The Reserve Bank of India acts as lender of last resort by: MCQ with Answer and Explanation

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The Reserve Bank of India acts as lender of last resort by:

A. lending only to the central government

B. providing funds to banks when they cannot obtain funds from other sources

C. issuing currency against gold

D. giving loans to the public at low interest

Answer: Option B

Solution (By JKSSB Mock Tests)

The RBI as lender of last resort provides funds to banks facing liquidity crises when other sources are unavailable.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

In the context of labour markets, the 'Gig Economy' is characterised by:

A. Only public-sector jobs

B. Only permanent full-time employment

C. Only agricultural self-employment

D. Short-term, flexible jobs often mediated by digital platforms rather than traditional long-term employment contracts

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Correct Answer: Option D

Explanation:
The gig economy refers to labour markets characterised by short-term contracts or freelance work, frequently organised through online platforms that match workers with individual tasks or projects.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is a feature of the 'Specific Factors Model' of international trade?

A. There are no specific factors

B. Some factors are specific to particular industries while labour is mobile between industries

C. All factors are mobile between industries

D. Only capital is mobile internationally

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Correct Answer: Option B

Explanation:
In the specific-factors (Ricardo-Viner) model, each industry has a factor that is specific to it (immobile) while at least one factor (usually labour) is mobile between industries, generating clear distributional predictions of trade.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Cheque Truncation System' processes cheques by:

A. physically moving cheques to the paying bank

B. destroying all cheques

C. transmitting electronic image of the cheque

D. converting cheques into cash immediately

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Correct Answer: Option C

Explanation:
CTS processes cheques by transmitting electronic images rather than moving physical cheques.

This question belongs to: Economy GK Economy Set 1

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