ECA03 — Banking and Monetary Policy

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Question 1

Repo Rate is the rate at which: (AFCAT PYQ)

AThe RBI borrows from commercial banks

BCommercial banks lend money to the public

CThe RBI lends short-term funds to commercial banks

DCommercial banks lend to each other overnight

Question 2

SLR (Statutory Liquidity Ratio) requires banks to maintain a portion of their deposits in: (AFCAT PYQ)

ACash kept in their own vaults

BDeposits maintained with the RBI

CGold, cash, or approved government securities

DForeign currency deposits abroad

Question 3

When RBI buys government securities in the Open Market, the effect is: (AFCAT PYQ)

AMoney supply in the economy decreases

BMoney supply in the economy increases

CInflation is immediately and fully controlled

DGovernment borrowing costs increase sharply

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ECA03 — Banking and Monetary Policy — Quiz