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Explore popular questions from Micro Finance & Economics for IBPS. This collection covers Micro Finance & Economics previous year IBPS questions hand picked by experienced teachers.

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Q 1. What is the difference between Inflation and Deflation?
1. {tex}\quad{/tex} Inflation is an increase in price of goods while Deflation is that state in which the value of money rises and the price of goods and services falls.
2. {tex} \quad {/tex} Deflation is an increase in price of goods while inflation is that state in which the valueof moneyrises and the price of goods and services falls.
3. {tex}\quad{/tex} Inflation is that state in which the value of money rises and the price of goods and services falls while defletion is an increase in price of goods.
Choose the correct difference between inflation and Deflation.

1 only

B

2 only

C

3 only

D

1,2,3

Explanation

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Q 2. The state of deflation appears in the economy due to various reason:
1. When the Government withdraws money from circulation.
2. When Government imposes heavy direct taxes or takes heavy loans from the public
3. When the Central Bank buys the securities in open market
Choose the correct reason.

1 and 2

B

2 and 3

C

1 and 3

D

1,2,3

Explanation



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Q 3. Match List-I with List-II and
select the correct answer using the codes given below the lists.

A

{tex} \mathrm { A } - 1 ; \mathrm { B } - 2 ; \mathrm { C } - 3 ; \mathrm { D } - 5 {/tex}

{tex} \mathrm {A - 4 ;} \mathrm B - 3 ; \mathrm C - 2 ;\mathrm D - 5 {/tex}

C

{tex} \mathrm { A } - 4 ; \mathrm { B } - 3 ; \mathrm { C } - 2 ; \mathrm { D } - 1 {/tex}

D

{tex}\mathrm A - 3 ;\mathrm B - 4 ;\mathrm C - 2 ;\mathrm D - 1 {/tex}

Explanation

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Q 4. Consider the following statement:
1. Capital market deals with long-term finance funds.
2. Capital Market includes all facilities and institutional arrangements available for borrowing and lending of term funds(including medium-term).
3. Long-term funds are raised either by borrowing from certain institutions or by issuing securities.
Choose the correct statement.

A

1 only

B

2 only

C

3 only

All of the Above

Explanation

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Q 5. Match List-I with List-II and
select the correct answer using the codes given below the lists.

A

i-a, ii-b, iii-c, iv-d

i-b, ii-a, iii-c, iv-d

C

i-d, ii-c, iii-b, iv-a

D

i-c, ii-b, iii-a, iv-d

Explanation

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Q 6. What are the reforms of Narsimham Committee on Banking sector?
1. Nationalisation of banks should not take place any more.
2. Private and foreign banks should be set up to promote competition.
3. There should be a phased reduction of CRR and SLR.
Choose the correct option.

A

1 only

B

2 only

C

3 only

All of the Above

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Q 7. Choose the type of capital market:
1. Securities Market
2. Financial institutions
3. Gill-edged market
4. Incorporated securities
Which among the following code is correct?

A

1 and 4

B

1 and 3

1 and 2

D

3 and 4

Explanation

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Q 8. According to the Chakravarthy Committee, one of the
principal causes affecting price stability in India is:

A

existence of black money

violent fluctuation in agricultural production

C

India's precarious balance of payment position

D

fiscal deficit

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Q 9. A rapid increase in the rate of inflation is sometimes attributed to the "base effect". What is "base effect"?

A

It is the impact of drastic deficiency in supply due to failure of crops

B

It is the impact of the surge in demand due to rapid economic growth

It is the impact of the price levels of previous year on the calculation of inflation rate

D

None of the statements (a), ( b ) and (c) given above is correct in this context.

Explanation

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Q 10. Which among the following is a correct definition of Fiduciary Issue of notes?

The issue of currency notes without metallic backing.

B

The issue of currency notes with metallic backing.

C

The issue of currency notes with partial metallic backing.

D

The issue of currency notes with proportional metallic backing.

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Q 11. ______are conducted by the RBI by selling and buying government securities from banks.
1. Bank rate
2. Cash reserve ratio
3. Open market operations
4. Statutory Liquidity Ratio
Choose the correct code.

