Indian Economy MCQs

51. Which of the following is known as the “bank rate policy” instrument of the RBI?
A. Fiscal Policy
B. Monetary Policy
C. Trade Policy
D. Industrial Policy
Answer: B

52. The RBI regulates liquidity in the banking system mainly through:
A. Monetary Policy
B. Fiscal Policy
C. Foreign Policy
D. Labour Policy
Answer: A

53. Open Market Operations (OMO) refer to:
A. Purchase and sale of government securities by the RBI
B. Sale of foreign currency by banks
C. Trading of company shares
D. Import and export of goods
Answer: A

54. When the RBI purchases government securities from the market, it generally:
A. Reduces money supply
B. Increases money supply
C. Increases taxes
D. Reduces bank deposits
Answer: B

55. Which monetary tool requires banks to keep a percentage of deposits with the RBI?
A. SLR
B. CRR
C. Repo Rate
D. Bank Rate
Answer: B

56. Which monetary tool requires banks to maintain liquid assets with themselves?
A. CRR
B. SLR
C. Repo Rate
D. Reverse Repo Rate
Answer: B

57. A decrease in the Repo Rate generally:
A. Makes loans cheaper
B. Makes loans costlier
C. Reduces investment
D. Increases unemployment
Answer: A

58. The objective of Monetary Policy is to:
A. Conduct elections
B. Maintain price stability while supporting growth
C. Levy taxes
D. Frame foreign policy
Answer: B

59. Which institution publishes the Monetary Policy Statement in India?
A. Ministry of Finance
B. RBI
C. NITI Aayog
D. SEBI
Answer: B

60. Inflation reduces the:
A. Purchasing power of money
B. Money supply
C. Population
D. Tax collection
Answer: A