Banking Awareness Quiz - 3
This quiz is to test your knowledge about the banking industry and its activities. Find out your score at the end of the quiz.
Questions and Answers
- 1.
Dual economy is mixture of ?
- A.
Industrial sector and manufacturing sector
- B.
Traditional agricultural sector and a modern industrial sector
- C.
State ownership of the means of production in cooperation of foreign organizations
- D.
Industrial sector and trading of goods obtained through imports
- E.
None of these
Correct Answer
B. Traditional agricultural sector and a modern industrial sectorExplanation
Dual economy refers to an economic system that consists of both a traditional agricultural sector and a modern industrial sector. This means that the economy has two distinct sectors operating simultaneously, with one sector being focused on traditional agricultural practices and the other sector being focused on modern industrial production. This combination allows for a diverse range of economic activities and can contribute to overall economic growth and development.Rate this question:
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- 2.
A bank normally does not have to deal with an issue related to—
- A.
Payments and settlement systems
- B.
Contractual rights of creditors
- C.
Intellectual property rights
- D.
Cases of insolvency
- E.
Coordination between regulators active in banking/financial sectors
Correct Answer
C. Intellectual property rightsExplanation
A bank normally does not have to deal with issues related to intellectual property rights. This is because banks primarily focus on financial transactions and services, such as loans, deposits, and investments. Intellectual property rights pertain to the legal protection of intangible assets, such as patents, copyrights, and trademarks. While banks may encounter intellectual property issues in relation to their own branding and trademarks, it is not a core concern for their day-to-day operations.Rate this question:
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- 3.
Which of the following is not a function of a bank ?
- A.
Providing project finance
- B.
Selling Mutual Funds
- C.
Deciding policy rates like CRR, Repo Rates/SLR etc
- D.
Settlement of payments on behalf of the customers
- E.
All of these are functions of a bank
Correct Answer
C. Deciding policy rates like CRR, Repo Rates/SLR etcExplanation
Deciding policy rates like CRR, Repo Rates/SLR etc is not a function of a bank. The functions of a bank include providing project finance, selling mutual funds, and settlement of payments on behalf of customers. Deciding policy rates like CRR, Repo Rates/SLR etc is typically the responsibility of the central bank or monetary authority of a country, not commercial banks.Rate this question:
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- 4.
As we all know, the limit of exemption on personal income tax has been raised. Whenever a relief in direct taxes is given, the underlying motive is always to make money available for which of the following purposes ? 1. Savings 2. Investment for High returns 3. Personal Consumption
- A.
Only 1
- B.
Only 2
- C.
Only 1 and 3
- D.
Only 1 and 2
- E.
All 1, 2, 3
Correct Answer
C. Only 1 and 3Explanation
Whenever a relief in direct taxes is given, the underlying motive is always to make money available for savings and personal consumption. By raising the limit of exemption on personal income tax, individuals have more disposable income which they can choose to save or spend on personal consumption. The purpose of this relief is not specifically to encourage investment for high returns, although individuals may choose to invest their savings for potential higher returns. Therefore, the correct answer is only 1 and 3.Rate this question:
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- 5.
The Reserve Bank of India (RBI) recently announced a hike in some policy rates and also indicated that there may be another change in near future. Which of the following is/are considered a policy rate(s) in the hands of the RBI? 1. Repo Rate 2. SLR 3. BPLR
- A.
Only 1
- B.
Only 2
- C.
Only 1 and 3
- D.
Only 1 and 2
- E.
All 1, 2, 3
Correct Answer
D. Only 1 and 2Explanation
The correct answer is "only 1 and 2". The repo rate and SLR (Statutory Liquidity Ratio) are both considered policy rates in the hands of the RBI. The repo rate is the rate at which the RBI lends money to commercial banks, while the SLR is the percentage of deposits that banks are required to maintain in the form of liquid assets. BPLR (Benchmark Prime Lending Rate) is not a policy rate, but rather a reference rate used by banks to determine their lending rates to customers.Rate this question:
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- 6.
Which of the following is not a bank or finance company ?
- A.
Barclays
- B.
BNP Paribas
- C.
Lufthansa
- D.
HSBC
- E.
All are banks/finance companies
Correct Answer
C. LufthansaExplanation
Lufthansa is not a bank or finance company. It is a German airline and the largest airline in Europe. While Barclays, BNP Paribas, and HSBC are all well-known banks and finance companies, Lufthansa operates in the aviation industry and does not offer banking or financial services.Rate this question:
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- 7.
‘Sensitive sector’ as defined by RBI include(s)—
- A.
Capital Market
- B.
Real Estate
- C.
Commodities
- D.
All the above
Correct Answer
D. All the aboveExplanation
The correct answer is "All the above." The RBI defines a "sensitive sector" to include capital market, real estate, and commodities. This means that these sectors are subject to additional regulations and oversight by the RBI due to their potential impact on the economy.Rate this question:
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- 8.
The index of measuring economic development is—
- A.
Increase in productive assets
- B.
National income
- C.
Per-capita income
- D.
Any of the above
Correct Answer
D. Any of the aboveExplanation
The index of measuring economic development can be any of the given options: increase in productive assets, national income, or per-capita income. This means that economic development can be measured by looking at the growth in productive assets, the overall national income of a country, or the per-capita income of its citizens. All three factors are important indicators of economic development and can be used to assess the progress and prosperity of a nation.Rate this question:
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- 9.
In common meaning, inflation is a condition in which—
- A.
Price of commodity increases
- B.
Value of money decreases
- C.
Price of commodity and value of money both increase
- D.
Price of commodity increases and value of money decreases
Correct Answer
D. Price of commodity increases and value of money decreasesExplanation
Inflation refers to a situation where the general price level of goods and services in an economy increases over a certain period of time. This means that the price of commodities increases, making them more expensive for consumers. Additionally, inflation also leads to a decrease in the value of money, as the purchasing power of the currency decreases. Therefore, the correct answer is that both the price of commodities increases and the value of money decreases during inflation.Rate this question:
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- 10.
Which is the main reason of demand pull inflation ?
- A.
Increase in money supply
- B.
Increase in commercial expenditure
- C.
Increase in foreign demand for goods
- D.
All of the above
Correct Answer
D. All of the aboveExplanation
Demand pull inflation occurs when there is an increase in overall demand for goods and services in an economy. This can be caused by multiple factors, including an increase in money supply, which leads to more spending power for consumers and businesses. Additionally, an increase in commercial expenditure, such as investment and advertising, can stimulate demand and contribute to inflation. Lastly, an increase in foreign demand for goods can also drive up prices domestically. Therefore, all of the given options can be considered as main reasons for demand pull inflation.Rate this question:
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