1. The Issue Department of the RBI maintains a _______ against printing of notes:
(a) Minimum Reserve System
(b) Proportional Reserve System
(c) Proportional Gold Reserve System
(d) Proportional Foreign Securities Reserve System
2. Devaluation of currency by a country is meant to lead to :
1. expansion of import trade
2. promotion of import substitution
3. expansion of export trade
(a) 1 only
(b) 2 and 3
(c) 1 and 2
(d) 1 and 4
3. Which of the following is incorrect about convertibility?
(a) The exchange rate should be determined by the forces of demand and supply of the
currency
(b) The exchange rate' would indicate the strength of the economy
(c) It would discourage black market transactions
(d) The RBI will be a direct player now rather than being an indirect one
4. The States' debt does not include:
(a) loans from State Bank of India
(b) loans from the Central Government
(c) Provident Funds
(d) treasury bills issued to international financial institutions
5. Consider the following statement:
The price of any currency in international market is determined by the:
1. WTO
2. Demand for goods/services provided by the country concerned
3. Inflation differential between the country concerned and its major trading partners
4. Stability of the government of the concerned country
Of these statements:
(a) 1, 2, 3, and 4 are correct
(b) 1, 2 and 4 are correct
(c) 1, 3 and 4 are correct
(d) 2, 3 and 4 are correct
6. Hard Currency is defined as currency:
(a) which can hardly be used for international transactions
(b) which is used in times of war
(c) which loses its value very fast
(d) traded in foreign exchange market for which demand is persistently relative to the supply
7. The Indian Rupee is fully convertible:
1. In respect of Current Account of Balance of Payments
2. In respect of Capital Account of Balance of Payments
3. Into Gold
Which of these statements is/are correct ?
(a) 1 only
(b) 3 only
(c) 1 and 2 only
(d) 1, 2 and 3
8. Consider the following statements:
The price of any currency in international market is decided by the
1. World Bank
2. Demand for goods/services provided by the country concerned
3. stability of the government of the concerned country
4. economic potential of the country in question
Of these statements:
(a) 1, 2, 3 and 4 are correct
(b) 2 and 3 are correct
(c) 3 and 4 are correct
(d) 1 and 4 are correct
9. Inflation implies:
(a) rise in budget deficit
(b) rise in money supply
(c) rise in general price index
(d) rise in prices of consumer goods
10. The situation with increasing unemployment and inflation is termed as:
(a) hyperinflation
(b) galloping inflation
(c) stagflation
(d) reflation