1. Which of the following is/are true about the “Sub-Prime Crisis”- term
(1) It is a Mortgage crisis referring to Credit default by the borrowers.
(2) Sub-Prime borrowers were those borrowers who were rated low and were high risk borrows.
(3) This crisis originated out of negligence in credit rating of the borrowers.
(a) Only 1
(b) Only 2
(c) Only 3
(d) All of the above
(e) None of the above

2. High rate of investment may ____?
(a) Reduce the amount of credit creation
(b) Create better chance for the credit creation
(c) Not affect the amount of credit in any way
(d) Lead to any of the above-mentioned occurrences
(e) None of the above

3. For which are the reserves maintained before the following?
(a) One rupee notes
(b) One rupee coins
(c) All notes and coins
(d) RBI notes
(e) None of the above

4. The ‘monetary base for credit expansion’ consists of _____?
(a) The total value of ‘high-powered money’
(b) The demand and time deposit liabilities
(c) The size of the deficit in the government’s budget
(d) All of these
(e) None of the above

5. A rise in the reserve ratio of banks ____?
(a) Will lead to an increase in the money supply
(b) Will lead to a proportionate increase in the money
(c) Will lead to a decrease in the money supply
(d) Will lead to increase in cost of deposits
(e) None of the above

6. Which of the following is a borrowing facility/loan advance?
(a) Term finance
(b) Performance guarantee
(c) Bill received under letter of credit
(d) All the above
(e) None of the above

7. What is the minimum period of medium and long-term loans?
(a) 12 months
(b) 18 months
(c) 24 months
(d) 36 months
(e) None of the above

8. Any note, which is wholly or partially, obliterated, shrunk, washed, altered or indecipherable is a/an
a) mutilated note,
b) imperfect note,
c) soiled note,
d) mismatched note,
e) none of these

9. In order to safeguard the interest of the Bank, Cash credit accounts are closed ____?
(a) On the death of the agent
(b) On the death of the principal borrower
(c) On the death of the Managing Director of the company
(d) All of these
(e) None of the above

10. If all the banks in an economy are nationalised and converted into a monopoly bank, total deposit creation ____?
(a) Will increase
(b) Will decrease
(c) Will neither increase nor decrease
(d) All the above
(e) None of the above

Answers –
1. D
2. B
3. D
4. A
5. C
6. A
7. B
8. B
9. B
10. C



Please enter your comment!
Please enter your name here