The Liquidity Adjustment Facility of the RBI includes: MCQ with Answer and Explanation

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The Liquidity Adjustment Facility of the RBI includes:

A. Bank rate and MSF

B. Repo and reverse repo

C. Currency printing and open market operations

D. CRR and SLR

Answer: Option B

Solution (By JKSSB Mock Tests)

The Liquidity Adjustment Facility comprises repo and reverse repo operations.

This question belongs to: Economy GK Economy Set 1

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Question #1

In the context of trade policy, the 'Optimal Tariff' argument suggests that:

A. Only small countries can benefit from tariffs

B. Tariffs are always welfare-reducing for the imposing country

C. Free trade is never optimal

D. A large country may improve its terms of trade by imposing a tariff, provided foreign retaliation is absent

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Correct Answer: Option D

Explanation:
A large country can improve its terms of trade by restricting imports, thereby extracting some monopoly or monopsony rent; the optimal tariff balances this gain against the efficiency loss.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'base year' for the current CPI-IW series is:

A. 2016

B. 2001

C. 2012

D. 2011-12

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Correct Answer: Option A

Explanation:
The current CPI-IW series has base year 2016.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Pradhan Mantri Fasal Bima Yojana' provides crop insurance at what premium rate for Kharif crops?

A. 2% of sum insured

B. 1.5% of sum insured

C. 5% of sum insured

D. 10% of sum insured

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Correct Answer: Option A

Explanation:
PMFBY premium for Kharif crops is 2% of sum insured, Rabi 1.5%, commercial/horticultural 5%.

This question belongs to: Economy GK Economy Set 1

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