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. lends funds to banks against securities

B. reduces CRR

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

D. buys government bonds outright

Answer: Option C

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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Practice More Economy Set 1 Questions

Question #1

The 'Agreement on Agriculture' under WTO covers:

A. industrial subsidies

B. domestic support, market access and export subsidies in agriculture

C. intellectual property

D. banking regulation

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Correct Answer: Option B

Explanation:
The WTO Agreement on Agriculture covers domestic support, market access and export subsidies.

This question belongs to: Economy GK Economy Set 1

Question #2

In an open economy, aggregate demand is given by:

A. C + I + G + (X - M)

B. C + I - G

C. C + S + T

D. I + G + M

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Correct Answer: Option A

Explanation:
In an open economy, aggregate demand is C + I + G + (X - M).

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a characteristic of the 'Splinternet' or 'Digital Fragmentation' concern?

A. Only the growth of a single global platform

B. The absence of any regulatory differences

C. The complete global harmonisation of all digital rules

D. The risk that the global internet may fragment into separate national or regional networks with incompatible rules and standards

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Correct Answer: Option D

Explanation:
Digital fragmentation (or the 'splinternet') refers to the potential balkanisation of the internet into distinct spheres governed by divergent national regulations, technical standards and platform ecosystems.

This question belongs to: Economy GK Economy Set 1

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