The term 'Reverse Repo Rate' is used by the RBI to: MCQ with Answer and Explanation

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The term 'Reverse Repo Rate' is used by the RBI to:

A. Determine the fiscal deficit

B. Inject liquidity into the system

C. Absorb excess liquidity from the banking system

D. Fix the long-term interest rates only

Answer: Option C

Solution (By JKSSB Mock Tests)

Under the reverse repo window, the RBI absorbs excess liquidity from banks by borrowing funds from them at the reverse repo rate.

This question belongs to: Economy GK Economy Set 1

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Question #1

Which of the following is NOT a component of Current Account in the Balance of Payments?

A. Unilateral transfers

B. Trade in goods

C. Trade in services

D. Foreign direct investment

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Correct Answer: Option D

Explanation:
Foreign direct investment is a component of the Capital Account. Current Account includes merchandise trade, invisibles (services), and unilateral transfers.

This question belongs to: Economy GK Economy Set 1

Question #2

Moral suasion by the RBI refers to:

A. legal penalties on banks

B. buying securities from banks

C. raising reserve requirements

D. persuasion and advice to banks to follow monetary policy objectives

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Correct Answer: Option D

Explanation:
Moral suasion is a non-statutory instrument of persuasion by the RBI to influence bank behaviour.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'National Institution for Transforming India' was formed on:

A. 15 August 2014

B. 1 January 2015

C. 1 January 2014

D. 26 January 2015

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Correct Answer: Option B

Explanation:
NITI Aayog was established on 1 January 2015.

This question belongs to: Economy GK Economy Set 1

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