Roll No : Name of School : SMC Time : 19:10

Date : 2025-07-24 education

Marks: 100
Name of Assessment : Test:
Number System
Subject : Maths
Class : IX

1 Mention any one positive externality arising from a morning walk in a 1

park in the neighbourhood.

Ans :
Good health and happiness which promotes productive efficiency.

2 Goods purchased for satisfaction of wants are: 1

(a) Capital goods
(b) Final goods
(c) Consumption goods
(d) Intermediate goods

Ans : (c) Consumption goods

3 Goods purchased for the following purpose are final goods: 1

(a) For satisfaction of wants
(b) For investment in firm
(c) Both (a) and (b)
(d) None of these

Ans : (c) Both (a) and (b)

4 ___________ are those goods which require further processing or must 1

be resale in the same year.
(a) Final goods
(b) Consumer goods
(c) Capital goods
(d) Intermediate goods

Ans : (d) Intermediate goods

5 A quantity measured per unit of time period is known as: 1

(a) Stock variable
(b) Flow variable
(c) Inventory
(d) None of these

Ans : (b) Flow variable

6 Which one of the following is a flow variable? 1
(a) Consumption
(b) Wealth
(c) Quantity of money
(d) None of these

Ans : (a) Consumption

7 Consumption of fixed capital refers to fall in the value of fixed assets: 1

(a) Due to normal wear and tear
(b) Due to abnormal wear and tear
(c) Due to foreseen obsolescence
(d) Due to normal wear and tear and foreseen obsolescence.

Ans : (d) Due to normal wear and tear and foreseen obsolescence.

8 Which of the following leads to depreciation? 1

(a) Normal wear and tear
(b) Damages due to floods
(c) Damages due to market-crash
(d) None of these

Ans : (a) Normal wear and tear

9 Read the following figure carefully and choose the correct pair from 1
the alternatives given below:

Alternatives:
(a) Output, Production
(b) Value added, Production
(c) Output, Disposition
(d) Wealth, Development

Ans : (c) Output, Disposition

10 GNP at Market Price is measured as: 1

(a) GDP at Market Price – Depreciation
(b) GDP at Market Price + Net Factor Income from Abroad
 (c) GDP at Market Price + Subsidies
(d) NDP at Factor Cost + Net Factor Income from Abroad

Ans : (b) GDP at Market Price + Net Factor Income from Abroad

11 Read the following figure carefully and choose the correct pair from 1
the alternatives given below:

Alternatives:
(a) A – Profit, B – Royalty
(b) A – Compensation of employees; B – Operating expenses
(c) A – Depreciation; B – Royalty
(d) A – Royalty; B – Sales

Ans : (a) A – Profit, B – Royalty

12 Observe the given image carefully and choose the correct option from 1
the alternatives given below:
(a) A – Firms; B – Households; C – Land, Labour, Capital and
Enterprise; D – Goods and Services
(b) A – Households; B – Firms; C – Land, Labour, Capital and
Enterprise; D – Goods and Services
(c) A – Firms; B – Households; C – Goods and Services; D – Land,
Labour, Capital and Enterprise
(d) A – Households; B – Firms; C – Land, Labour, Capital and
Enterprise; D – Goods and Services

Ans :
(a) A – Firms; B – Households; C – Land, Labour, Capital and
Enterprise; D – Goods and Services

13 Suppose, following data is presented for an imaginary economy: 1

Sr. No Particulars Amount ( in lakhs)
(i) Depreciation 20
(ii) Domestic Sales 200
(iii) Change in Stocks (–) 10
(iv) Exports 10
 (v) Single use producer goods 120
(a) The value of Output will be 100 lakhs.
(b) The value of Gross Value Added at Market Price will be 20
lakhs.
(c) The value of Output will be 150 lakhs.
(d) The value of Gross Value Added at Market Price will be 80
lakhs.

(i)

Ans :
(d) The value of Gross Value Added at Market Price will be 80 lakhs.

