the Statutory Liquidity Ratio (SLR) affects the lending capacity of commercial banks.

Explain the difference between quantitative and qualitative tools of monetary policy.

Explain the impact of a decrease in the repo rate on the economy.

Explain the term 'credit control' in the context of central banking.

Explain the term 'lender of last resort' in the context of central banking.

If the RBI wants to increase the money supply in the economy, which of the following actions should it take? (1) Increase CRR (2) Sell government securities (3) Decrease repo rate (4) Increase SLR

If the Reserve Bank of India increases the Cash Reserve Ratio (CRR), what will be the likely effect on the money supply? (1) Increase (2) Decrease (3) No effect (4) Cannot say

Which institution is responsible for formulating and implementing monetary policy in India? (1) Ministry of Finance (2) Reserve Bank of India (3) State Bank of India (4) NITI Aayog

Which of the following is a direct instrument of monetary policy? (1) Open Market Operations (2) Moral Suasion (3) Selective Credit Control (4) Margin Requirements

Fill in the blank: The ________ is the central monetary authority in India.

Fill in the blank: The ________ is the rate at which the central bank lends to commercial banks for short-term needs against government securities.

Fill in the blank: The ________ is the rate at which the central bank lends to commercial banks without any security.

Fill in the blank: The ________ rate is the rate at which the central bank absorbs liquidity from commercial banks by borrowing from them.

True or False: An increase in the repo rate by the RBI makes borrowing cheaper for commercial banks.

True or False: Selective credit controls are used to regulate the flow of credit to particular sectors of the economy.

True or False: The central bank can use open market operations to either increase or decrease the money supply in the economy.

True or False: The Reserve Bank of India can influence the interest rates in the economy through its monetary policy tools.