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- Question 1 of 20
1. Question
Which one of the following is not an instrument of selective credit control in India? [1995]
CorrectVariable Reserve Ratio (Cash Reserve Ratio) is aimed to control only volume of credit (quantitative method) not both volume and purpose of credit for which bank gives loans. (Qualitative method and selective control method are used for these purposes. It has a number of limitations.
IncorrectVariable Reserve Ratio (Cash Reserve Ratio) is aimed to control only volume of credit (quantitative method) not both volume and purpose of credit for which bank gives loans. (Qualitative method and selective control method are used for these purposes. It has a number of limitations.
UnattemptedVariable Reserve Ratio (Cash Reserve Ratio) is aimed to control only volume of credit (quantitative method) not both volume and purpose of credit for which bank gives loans. (Qualitative method and selective control method are used for these purposes. It has a number of limitations.
- Question 2 of 20
2. Question
Bank Rate implies the rate of interest: [1995]
CorrectBank Rate is that rate of interest at which central bank of a country provides refinancing facilities to commercial banks. The bank rate, a benchmark rate at which RBI buys or re-discounts bills of exchange or other commercial papers eligible for purchase. Every bank needs refinancing as it is very difficult to match borrowings and flow of deposits.
IncorrectBank Rate is that rate of interest at which central bank of a country provides refinancing facilities to commercial banks. The bank rate, a benchmark rate at which RBI buys or re-discounts bills of exchange or other commercial papers eligible for purchase. Every bank needs refinancing as it is very difficult to match borrowings and flow of deposits.
UnattemptedBank Rate is that rate of interest at which central bank of a country provides refinancing facilities to commercial banks. The bank rate, a benchmark rate at which RBI buys or re-discounts bills of exchange or other commercial papers eligible for purchase. Every bank needs refinancing as it is very difficult to match borrowings and flow of deposits.
- Question 3 of 20
3. Question
Consider the following: [1995]
1. Industrial Finance Corporation of India
2. Industrial Credit and Investment Corporation of India
3. Industrial Development Bank of India
4. Unit Trust of India
The correct sequence in which the above were established is:CorrectIFCI – July 1948; ICICI – 1955; IDBI – July 1964; UTI – 1963
IncorrectIFCI – July 1948; ICICI – 1955; IDBI – July 1964; UTI – 1963
UnattemptedIFCI – July 1948; ICICI – 1955; IDBI – July 1964; UTI – 1963
- Question 4 of 20
4. Question
As part of the liberalisation programme and with a view to attract foreign exchange, the government and the RBI have, devised two scheme known as FCNR ‘A’ and FCNR ‘B’.
Which of the following is/are true regarding these two schemes? [1995]
1. Under scheme ‘A’ RBI bears exchange rate fluctuations.
2. Under scheme ‘B’ other banks are to meet out the difference in exchange rate fluctuations.
3. Both the schemes stand withdrawn now.
4. Only scheme ‘A’ has been withdrawn.
Codes:CorrectUnder the FCNR (A) Scheme, the RBI bore any exchange rate risk, while in the case of FCNR (B) Scheme banks have to bear the exchange rate risk. The FCNR (A) Scheme was replaced by the FCNR (B) Scheme in 1994.
IncorrectUnder the FCNR (A) Scheme, the RBI bore any exchange rate risk, while in the case of FCNR (B) Scheme banks have to bear the exchange rate risk. The FCNR (A) Scheme was replaced by the FCNR (B) Scheme in 1994.
UnattemptedUnder the FCNR (A) Scheme, the RBI bore any exchange rate risk, while in the case of FCNR (B) Scheme banks have to bear the exchange rate risk. The FCNR (A) Scheme was replaced by the FCNR (B) Scheme in 1994.
- Question 5 of 20
5. Question
Hawala transactions relate to payments: [1996]
CorrectHawala is an illegal method of remittance across countries. There are money brokers who are the middle men who undertake hawala transfer. This method of remittance does not involve physical movement of cash. It is also known as Hundi. The word Hawala means trust. The Hawala system works as it is based on mutual trust between the hawala agents. It works outside the banking system and legal financial systems. The remittance happen based on communication between the hawala agents. It is an alternate to traditional remittance system.
IncorrectHawala is an illegal method of remittance across countries. There are money brokers who are the middle men who undertake hawala transfer. This method of remittance does not involve physical movement of cash. It is also known as Hundi. The word Hawala means trust. The Hawala system works as it is based on mutual trust between the hawala agents. It works outside the banking system and legal financial systems. The remittance happen based on communication between the hawala agents. It is an alternate to traditional remittance system.
