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2013 · Q43Indian EconomyMonetary Policy & Money Supplyeasy

An increase in the Bank Rate generally indicates that the

  1. (a)market rate of interest is likely to fall
  2. (b)Central Bank is no longer making loans to commercial banks
  3. (c)Central Bank is following an easy-money policy
  4. (d)Central Bank is following a tight-money policy
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Official answer(d) Central Bank is following a tight-money policy

2023 · Q22Indian EconomyMonetary Policy & Money Supplyeasy

Consider the following statements : Statement–I : In the post-pandemic recent past, many Central Banks worldwide had carried out interest rate hikes. Statement–II : Central Banks generally assume that they have the ability to counteract the rising consumer prices via monetary policy means. Which one of the following is correct in respect of the above statements?

  1. (a)Both Statement–I and Statement–II are correct and Statement–II is the correct explanation for Statement–I
  2. (b)Both Statement–I and Statement–II are correct and Statement–II is not the correct explanation for Statement–I
  3. (c)Statement–I is correct but Statement–II is incorrect
  4. (d)Statement–I is incorrect but Statement–II is correct
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Official answer(a) Both Statement–I and Statement–II are correct and Statement–II is the correct explanation for Statement–I

2022 · Q3Indian EconomyMonetary Policy & Money Supplymoderate

With reference to the Indian economy, consider the following statements : 1. If the inflation is too high, Reserve Bank of India (RBI) is likely to buy government securities. 2. If the rupee is rapidly depreciating, RBI is likely to sell dollars in the market. 3. If interest rates in the USA or European Union were to fall, that is likely to induce RBI to buy dollars. Which of the statements given above are correct ?

  1. (a)1 and 2 only
  2. (b)2 and 3 only
  3. (c)1 and 3 only
  4. (d)1, 2 and 3
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Official answer(b) 2 and 3 only

2021 · Q15Indian EconomyMonetary Policy & Money Supplymoderate

In India, the central bank’s function as the ‘lender of last resort’ usually refers to which of the following? 1. Lending to trade and industry bodies when they fail to borrow from other sources 2. Providing liquidity to the banks having a temporary crisis 3. Lending to governments to finance budgetary deficits Select the correct answer using the code given below.

  1. (a)1 and 2
  2. (b)2 only
  3. (c)2 and 3
  4. (d)3 only
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Official answer(b) 2 only