14 National Income = Domestic Income, when: 1

(a) Net Factor Income from abroad (NFIA) is positive
(b) NFIA is negative
(c) NFIA is zero
(d) None of the above

Ans : (c) NFIA is zero

15 Product method of calculating national income is also known as: 1

(a) Income method
(b) Value added method
(c) Expenditure method
(d) Distribution method

Ans : (b) Value added method

16 The difference between indirect tax and subsidy is known as 1

__________.

(a) Net Factor Income from Abroad

(b) Capital Consumption Allowances

(c) Depreciation

(d) Net Indirect Tax

Ans : (d) Net Indirect Tax

17 Foreign embassies in India are a part of India’s: 1

(a) Economic territory
(b) Geographical territory
(c) Both (a) and (b)
 (d) None of these

Ans : (b) Geographical territory

18 Real GDP is considered as an index of: 1

(a) Price level in the economy
(b) Welfare of the people
(c) Profit maximisation
(d) None of these

Ans : (b) Welfare of the people

19Identify the correct pair from the following Column I and Column II 1
Column I Column II

A. Final goods
(i) Goods which are used for resale in the same year
B. Intermediate
(ii) Goods which are used for investment
goods
(iii) Goods which satisfy the wants of the consumers
C. Consumption
directly
goods
(iv) Goods which do not help in the production of other
D. Capital goods
goods and services
Alternatives:
(a) A – (i)
(b) B – (ii)
(c) C – (iii)
(d) D – (iv)

Ans : (c) C – (iii)

20From the statements given in Column I and Column II. Choose the correct pair. 1
Column I Column II

A. Vegetables grown in the personal garden (i) Non-marketing activity

B. A car used as a taxi (ii) Consumer good

C. An air-conditioner used by household (iii) Capital good

D. Scholarship given to students by government (iv) Factor income

Alternatives:

(a) A – (i)

(b) B – (ii)

(c) C – (iii)

(d) D – (iv)

Ans : (a) A – (i)

21 Assertion (A): Machine purchased is always a final good. 1

 Reason (R): Final goods directly satisfy the needs of consumers or
investment on fixed assets.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the
correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not
the correct explanation of Assertion (A)
(c) Assertion (A) is true but Reason (R) is false
(d) Assertion (A) is false but Reason (R) is true

Ans : (d) Assertion (A) is false but Reason (R) is true

22 Assertion (A): Stationary purchased in a school is an intermediate 1

good.
Reason (R): Intermediate goods once used in production lose their
utility.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the
correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not
the correct explanation of Assertion (A)
(c) Assertion (A) is true but Reason (R) is false
(d) Assertion (A) is false but Reason (R) is true

Ans :
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the
correct explanation of Assertion (A)

23 Assertion (A): Car purchased by a taxi driver to use as a taxi is a 1

consumer good.
Reason (R): Consumer goods are those which directly satisfy the
wants of consumers.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the
correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not
the correct explanation of Assertion (A)
(c) Assertion (A) is true but Reason (R) is false
(d) Assertion (A) is false but Reason (R) is true

Ans : (d) Assertion (A) is false but Reason (R) is true

24 Assertion (A): If the GDP of country is rising, the welfare may not rise 1
as a consequence.
Reason (R): The rise in GDP may be concentrated in the hands of very
few individuals.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the
correct explanation of Assertion (A)
 (b) Both Assertion (A) and Reason (R) are true and Reason (R) is not
the correct explanation of Assertion (A)
(c) Assertion (A) is true but Reason (R) is false
(d) Assertion (A) is false but Reason (R) is true

Ans :
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the
correct explanation of Assertion (A)

25 Statement 1: Books purchased by a book seller is an example of final 1

good.

Statement 2: Depreciation is a flow concept.

(a) Statement 1 is true and statement 2 is false

(b) Statement 1 is false and statement 2 is true

(c) Both statements 1 and 2 are true

(d) Both statements 1 and 2 are false

Ans : (b) Statement 1 is false and statement 2 is true

26 Statement 1: The formula to calculate the value of change in stock is 1

closing stock minus opening stock.

