Statutory Liquidity Ratio is the percentage of NDTL that banks must maintain in: MCQ with Answer and Explanation

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Statutory Liquidity Ratio is the percentage of NDTL that banks must maintain in:

A. cash with RBI only

B. gold, cash and approved securities

C. loans to government

D. foreign exchange only

Answer: Option B

Solution (By JKSSB Mock Tests)

SLR requires banks to maintain liquid assets such as cash, gold and approved securities.

This question belongs to: Economy GK Economy Set 1

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Question #1

Which of the following is a characteristic of the 'Classical Dichotomy'?

A. Real and nominal variables are always interdependent

B. Real and nominal variables are determined separately and money is neutral

C. Only fiscal policy is neutral

D. Money affects real output in the long run

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Correct Answer: Option B

Explanation:
The classical dichotomy is the proposition that real variables (output, employment, relative prices) are determined independently of nominal variables and that money is neutral in the long run.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is a characteristic of the 'Vertical Equity' principle in taxation?

A. Taxes should be independent of income

B. All taxpayers should pay the same absolute amount

C. Taxpayers with greater ability to pay should bear a larger tax burden

D. Only equal absolute burdens are fair

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Correct Answer: Option C

Explanation:
Vertical equity requires that taxpayers with greater ability to pay contribute more in taxes, which is the ethical foundation for progressive taxation.

This question belongs to: Economy GK Economy Set 1

Question #3

The concept of 'Social Opportunity Cost' is particularly relevant in the evaluation of:

A. International trade only

B. Private investment projects only

C. Public investment projects

D. Monetary policy only

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Correct Answer: Option C

Explanation:
Social opportunity cost considers the true cost to society of using resources in a particular project and is especially important in the appraisal of public investment projects.

This question belongs to: Economy GK Economy Set 1

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