UnattemptedHawala is an illegal method of remittance across countries. There are money brokers who are the middle men who undertake hawala transfer. This method of remittance does not involve physical movement of cash. It is also known as Hundi. The word Hawala means trust. The Hawala system works as it is based on mutual trust between the hawala agents. It works outside the banking system and legal financial systems. The remittance happen based on communication between the hawala agents. It is an alternate to traditional remittance system.
- Question 6 of 20
6. Question
The sum of which of the following constitutes Broad Money in India? [1997]
1. Currency with the public
2. Demand deposits with banks
3. Time deposits with banks
4. Other deposits with RBI
Choose the correct answer using the codes given below:CorrectNarrow money is the most liquid part of the money supply because the demand deposits can be withdrawn anytime during the banking hours. Time deposits on the other hand have a fixed maturity period and hence cannot be withdrawn before expiry of this period. When we add the time despots into the narrow money, we get the broad money, which is denoted by M3. M3 = Narrow money + Time Deposits of public with banks. We note here that the Broad money does not include the interbank deposits such as deposits of banks with RBI or other banks. At the same time, time deposits of public with all banks including the cooperative banks are included in the Broad Money.
IncorrectNarrow money is the most liquid part of the money supply because the demand deposits can be withdrawn anytime during the banking hours. Time deposits on the other hand have a fixed maturity period and hence cannot be withdrawn before expiry of this period. When we add the time despots into the narrow money, we get the broad money, which is denoted by M3. M3 = Narrow money + Time Deposits of public with banks. We note here that the Broad money does not include the interbank deposits such as deposits of banks with RBI or other banks. At the same time, time deposits of public with all banks including the cooperative banks are included in the Broad Money.
UnattemptedNarrow money is the most liquid part of the money supply because the demand deposits can be withdrawn anytime during the banking hours. Time deposits on the other hand have a fixed maturity period and hence cannot be withdrawn before expiry of this period. When we add the time despots into the narrow money, we get the broad money, which is denoted by M3. M3 = Narrow money + Time Deposits of public with banks. We note here that the Broad money does not include the interbank deposits such as deposits of banks with RBI or other banks. At the same time, time deposits of public with all banks including the cooperative banks are included in the Broad Money.
- Question 7 of 20
7. Question
The banks are required to maintain a certain ratio between their cash in hand and total assets. This is called: [1998]
CorrectSLR or the Statutory Liquidity Ratio is that portion of total deposits which a commercial bank has to maintain with itself at any given point of time in the form of liquid assets like cash in hand, current balances with other banks and first class securities which can be turned into cash (gold, cash or other approve securities). This ratio at present is 25%. Some assets have to be in liquid form to take care of financial emergencies which every bank has to face. It regulates the credit growth in India.
IncorrectSLR or the Statutory Liquidity Ratio is that portion of total deposits which a commercial bank has to maintain with itself at any given point of time in the form of liquid assets like cash in hand, current balances with other banks and first class securities which can be turned into cash (gold, cash or other approve securities). This ratio at present is 25%. Some assets have to be in liquid form to take care of financial emergencies which every bank has to face. It regulates the credit growth in India.
UnattemptedSLR or the Statutory Liquidity Ratio is that portion of total deposits which a commercial bank has to maintain with itself at any given point of time in the form of liquid assets like cash in hand, current balances with other banks and first class securities which can be turned into cash (gold, cash or other approve securities). This ratio at present is 25%. Some assets have to be in liquid form to take care of financial emergencies which every bank has to face. It regulates the credit growth in India.
- Question 8 of 20
8. Question
The accounting year of the Reserve Bank of India is: [1998]
CorrectThe central bank’s accounting year runs from July 1 to June 30. On 11 Mar, 1940, RBI Accounting Year changed from Jan-Dec to July-June.
IncorrectThe central bank’s accounting year runs from July 1 to June 30. On 11 Mar, 1940, RBI Accounting Year changed from Jan-Dec to July-June.
UnattemptedThe central bank’s accounting year runs from July 1 to June 30. On 11 Mar, 1940, RBI Accounting Year changed from Jan-Dec to July-June.
- Question 9 of 20
9. Question
Which one of the following is the correct sequence of decreasing order of the given currencies in terms of their value in Indian Rupees? [1998]
CorrectIncorrectUnattempted - Question 10 of 20
10. Question
The farmers are provided credit from a number of sources for their short and long term needs. The main sources of credit to the farmers include: [1999]
CorrectRegional rural banks were established under RRB Act 1976. They provide credit to agriculture and other rural activities. As of March 2014, the number of RRBs has been reduced to 57.
IncorrectRegional rural banks were established under RRB Act 1976. They provide credit to agriculture and other rural activities. As of March 2014, the number of RRBs has been reduced to 57.
UnattemptedRegional rural banks were established under RRB Act 1976. They provide credit to agriculture and other rural activities. As of March 2014, the number of RRBs has been reduced to 57.