Statement 2: The formula to calculate the value of Net Import is

Import minus Export.

(a) Statement 1 is true and statement 2 is false

(b) Statement 1 is false and statement 2 is true

(c) Both statements 1 and 2 are true

(d) Both statements 1 and 2 are false

Ans : (c) Both statements 1 and 2 are true

27 In the production of sugar, sugarcane is a/an: 1

(a) final good

(b) capital good

(c) intermediate good

(d) None of these

Ans : (c) intermediate good

28 Capital goods are those goods which: 1

 (a) are used in the production process for several years.
(b) are used in the production process for few years.
(c) involve depreciation losses.
(d) Both (a) and (b)

Ans : (d) Both (a) and (b)

29 Which of the following statements is true? 1

(a) Bread is always a consumer good
(b) All producer goods are not capital goods
(c) Transfer income is received for providing a good or service in
return
(d) Interest paid by a household on car loan from a bank is a factor
payment

Ans : (b) All producer goods are not capital goods

30 ‘Income of the family’ is the example of which variable? 1

(a) Stock
(b) Flow
(c) Both (a) and (b)
(d) Neither (a) nor (b)

Ans : (b) Flow

31 Inventory is a __________ concept whereas the change in inventory is a 1

__________ concept.
(a) stock; flow
(b) flow; stock
(c) stock; stock
(d) flow; flow

Ans : (a) stock; flow

32 Read the following figure carefully and choose the correct pair from 1
the alternatives given below:

Alternatives:
 (a) A – Low level of income; B – Low level of investment
(b) A – Low level of investment; B – Low level of Income
(c) A – Low Mobilisation of savings; B – Low level of investment
(d) A – Low level of Investment; B – Low savings

Ans : (a) A – Low level of income; B – Low level of investment

33 Which of the following is not a factor payment? 1

(a) Free uniform to defence personnel
(b) Salaries to the members of Parliament
(c) Rent paid to the owner of a building
(d) Scholarship given to the students

Ans : (d) Scholarship given to the students

34 The following information is given for an imaginary economy. 1

(
Sr. No. Particulars
in crores)
Interest
(i) 700
Compensation of Employees
(ii) 3,000
Net Indirect Taxes
(iii) 500
Rent and Profit
(iv) 700
Transfer Payments by
(v) 10
Government
The value of NDPFC will be:

(a) 4,000 crores

(b) 4,200 crores

(c) 4,400 crores

(d) 4,600 crores

Ans : (c) 4,400 crores

35 __________ item will not be included while calculating national income 1

by the value added method?
(a) Owner-occupied Houses
(b) Own-account Production of fixed capital
(c) Production for self-consumption
(d) Voluntary work

Ans : (d) Voluntary work

36When Nominal Gross Domestic Product (GDP) is 840 crores and 1

price index is 120, then the Real Gross Domestic Product (GDP) will be:
 (a) 700 crores
(b) 900 crores
(c) 800 crores
(d) 500 crores

Ans : (a) 700 crores

37 With a rise in real national income, welfare of the people: 1

(a) Rises
(b) Falls
(c) Remains unchanged
(d) None of these

Ans : (a) Rises

38 From the set of statements given in Column I and Column II, choose 1
the correct pair of statements.
Column I Column II
A. Circular Flow
of Income (i) shows the two phases of
B. Vegetables grown the circular flow of income.
in the kitchen garden (ii) is a non - market activity.
C. A car used as a taxi (iii) is a consumer good.
D. An air conditioner (iv) is a capital good.
in a house
Alternatives:
(a) A – (i)
(b) B – (ii)
(c) C – (iii)
(d) D – (iv)

Ans : (b) B – (ii)

