Cash Reserve Ratio is the percentage of net demand and time liabilities that banks must: MCQ with Answer and Explanation

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Cash Reserve Ratio is the percentage of net demand and time liabilities that banks must:

A. invest in government securities

B. invest in gold

C. lend to the priority sector

D. keep as cash with the RBI

Answer: Option D

Solution (By JKSSB Mock Tests)

CRR requires banks to keep a prescribed percentage of NDTL as cash reserves with the RBI.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The 'income effect' of a price rise in a normal good leads to:

A. purchase of inferior goods only

B. decreased purchase of the good

C. increased purchase of the good

D. no change in purchase

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Correct Answer: Option B

Explanation:
A price rise reduces real income, so the income effect causes less purchase of a normal good.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Tribunals for other matters' are established under which article?

A. Article 324

B. Article 323B

C. Article 329

D. Article 323A

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Correct Answer: Option B

Explanation:
Tribunals for other matters are established under Article 323B.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following best describes 'Stagflation'?

A. Deflation with full employment

B. High growth with low inflation

C. High inflation accompanied by high unemployment and stagnant growth

D. Low inflation with high unemployment

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Correct Answer: Option C

Explanation:
Stagflation is a situation of simultaneous high inflation, high unemployment and stagnant or negative economic growth, posing a policy dilemma.

This question belongs to: Economy GK Economy Set 1

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