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Explore popular questions from RBI & its Monetary Policies for IBPS. This collection covers RBI & its Monetary Policies previous year IBPS questions hand picked by experienced teachers.

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Q 1. Which of the following is /are among the noticeable features of the recommendations of the Thirteenth Finance Commission?
1. A design for the Goods and Services Tax, and a compensation package linked to adherence to the proposed design.
2. A design for the creation of lakhs of jobs in the next
ten years in consonance with India's demographic dividend.
3. Devolution of a specified share of central taxes to local bodies as grants.
Select the correct answer using the codes given below

1 only

B

2 and 3

C

1 and 3

D

1,2 and 3

Explanation

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Q 2. Which one of the following statements regarding the levying, collecting, and distribution of Income Tax is correct?

The Union levies, collects, and distributes the proceeds of income tax between itself and the states.

B

The Union levies, collects, and keeps all the proceeds of income tax itself.

C

The Union levies and collects the tax but all the proceeds are distributed among the states

D

Only the surcharge levied on income tax is shared between the Union and the states.

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Q 3. Fiscal stability means that, other things remaining constant

debt-GDP ratio declines over time

B

both debt and GDP decrease over time

C

debt and GDP increase at the same rate

D

debt increases but GDP remains the same

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Q 4. Increase in net RBI credit for Central Government represents-
1. Budgetary Deficit
2. Revenue Deficit
3. Fiscal Deficit
4. Monetised Deficit
Choose the right option

A

1 only

B

1 and 2

C

3 only

4 only

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Q 5. Current account in the Balance of Payment comprise is
___?

A

difference of total exports and imports in one year

B

invisible account like tourism, shipping, insurance, etc.

C

transactions like net external assistance, NRI deposits, etc.

trade balance plus invisible balance

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Q 6. High fiscal deficit is cause for concern for any economy.
What does it denote?

A

It is a measure of the borrowing of an economy

It is total expenditure less total receipts excluding borrowings

C

It reflects the decrease in tax collections for the year

D

it means the lack of liquidity and earnings for the economy.

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Q 7. Which of the following statements is incorrect about Repo and Reverse Repo?
1. At present, the repo rate is {tex} 11.75 \% {/tex}
2. At present, the reverse repo rate is {tex} 5.75 \% {/tex}
3. Repo rate is the rate at which {tex}\mathrm{ RBI }{/tex} lends to commercial banks
4. Reverse Repo is the rate at which {tex}\mathrm{RBI}{/tex} borrows from commercial banks

1 only

B

1 and 2

C

1,3 and 4

D

None of the above

Explanation

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Q 8. Which of the following statements is/are correct in regards to Revenue budget?
1. It consists of all capital receipts and expenditure such as domestic and foreign loans, loan repayment, foreign and etc
2. It consists of all current receipts, such as taxation, dividends of public sector units (PSU's) and expenditure of the government

A

1 only

2 only

C

1 and 2

D

Neither 1 nor 2

Explanation

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Q 9. After {tex} 1947 , {/tex} development and non-development expenditures have increased, the increase in the former being more. Nondevelopment expenditure involves 1. interest payments 2. subsidies 3. defence 4. irrigation

A

1 and 2

B

1 only

1,2 and 3

D

2,3 and 4

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Q 10. With reference to the Indian Public Finance, consider the following statements.
1. External liabilities reported in the Union Budget are based on historical exchange rates.
2. The continued high borrowing has kept the real interest rates high in the economy.
3. The upward trend in the ratio of Fiscal Deficit to GDP in recent years has an adverse effect on private investments.
4. Interest payments is the single largest component of the non-plan revenue expenditure of the Union Government.
Which of these statements are correct?

A

1,2 and 3

B

1 and 4

2,3 and 4

D

1,2,3 and 4

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Q 11. Which of the following is a type of the Public expenditure in India?
1. Plan {tex} \quad {/tex} 2. Non-plan

A

1 only

B

2 only

1 and 2

D

Neither 1 nor 2

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Q 12. Convertibility of rupee implies

