Why Commercial banks are called creators of money?

Why Commercial banks are called creators of money?

[A] because they buy securities from the central government

[B] because the loans create deposits

[C] because they distribute the money in the system

[D] because they purchase investments

Correct Answer: B [because the loans create deposits]

INDIAN ECONOMY GK QUESTIONS AND ANSWERS

1.National Housing Bank is the wholly subsidiary of RBI. In which year, NHB was established?

2.For which of the following the term ” Paper Gold ” is used?

3.A new private bank is established under which of the following?

4.Which of the following organizations publishes and continually updates the model tax convention which serves as a template for bilateral negotiations regarding tax coordination and cooperation?

5.At which of the following places in India is a National Maritime Complex to showcase various facets of Indian Maritime Industry?

6.Which among the following helps to solve the balance of payments problem of member countries?

7.Global Trust Bank was acquired by which of the following banks in 2004?

8.Why Commercial banks are called creators of money?

9.Which among the following is used for a situation of “Too much money chasing too few goods?

10.To avoid a Prompt Coercive Action from the Reserve Bank of India, a bank should not fall in which of the following conditions?

MORE QUESTIONS ABOUT INDIAN ECONOMY

1.The base year for the calculation of all-India Index of Industrial Production (IIP) is:

2.Which of the following is not a correct statement with respect to Masala Bonds? 

3.Which among the following is an opposite activity of hedging in share / currency /future markets?

4.In which of the following countries first Stock Exchange opened?

5.Which among the following represents the accounting year of the Reserve Bank of India?

6.The portion of profits that a company distributes among its shareholders in the form of cash is usually known as _____?

7.Under which of the following laws, the Subsidiary Bank of the State Bank of India is constituted ?

8.IFSC is an alphanumeric code designed to uniquely identify the bank branches in India. This is an 11-digit code with the first four characters representing the bank’s code, the next character reserved as control character (currently, 0 appears in the fifth position) and remaining six characters to identify the branch. RBI has advised all banks to print IFSC on cheque leaves issued to customers. What is the full form for IFSC Code?

9.A monopolist will be able to maximize his profits when _________?

10.Which among the following banks was designated as the Agency for operationalisation of the Joint Investment Fund between India and Oman?

FOR MORE ECONOMY QUESTIONS AND ANSWER

1.Recently, the Cabinet has approved the merger of 5 associate banks of SBI with the parent bank SBI. What will be the approximate market share of the banking giant produced via this merger?

2.The rate at which RBI purchases or rediscounts bills of exchange of commercial banks is called?

3.Which among the following organizations calculate and publish LIBOR (London Interbank Offered Rate)?

4.Hang-Seng is the share market index at which of the following?

5.Rs. 100 notes are printed in which of the following?

6.The concept of weaker sections under ‘priority sector’ was introduced on the recommendation of which of the following committees?

7.When a person has a savings account in the bank , the bank assumes the position of ___?

8.An investor or speculator who subscribes to a new issue with the intention of selling them soon after allotment to realize a quick profit is called?

9. What does the FDI trigger list consist of _______?

10. Which of the following companies introduced for the first time Traveller Cheques in the form of ‘circular notes’? 

11.From the following, bring out the one which is not a liability of a commercial bank?

12.Who among the following are the beneficiaries of Ways and Means Advances (WMA) facility of Reserve Bank of India?

13.Hundies are normally __________?

14.A monopolist will be able to maximize his profits when _________?

15.What is the frequency of availability of Overall WPI Index?

16.What was the name of the world currency that John Maynard Keynes conceptualized in the years 1940-42 and proposed at the Bretton Woods Conference?

17.Consider the following: 

18. Which among the following correctly represents Total Food Grains?

19.Consider the following statements

20.How many states of India are covered under the National Horticulture Mission?

21.Real National income increases in which of the following circumstances?

22.Who is the author of “Volatility and Growth”?

23.In which type of economy, competition doesn’t exist in the market?

24.Which sector do the red collar workers belong to?

25.Which sector employs the maximum population in the country?

26.What was the Indian economy share in the world economy immediately after Independence?

27.Which of the following is a reason for India to be a developing country?

28.In which year, the Planning commission scrapped?

29.what does food security mean?

30.What is the percentage of gross cropped area of oilseeds in the country?

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