39 From the set of statements given in Column I and Column II, choose the correct pair of 1
statement:
Column I Column II
A. Park in the neighbourhood (i) Negative externality
B. Pollution created by factories (ii) P ositive
C. Vegetables grown in the backyard of the externality
house. (iii) Non-
D. Milk purchased by a tea stall on market activity
the roadside. (iv) Final good
 Alternatives:
(a) A – (i)
(b) B – (ii)
(c) C – (iii)
(d) D – (iv)

Ans : (c) C – (iii)

40 Assertion (A): Distance between two places is a stock concept. 1

Reason (R): Stock measures a variable over a period of time.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the
correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not
the correct explanation of Assertion (A)
(c) Assertion (A) is true but Reason (R) is false
(d) Assertion (A) is false but Reason (R) is true

Ans : (c) Assertion (A) is true but Reason (R) is false

41 Assertion (A): Scholarship given by government to the students is a 1

factor payment.
Reason (R): Factor payments are payment to someone for
contribution in production of goods and services.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the
correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not
the correct explanation of Assertion (A)
(c) Assertion (A) is true but Reason (R) is false
(d) Assertion (A) is false but Reason (R) is true

Ans : (d) Assertion (A) is false but Reason (R) is true

42 Statement 1: Market price is the difference between factor cost and 1

net subsidies.
Statement 2: Depreciation is added to net investment to convert into
gross investment.
(a) Statement 1 is true and statement 2 is false
(b) Statement 1 is false and statement 2 is true
(c) Both statements 1 and 2 are true
(d) Both statements 1 and 2 are false

Ans : (c) Both statements 1 and 2 are true

43 Statement 1: Net investment is a stock concept. 1

Statement 2 : Capital is a flow concept.
 (a) Statement 1 is true and statement 2 is false
(b) Statement 1 is false and statement 2 is true
(c) Both statements 1 and 2 are true
(d) Both statements 1 and 2 are false

Ans : (d) Both statements 1 and 2 are false

44 Goods purchased for satisfaction of wants are 1

(a) Capital goods
(b) Final goods
(c) Consumption goods
(d) Intermediate goods

Ans : (c)

45 Which of the following is an intermediate good? 1

(a) Machine
(b) Car
(c) Mobile
(d) Sugar cane in a sugar Mill

Ans : (d) Sugar cane in a sugar Mill

46 Identify the stock variable. 1

(a) Wealth
(b) Income
(c) Savings
(d) Capital formation

Ans : (a) Wealth

47 Which out of the following is not included in estimation of NI? 1

(a) Subsidised Lunch
(b) Old-age Pension
(c) Free Medical facilities served in office to employees
(d) Construction of a house

Ans : (b) Old-age Pension

48 Sector which transforms one physical good into another physical 1

good:
(a) Tertiary Sector
(b) Secondary Sector
(c) Primary Sector
(d) Joint Sector

Ans : (b) Secondary Sector

49 Which of the following item will not be included while calculating 1
national income by income method?
(a) Wages and Salaries
(b) Royalty
(c) Scholarship
(d) Profit

Ans : (c) Scholarship

50 Which of the following item will not be included while calculating 1

NDPMP?
(a) Private Final Consumption Expenditure
(b) Consumption of Fixed Capital
(c) Government Final Consumption Expenditure
(d) Net Exports

Ans : (b) Consumption of Fixed Capital

51 Value of output is equal to: 1

(a) Sales + Change in Stock
(b) Sales + Closing Stock
(c) Sales + Opening Stock
(d) Sales – Opening Stock

Ans : (a) Sales + Change in Stock

52 NVAFC Equals 1
(a) Factor Payments
(b) Current Transfer Payments
(c) Capital Transfer Payments
(d) Net Current Transfer from Rest of the World

Ans : (a) Factor Payments

53 NDPFC will be equal to 1

(a) NDPMP – Indirect Taxes
(b) NDPMP + Subsidies
(c) NDPMP – NIT
(d) NDPMP + Depreciation