- Question 11 of 20
11. Question
Since 1980, the share of the tertiary sector in the total GDP of India has: [1999]
CorrectThe share of the tertiary sector in the total GDP or Gross Domestic Product of India is increasing which is a sign of economic development. This reproduces the trend shown by western countries as they were developing.
IncorrectThe share of the tertiary sector in the total GDP or Gross Domestic Product of India is increasing which is a sign of economic development. This reproduces the trend shown by western countries as they were developing.
UnattemptedThe share of the tertiary sector in the total GDP or Gross Domestic Product of India is increasing which is a sign of economic development. This reproduces the trend shown by western countries as they were developing.
- Question 12 of 20
12. Question
Consider the following statements regarding Reserve Bank of India: [2001]
1. It is a banker to the Central Government
2. It formulates and administers monetary policy
3. It acts as an agent of the Government in respect of India
4. It handles the borrowing programme of Government of India
Which of these statements are correct?CorrectFunctions of RBI: sole authority to issue currency; government’s bank; banker’s bank; guardian of money market; lender of the last resort; sole reservoir of Foreign exchange reserves; controller of credit; clearing house for settling inter bank transactions. It follows an independent monetary policy.
IncorrectFunctions of RBI: sole authority to issue currency; government’s bank; banker’s bank; guardian of money market; lender of the last resort; sole reservoir of Foreign exchange reserves; controller of credit; clearing house for settling inter bank transactions. It follows an independent monetary policy.
UnattemptedFunctions of RBI: sole authority to issue currency; government’s bank; banker’s bank; guardian of money market; lender of the last resort; sole reservoir of Foreign exchange reserves; controller of credit; clearing house for settling inter bank transactions. It follows an independent monetary policy.
- Question 13 of 20
13. Question
Consider the following: [2002]
1. Currency with the public
2. Demand deposits with banks
3. Time deposits with banks
Which of these are included in Broad Money (M3) in India?CorrectNarrow money is the most liquid part of the money supply because the demand deposits can be withdrawn anytime during the banking hours. Time deposits on the other hand have a fixed maturity period and hence cannot be withdrawn before expiry of this period. When we add the time deposits into the narrow money, we get the broad money, which is denoted by M3.
M3 = Narrow money + Time Deposits of public with banks. We note here that the Broad money does not include the interbank deposits such as deposits of banks with RBI or other banks. At the same time, time deposits of public with all banks including the cooperative banks are included in the Broad Money.IncorrectNarrow money is the most liquid part of the money supply because the demand deposits can be withdrawn anytime during the banking hours. Time deposits on the other hand have a fixed maturity period and hence cannot be withdrawn before expiry of this period. When we add the time deposits into the narrow money, we get the broad money, which is denoted by M3.
M3 = Narrow money + Time Deposits of public with banks. We note here that the Broad money does not include the interbank deposits such as deposits of banks with RBI or other banks. At the same time, time deposits of public with all banks including the cooperative banks are included in the Broad Money.UnattemptedNarrow money is the most liquid part of the money supply because the demand deposits can be withdrawn anytime during the banking hours. Time deposits on the other hand have a fixed maturity period and hence cannot be withdrawn before expiry of this period. When we add the time deposits into the narrow money, we get the broad money, which is denoted by M3.
M3 = Narrow money + Time Deposits of public with banks. We note here that the Broad money does not include the interbank deposits such as deposits of banks with RBI or other banks. At the same time, time deposits of public with all banks including the cooperative banks are included in the Broad Money. - Question 14 of 20
14. Question
Consider the following financial institutions of India: [2002]
1. Industrial Finance Corporation of India (IFCI)
2. Industrial Credit and Investment Corporation of India (ICICI)
3. Industrial Development Bank of India (IDBI)
4. National Bank for Agriculture and Rural Development (NABARD)
The correct chronological sequence of the establishment of these institution is:CorrectIFCI – 1948; ICICI – 1955; IDBI – 1964; NABARD – 1982
IncorrectIFCI – 1948; ICICI – 1955; IDBI – 1964; NABARD – 1982
UnattemptedIFCI – 1948; ICICI – 1955; IDBI – 1964; NABARD – 1982
- Question 15 of 20
15. Question
Debenture holders of a company are its: [2003]
CorrectDebenture is a long-term bond issued by a company in return for a loan which have a fixed rate of interest.
IncorrectDebenture is a long-term bond issued by a company in return for a loan which have a fixed rate of interest.
UnattemptedDebenture is a long-term bond issued by a company in return for a loan which have a fixed rate of interest.