A

being able to convert rupee notes into gold

B

allowing the value of rupee to be fixed by market forces

freely permitting the conversion of rupee to other currencies and vice versa

D

developing an international market for currencies in India

Explanation

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Q 13. With reference to 'Cash Reserve Ratio', which of the following statements is/are correct?
1. The {tex}\mathrm{ RBI}{/tex} varies Cash Reserve Ratio to change the liquidity of market
2.{tex}\mathrm{ CRR}{/tex} is subject to frequent changes as {tex}\mathrm{ RBI}{/tex} intervenes from time to time to correct monetary or exchange rate imbalances
3. {tex}\mathrm{ CRR}{/tex} currently is {tex} 4 \% {/tex}
4. {tex} \mathrm { RBI } {/tex} is empowered to fix the {tex}\mathrm{ CRR}{/tex} at a rate ranging between three per cent and 15 per cent

A

1 only

B

1 and 2

C

3 only

1,2,3 and 4

Explanation



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Q 14. Consider the following statements in respect of Financial Commission:
1. It is mandatory to appoint a Finance Commission every five years.
2. Finance Commission lays down the principles governing grant-in-aid to states.
3. Finance Minister is the ex-officio Chairperson of the Finance Commission.
4. The award given by the Finance Commission is binding on Central and State governments.
Which of the above statements are correct?

A

1,2,3 and 4

1,2 and 4

C

1,2 and 3

D

1,3 and 4

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Q 15. Consider the following statements with regard to Statutory Liquidity Ratio (SLR)
1. To meet {tex}\mathrm{SLR}{/tex}, Commercial banks can use cash only. 2. {tex}\mathrm{SLR}{/tex} is maintained by the banks with themselves. 3. {tex}\mathrm{SLR}{/tex} restricts the banks leverage in pumping more money into the economy.
Which of the statements given above is/are correct?

A

1,2 and 3

B

1 and 3

2 and 3

D

only 2

Explanation

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Q 16. Which of the following refers to that part of deficit for which the government borrows from the RBI?
1. Primary deficit{tex}\quad{/tex} 2.Secondary deficit
3. Regulatory deficit 4 .Monetised deficit

A

1 only

B

1 and 2

C

3 only

4 only

Explanation

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Q 17. Which of the following has been introduced as a very important component of Direct Tax code with the objective of preventing such deals and transactions? 1. General Avoidance Rules 2. General Anti Affect Rules 3. General Anti Avoidance Rules 4. General Arm Affect Rules

A

1 only

B

2 only

3 only

D

4 only

Explanation

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Q 18. With reference to Union Budget, which of the following is/are covered under Non-Plan Expenditure?
1. Defence expenditure
2. Interest payments
3. Salaries and pensions
4. Subsidies
Select the correct answer using the code given below.

A

1 only

B

2 and 3 only

1,2,3 and 4

D

None

Explanation

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Q 19. Match columns {tex}\mathrm{A}{/tex} and {tex}\mathrm{B}{/tex} wherein Column{tex}\mathrm{B}{/tex} defines Column {tex}\mathrm{A}{/tex}

A

{tex} \mathrm { I } - \mathrm { c } , \mathrm { II } - \mathrm { a } , \mathrm { III } - \mathrm { b } {/tex}

{tex} \mathrm { I } - \mathrm { b } , \mathrm { II } - \mathrm { c } , \mathrm { III } - \mathrm { a } {/tex}

C

{tex} \mathrm { I } - \mathrm { a } , \mathrm { II } - \mathrm { d } , \mathrm { III } - \mathrm { b } {/tex}

D

{tex} \mathrm { I } - \mathrm { b } , \mathrm { II } - \mathrm { a } , \mathrm { III } - \mathrm { c } {/tex}

Explanation

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Q 20. Plan expenditure in India is met by-

Internal debt and other resources

B

Assistance from Aid India Club

C

Assistance from IMF

D

Assistance from OECD countries

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Q 21. With reference to Indian economy, consider the following.
{tex} \begin{array} { l l } { \text { 1. Bank rate } } & { \text { 2. Open market operations } } \\ { \text { 3. Public debt } } & { \text { 4. Public revenue } } \end{array} {/tex}
Which of the above is/are component/ components of Monetary Policy?

A

1 only

B

2,3 and 4

1 and 2

D

1,3 and 4

Explanation

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Q 22. Which one at the following is responsible for the preparation and presentation of Union Budget to the Parliament?

A

Department of Revenue

Department of Economic Affairs

C

Department of Financial Services

D

Department of Expenditure

Explanation

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Q 23. Which of the following statements of the government gives expression to its fiscal policy?
1. Annual financial statement
2. Deficit financing
3. Open capital account

1 only

B

1 and 2

C

3 only

D

1,2 and 3

Explanation