Ans : (c) NDPMP – NIT

54 Consumption of fixed capital refers to fall in the value of fixed assets 1

(a) Due to normal wear and tear
(b) Due to abnormal wear and tear
(c) Due to foreseen obsolescence
(d) Due to normal wear and tear and foreseen obsolescence.
Ans : (d)

55 Net National Product at Factor cost is called: 1

(a) National Income
(b) Domestic Income
(c) Personal Income
(d) Private Income

Ans : (a)

56 NI = Domestic Income, when: 1

(a) Net Factor Income from abroad (NFIA) is positive
(b) NFIA is negative
(c) NFIA is zero
(d) None of the above

Ans : (c)

57 Flow of Goods and Services and factors of production across different 1

sectors in a barter economy is known as:
(a) Circular flow
(b) Real flow
(c) Monetary Flow
(d) Capital Flow

Ans : (b) Real flow

58 In which case net indirect taxes be equal to zero? 1

(a) Indirect taxes > Subsidies
(b) Indirect taxes < Subsidies
(c) Indirect taxes = Subsidies
(d) None of the above

Ans : (c) Indirect taxes = Subsidies

59 Money supply in India is: 1

(a) Currency with the public
(b) Demand deposits with the banks
(c) Currency with the public + Demand deposits with the banks
(d) None of them

Ans : (c)

60 Which out of the following items is not included in money supply of a 1

country?
(a) Time deposits
(b) Coins and Currency
 (c) Demand deposits
(d) None

Ans : (a)

61The ratio of total deposits that a commercial bank has to keep with 1
Reserve Bank of India is called : (Choose the correct alternative)
(a) Statutory Liquid Ratio
(b) Deposit Ratio
(c) Cash Reserve Ratio
(d) Legal reserve ratio

Ans : (c)

62 Number of times the total deposits would be of the initial deposit is 1

determined by:
(a) Cash Reserve Ratio
(b) Legal Reserve Ratio
(c) Statutory Liquidity Ratio
(d) Bank Rate

Ans : (b)

63 The part of LRR kept by the banks themselves is called: 1

(a) SLR
(b) CRR
(c) Reverse Repo Rate
(d) None of the above

Ans : (a)

64 The value of deposit multiplier is equal to: 1

(a)

(b)

(c)

(d) None of the given

Ans : (c)

65 Which bank in India is the controller of credit? 1

(a) Axis Bank
(b) Reserve Bank of India
(c) ICICI Bank
(d) Punjab National Bank
Ans : (b)

66 If an economy is to control recession like most of the Euro-Zone 1

nations, which of the following can be appropriate:
(i) Reducing Repo Rate
(iii) Both (i) and (ii)
(ii) Reducing CRR
(iv) None of (i) and (ii)

Ans : (iii)

67 Which of the following agency is responsible for issuing 1 currency 1

note in India?
(i) Reserve Bank of India
(iii) Ministry of finance
(ii) Ministry of Commerce
(iv) Niti Aayog

Ans : (iii)

68 _________ is the primary function of money. 1

(a) Transfer of value
(b) Medium of exchange
(c) Store of value
(d) Standard of deferred payment

Ans : (b)

69‘Money is an asset which can be stored for use in future.’ In the light of 1
given statement, identify the function of money.
(a) A measure of value
(b) A standard of deferred payment
(c) A store of value
(d) A medium of exchange

Ans : (c)

70 Read the given image carefully and choose the correct pair from the 1
alternatives given below:
 Alternatives:
(a) A – Unit of Account; B – Lack of Divisibility
(b) A – Lack of Divisibility; B – Difficulty in storing wealth
(c) A – Unit of Account; B – Standard of Deferred Payments
(d) A – Standard of Deferred Payments; B – Lack of Divisibility

Ans : (c)

71 In India, suppliers of money are: 1

(a) Government of the country
(b) Banking system of the country
(c) Both (a) and (b)
(d) None of these

Ans : (c)

