The reverse repo in monetary policy means the RBI: MCQ with Answer and Explanation

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The reverse repo in monetary policy means the RBI:

A. reduces CRR

B. buys government bonds outright

C. lends funds to banks against securities

D. sells securities to banks with an agreement to repurchase them later, absorbing liquidity

Answer: Option D

Solution (By JKSSB Mock Tests)

In reverse repo, the RBI sells securities to banks with an agreement to repurchase later, absorbing liquidity.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'investment multiplier' is greater when the marginal propensity to consume is:

A. negative

B. higher

C. zero

D. lower

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Correct Answer: Option B

Explanation:
The multiplier is higher when MPC is higher because more of each income increase is spent.

This question belongs to: Economy GK Economy Set 1

Question #2

The Doha Development Round of WTO negotiations primarily focused on:

A. military alliances

B. intellectual property only

C. exchange rate management

D. concerns of developing countries

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Correct Answer: Option D

Explanation:
The Doha Round focused on development concerns of developing countries.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Goods and Services Tax' is applicable in:

A. only states

B. only union territories

C. all states and union territories

D. only special economic zones

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Correct Answer: Option C

Explanation:
GST applies throughout India including states and union territories.

This question belongs to: Economy GK Economy Set 1

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