- Question 16 of 20
16. Question
In the last one decade, which one among the following sectors has attracted the highest Foreign Direct Investment inflows into India? [2004]
CorrectService sector received 21% of total FDI flow between 2006 to 2010.
IncorrectService sector received 21% of total FDI flow between 2006 to 2010.
UnattemptedService sector received 21% of total FDI flow between 2006 to 2010.
- Question 17 of 20
17. Question
Consider the following statements: [2004]
1. The National Housing Bank the apex institution of housing finance in India, was set up as a whollyowned subsidiary of the Reserve Bank of India
2. The Small Industries Development Bank of India was established as a whollyowned subsidiary of the Industrial Development Bank of India
Which of the statements given above is/are correct?CorrectThe National Housing Bank (NHB) is a state owned bank and regulation authority in India, created on July 8, 1988 under section 6 of the National Housing Bank Act (1987). The headquarters is in New Delhi. The institution, owned by the Reserve Bank of India, was established to promote private real estate acquisition. NHB is regulating and re-financing social housing programs and other activities like research and IT-initiatives, too.
Small Industries Development Bank of India is an independent financial institution for the growth and development of micro, small and medium scale enterprises in India. Set up in 2 April, 1990 through an Act of Parliament, it was incorporated initially as a wholly owned subsidiary of Industrial Development Bank of India.IncorrectThe National Housing Bank (NHB) is a state owned bank and regulation authority in India, created on July 8, 1988 under section 6 of the National Housing Bank Act (1987). The headquarters is in New Delhi. The institution, owned by the Reserve Bank of India, was established to promote private real estate acquisition. NHB is regulating and re-financing social housing programs and other activities like research and IT-initiatives, too.
Small Industries Development Bank of India is an independent financial institution for the growth and development of micro, small and medium scale enterprises in India. Set up in 2 April, 1990 through an Act of Parliament, it was incorporated initially as a wholly owned subsidiary of Industrial Development Bank of India.UnattemptedThe National Housing Bank (NHB) is a state owned bank and regulation authority in India, created on July 8, 1988 under section 6 of the National Housing Bank Act (1987). The headquarters is in New Delhi. The institution, owned by the Reserve Bank of India, was established to promote private real estate acquisition. NHB is regulating and re-financing social housing programs and other activities like research and IT-initiatives, too.
Small Industries Development Bank of India is an independent financial institution for the growth and development of micro, small and medium scale enterprises in India. Set up in 2 April, 1990 through an Act of Parliament, it was incorporated initially as a wholly owned subsidiary of Industrial Development Bank of India. - Question 18 of 20
18. Question
Consider the following statements: [2004]
1. Reserve Bank of India was nationalized on 26 January, 1950
2. The borrowing programme of the Government of India is handled by the Department of Expenditure, Ministry of Finance
Which of the statements given above is/are correct?CorrectRBI was established in 1935 and was nationalized on 1 January, 1949. RBI handles the borrowing programme of the central and State Governments.
IncorrectRBI was established in 1935 and was nationalized on 1 January, 1949. RBI handles the borrowing programme of the central and State Governments.
UnattemptedRBI was established in 1935 and was nationalized on 1 January, 1949. RBI handles the borrowing programme of the central and State Governments.
- Question 19 of 20
19. Question
Consider the following statements: [2005]
1. Sensex is based on 50 of the most important stocks available on the Bombay stock Exchange (BSE).
2. For calculating the Sensex, all the stock are assigned proportional weightage.
3. New York Stock Exchange is the oldest stock exchange in the world.
Which of the statements given above is/are correct?CorrectThe ‘BSE SENSEX’ is a value-weighted index composed of 30 stocks and was started in 1 January, 1986. The origin of the NYSE can be traced to 17 May, 1792. Amsterdam stock exchange (1602) is considered oldest in the world and was established by the Dutch East India company.
IncorrectThe ‘BSE SENSEX’ is a value-weighted index composed of 30 stocks and was started in 1 January, 1986. The origin of the NYSE can be traced to 17 May, 1792. Amsterdam stock exchange (1602) is considered oldest in the world and was established by the Dutch East India company.
UnattemptedThe ‘BSE SENSEX’ is a value-weighted index composed of 30 stocks and was started in 1 January, 1986. The origin of the NYSE can be traced to 17 May, 1792. Amsterdam stock exchange (1602) is considered oldest in the world and was established by the Dutch East India company.
- Question 20 of 20
20. Question
Which one of the following Indian banks is not a nationalized bank? [2006]
CorrectFederal Bank is a major Indian commercial bank in the private sector, headquartered at Kochi, Kerala.
IncorrectFederal Bank is a major Indian commercial bank in the private sector, headquartered at Kochi, Kerala.
UnattemptedFederal Bank is a major Indian commercial bank in the private sector, headquartered at Kochi, Kerala.