72 The total stock of money in circulation among the public ______ is 1

called as ‘money supply’.
(a) during a period of time
(b) during a calendar year
(c) during a fiscal year
(d) at a particular point of time

Ans : (d)

73 Money supply is a __________ concept 1

(a) Flow
(b) Stock
(c) Both (a) and (b)
(d) Neither (a) nor (b)

Ans : (b)

74 __________ is the main source of money supply is an economy. 1

(a) Central bank
(b) Commercial banks
(c) Both (a) and (b)
 (d) Government

Ans : (c)

75Credit cards are excluded from all measures of the quantity of money, 1
because they are not really a method of payment, but a method of
deferring payment. When you buy a meal with a credit card, the bank
that issued the card pays the restaurant the amount that is due. At a
later date, you will have to repay the bank, perhaps with interest. For
this, you might use the money in your demand deposits, and
that money is included in the economy’s stock of money. Which of the
following can happen with an increased use of credit cards in an
economy?
(a) Increase in money supply
(b) Decrease in money supply
(c) Increase in money demand
(d) Decrease in money demand

Ans : (d)

76 __________ is an institution that accept deposits for lending 1

purposes.
(a) Commercial Banks
(b) Life Insurance Corporation
(c) Reserve Bank of India
(d) Government of India

Ans : (a)

77 Banks use the major portion of the deposits to: 1

(a) keep as reserve so that people may withdraw.
(b) meet their routine expenses.
(c) extend loans.
(d) meet renovation of bank.

Ans : (c)

78 Demand Deposits include _________ and __________. 1

(i) Saving account deposits
(ii) Fixed deposits
(iii) Current account deposits
(iv) Post office savings
Alternatives:
(a) (i) and (ii)
(b) (ii) and (iii)
(c) (i) and (iii)
 (d) (i) and (iv)

Ans : (c)

79 Which of the following deposits are also known as chequeable 1

deposits?
(a) Saving Account Deposits
(b) Demand Deposits
(c) Saving Account Deposits plus Fixed Account Deposits
(d) Current Account Deposits

Ans : (b)

80 ____________ is responsible for issuing 1 currency note in India. 1

(a) Reserve Bank of India
(b) Ministry of Commerce
(c) Ministry of finance
(d) Niti Aayog

Ans : (c)

81 Which of the following is correct with reference to Ministry of 1

Finance?
(a) It issues coins only.
(b) It issues all type of currency notes.
(c) It issues one rupee note and coins.
(d) It issues only one rupee note.

Ans : (c)

82 In the context of commercial banks, which of the following 1

alternatives is correct?
(i) Deposits are liabilities of banks.
(ii) Commercial banks are creator of money.
(iii) Commercial banks accept deposits of the general public.
(iv) A ccept deposits of World Bank for Agriculture and Rural
developments.
Identify the correct alternative from the following:
(a) (i) and (ii)
(b) (ii) and (iii)
(c) (i), (ii) and (iii)
(d) (i) and (iv)

Ans : (c)

83 The value of money multiplier is: 1

 (a) Inverse of Legal Reserve Ratio
(b) P roportionate to Legal Reserve Ratio
(c) Both (a) and (b)
(d) None of these

Ans : (a)

84Suppose in an economy, the initial deposits of 400 crores lead to the 1

creation of total deposits worth 4000 crores.
Under the given situation, the value of reserve requirements would be
___________.
(a) 0.01
(b) 1
(c) 0.1
(d) 0.4

Ans : (c)

85 If the reserve ratio is 20%, what will be the amount of total reserves 1
after an initial deposit of 200?
(a) 4,000
(b) 2,000
(c) 1,000
(d) 400

Ans : (c)

86 The value of deposit multiplier is equal to __________. 1

(a)

(b)

(c)

(d) None of these

Ans : (c)

