Bank Rate and Repo Rate

Q.

What Are the Advantages of Macroeconomics?

Q.

The rate at which RBI lends money to commercial banks is called:

1. Revise repo rate

2. Renewal repo rate

3. Repo rate

4. Reverse repo rate

Q.

Explain Deflationary Gap and the role of 'Open Market Operations' in reducing this gap.

Q.

By purchasing government securities in the open market, the central bank intends to release greater money supply in the market.

Q.

The full form of 'repo' is repurchase operation. What is the significance of repurchase?

1. Banks sell its securities to RBI to get loans at repo rate, with an agreement to buy back (repurchase) the securities from RBI at a later date

2. RBI sell its securities to banks to get loans at repo rate, with an agreement to buy back (repurchase) the securities from banks at a later date

3. Both A and B

4. None of the above

Q.

Explain the role of reverse repo rate in controlling money supply.

Q.

Reverse Repo Rate is a tool used by RBI to

1. None of these

2. To keep liquidity at one level

3. Inject liquidity

4. Absorb liquidity

Q. Reverse Repo Rate is a tool used by RBI to liquidity.

1. to keep a constant
2. inject
3. absorb
4. remove

Q.

Explain how do 'operations' by the central bank affect money creation by commercial banks.

Q. Answer in detail.
Explain in details Repo Rate and Reverse Repo Rate of Central Bank.

Q.

What are the alternative definitions of money supply in India?

Q.

What is the Repo rate in full form?

Q.

The RBI is regularly revising upwards the repo & reverse repo rates. Why is this being resorted to?

1. To make bank loan costlier

2. To curb growth of black money

3. To check inflationary pressures in the economy

4. To encourage rise in interest rates on deposits

Q.

If the RBI wants to increase the credit flow, it buys ______.

1. None of the above

2. Other local and short-term securities

3. Shares and Debentures

4. Government securities

Q.

What is meant by managed floating exchange rate?

Q.

The increase in the ___will increase the cost of borrowing and lending of the banks.

1. Repo Rate

2. Reverse Repo Rate

3. Base Rate

4. None of these

Q.

What is the role of a central bank in floating exchange rate and managed floating rate?

Q.

Which feature of money is reflected in the statement "It separated the act of sale and purchase?

Q.

What is bank rate?

Q. When TR increases at a constant rate, MR should be:

1. Zero
2. Decreasing
3. Constant
4. Increasing

Q. When the RBI makes open market operations by sale of securities the money supply in the banking system?

1. Reduces
2. Increases
3. Is not affected at all
4. Difficult to say anything

Q. How do changes in Bank Rate affect money supply in an economy? Explain.

Q. Government of India has recently launched "Jan-Dhan Yojna" aimed at every household in the country to have at least one bank account. Explain how deposits made under the plan are going to affect national income of the country.

Q. Explain how 'Repo Rate' can be helpful in controlling credit creation.

Q. Dear money policy means ___________.

1. giving loan and advances to trade and industry at higher interest rate.
2. paying less for the same quantity of goods and services.
3. printing high denomination currency.
4. printing money by costly technology.

Q.

Reverse repo rate is the rate at which

1. None of the above

2. banks provide loans to another banks

3. banks provide loans to RBI

4. banks take loans from RBI

Q. 'Machine purchased is always a final good.' Do you agree with the statement? Give reasons for your answer.

Q.

Bank rate is the rate at which

1. commercial banks borrow long-term funds from the central bank

2. the central bank borrows short-term funds from commercial banks

3. the central bank borrow long-term funds from commercial banks

4. commercial banks borrow short-term funds from the central bank

Q. What is reverse repo rate and repo rate

Q. What is meant by Margin Requirement? How does the Central Bank use this measure to control deflationary conditions in an economy?