A

1 only

B

2 only

3 only

D

4 only

Explanation

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Q 12. Among the supply side measures to contain inflation is:

A

postponing public expenditure

B

mopping up excess liquidity through taxation

C

credit control measures of RBI

maintaining price levels through an effective PDS

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Q 13. Consider the following in regards of types of loan:
1. Draft Loan {tex}\quad{/tex} 2.Term loan
3. Cash credit {tex} \quad {/tex}4. Overdraft
Choose the one which is not a loan.

1 only

B

2 only

C

3 only

D

4 only

Explanation

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Q 14. _______deals with long-term finance (more than 365 days) funds. It includes all facilities and institutional arrangements available for borrowing and lending of term funds (including medium-term).
1. Capital market
2. Stock market
3. Debit
4. Crebit
Choose the correct answer.

1 only

B

2 only

C

3 only

D

4 only

Explanation

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Q 15. What all are local authorities?
1. City corporations
2. Municipalities
3. Port trusts
Choose the incorrect option.

A

1 only

B

2 only

C

3 only

None of the Above

Explanation

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Q 16. Who all are the main players in the Indian capital market?
1. Insurance companies
2. Development Finance Institutions (DFI)
3. Non-Banking Finance Companies, (NBFCs)
4. Non-Banking Financial Institutions.
Choose the correct option.

1,2,3,4

B

1,2,3

C

1,2

D

1

Explanation

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Q 17. What are the authorities of {tex} \mathrm{SEBI} {/tex}?
1. Oversee the working of stock exchanges
2. Regulate merchant banks and mutual funds
3. Register and regulate intermediaries such as stock brokers
Choose the incorrect answer.

A

1 only

B

2 only

C

3 only

None of the Above

Explanation

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Q 18. Consider the following statement:
1. IRDA is a multimember agency
2. It is vested with regulatory powers in respect of the insurance sector similar to those vested in SEBI in respect of the capital markets and of RBI for the banking sector.
3. The IRDA Act, 1999 cleared the way for private sector entry into the insurance business.
Choose the correct statement.

A

1 only

B

2 only

C

3 only

All of the Above

Explanation

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Q 19. Consider the following statement:
1. As per recommendations of the Narasimham Committee, it has been decided that credit facilities granted by banks will be classified into performing and non-performing assets (NPA)
2. NPA is a loan which is in default for more than nine months.
Choose the incorrect statement.

A

1 only

2 only

C

1 and 2

D

None of the Above

Explanation

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Q 20. Consider the following statement.
1. NABARD stands for National Bank for Agriculture and Rural Design .
2. NABARD is an apex developmental bank in India.
3. Setting up of NABARD was recommended by the committee to review arrangements for institutional credit for agriculture and rural development, set up by the RBI, under the chairmanship of Shri B. Sivaraman.
Which statement is incorrect?

1 only

B

2 only

C

3 only

D

4 only

Explanation

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Q 21.
select the correct answer using the codes given below the lists.

A

i-a, ii-b, iii-c

i-b, ii-a, iil-c

C

i-c,ii-b,iii-a

D

i-a, ii-c, iil-b

Explanation

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Q 22. Consider the following statement:
1. Bombay Stock Exchange (BSE) is India's oldest stock exchange
2. It formally came into being in {tex} \mathrm {1888}{/tex}
3. It was a regional exchange till {tex} \mathrm {2002} {/tex} when it became a national exchange
Choose the incorrect statement regarding BSE.

A

1 only

B

2 only

3 only

D

None of the Above

Explanation

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Q 23. ___is set up to promote liquidity to stocks of small and medium enterprises.
1. Indo Next
2. Interconnected Stock Exchange of India
3. Over the Counter Exchange of India
4. Bombay Stock Exchange
Choose the correct code.

1 only

B

2 only

C

3 only

D

4 only

Explanation

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Q 24. Consider the following liquid assets:
1. Demand deposit with the banks
2. Time deposit with the banks
3. Savings deposit with the banks
4. Currency
The correct sequences of these assets in the decreasing order of liquidity is:

A

{tex} 1 - 4 - 3 - 2 {/tex}

B

{tex} 4 - 3 - 2 - 1 {/tex}

C

{tex} 2 - 3 - 1 - 4 {/tex}

{tex} 4 - 1 - 3 - 2 {/tex}

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Q 25. Consider the following statement regarding inflation:
1. Inflation is beneficial for senior citizen
2. Inflation is beneficial for fixed income citizen
3. Inflation is beneficial for borrowers
Choose the person who gets the benefit of inflation.

A

1 only

B

1 and 2

C

2 only

3 only

Explanation