87 __________ bank in India is the controller of credit. 1

(a) A xis Bank
(b) Reserve Bank of India
(c) ICICI Bank
(d) Punjab National Bank

Ans : (b)
88 Identify which of the following is not a function of the Reserve Bank 1
of India?
(a) To act as the banker to the Government of India
(b) To act as the custodian of gold reserve of India
(c) To act as the financial advisor to the Government of India
(d) To issue coins and one rupee note

Ans : (d)

89 Read the given image carefully and choose the correct pair from the 1
alternatives given below:

Alternatives:
(a) A – Banker’s bank; B – Controller of credit
(b) A – Accepting deposits; B – Credit creation
(c) A – Credit creation; B – Banker to the government
(d) A – Advancing loans; B – Purchase and sale of securities

Ans : (a)

90 From the following functions of the Central Bank, identify the odd one 1
out:

Alternatives:
(a) A
(b) B
(c) C
(d) D

Ans : (b)

91 The ‘lender of last resort’ means: 1

 (a) the government coming to the rescue of poor farmers.
(b) Central Bank coming to the rescue of other banks in times of
financial crisis.
(c) commercial banks coming to the rescue of small industrial units.
(d) None of these

Ans : (b)

92“Reserve Bank of India (RBI) imposes 25 lakh penalty on Axis Bank 1

for violating KYC rules.” —September 1, 2020 A person read this
headline and wondered which of the following functions, RBI has
performed while doing this?
(a) Banker to the government
(b) Banker’s bank and supervision
(c) Custodian of FOREX
(d) Controller of money supply

Ans : (b)

93Mr. Kishan, an economics teacher, was explaining the concept of 1

‘sometimes commercial banks are in need of funds in emergency and
this happens in times when banks suffer the ‘crisis of confidence’ of its
depositors’. From the following, choose the correct alternative which
specifies the function of central bank explained by him.
(a) Issue of currency
(b) Lender of last resort
(c) Banker’s bank
(d) Banker to the government

Ans : (b)

94 The Central Bank acts as a banker to the government because: 1

(i) it provides short-term credit to the government.
(ii) it provides foreign exchange to the government to repay external
debt.
(iii) it manages public debt, i.e., to manage all new issues of
government loans.
(iv) it advises the government on banking and financial matters.
Alternatives:
(a) (i) and (iii)
(b) (ii) and (iv)
(c) (i), (ii) and (iii)
(d) (i), (ii), (iii) and (iv)
Ans : (d)

95 Quantitative instrument of RBI can be: 1

(a) Bank Rate policy
(b) Cash Reserve Ratio
(c) Statutory Liquidity Ratio
(d) All of these

Ans : (d)

96 The instruments of monetary policy of Reserve Bank of India (RBI) 1

are:
(i) Bank Rate
(ii) Repo Rate
(iii) Reverse Repo Rate
(iv) Cash Reserve Ratio
Alternatives:
(a) (i) and (iii) are correct
(b) (ii) and (iv) are correct
(c) (i), (ii) and (iii) are correct
(d) (i), (ii), (iii) and (iv) are correct

Ans : (d)

97 To reduce credit availability in the economy, the Central Bank may 1

__________.
(a) buy securities in the open market
(b) Sell securities in the open market
(c) reduce reserve ratio
(d) reduce repo rate

Ans : (b)

98 Number of times the total deposits would be of the initial deposit is 1

determined by __________.
(a) Cash Reserve Ratio
(b) Legal Reserve Ratio
(c) Statutory Liquidity Ratio
(d) Bank Rate

Ans : (b)

99 The process of buying and selling of securities by the Central Bank of 1

a country is known as __________.
 (a) Margin Requirement
(b) Open Market Operations
(c) Cash Reserve Ratio
(d) Statutory Liquidity Ratio

Ans : (b)

100Assertion (A): Money kept with RBI is the part of money supply in 1
India.
Reason (R): RBI supply money in India.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the
correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not
the correct explanation of Assertion (A)
(c) A ssertion (A) is true but Reason (R) is false
(d) A ssertion (A) is false but Reason (R) is true

Ans : (d)