A. Accepting public deposits
B. Granting loan and advances
C. Undertaking agency functions
D. Banker to the government
Related Mcqs:
- Suppose the State Bank purchases a Rs 1,000 government bond from you. If you deposit the entire Rs 1,000 in you bank what is the total potential change in the money supply as a result of the State Bank’s action if the your bank’s reserve ratio is 20 percent ?
A. Rs 4,000
B. Rs 5,000
C. Rs 1,000
D. Rs 0 - Central bank’s rate of lending to commercial banks is called ?
A. Interest rate
B. Discount rate
C. Money rate
D. Control rate - When a commercial bank creates credit its immediate effect is that it raises__________________?
A. The exchange rates
B. The interest rates
C. The money supplies
D. The real national income - Which function is performed by both commercial banks and central banks ?
A. Acting as bankers to the government
B. Advising the government on monetary policy
C. Dealing in foreign exchange
D. Fixing the main interest rate - Bank issued a document that authorizes the bearer to receive money from one of its foreign branches or from another bank abroad. What such document is called ?
A. letter of Credit
B. Letter of expression
C. Demand draft
D. Letter of intent - Suppose the central bank purchases a government bond from a person who deposits the entire amount received from the sale in her bank the money supply will ?
A. rise by an amount that depends on the bank’s reserve ratio
B. rise by less than the amount of the deposit
C. fall by exactly the amount of the deposit as long as the bank does not change its reserve ratio
D. fall by exactly the amount of the deposit as long as the bank does not change its reserve ratio
E. be unchanged - A checking deposit in a bank in considered _________ of that bank?
A. an asset
B. capital
C. net worth
D. a liability - For the Central bank to keep the interest rat unchanged as the government increase spending, the Central Bank must continue to ?
A. decrease the money supply
B. increase the money supply
C. increase the demand for money
D. decrease the demand for money - Suppose Imtiaz moves his Rs1,000 demand deposit from Bank A to Bank B. If both banks operate with a reserve ratio of 10 percent What is the potential change in money supply as a result of Gerard’s action ?
A. Rs 10,00
B. Rs 1,000
C. Rs 9,000
D. Rs 0 - If the Bank of England reduces the money supply to reduce inflation a floating exchange rate will aid the Bank of England in fighting inflation because ?
A. as the money supply is decreased the interest rate will increase and the price of UK exports will rise and the Price of UK imports will fall
B. as the money supply is decreased the interest rate will increase, and the price of UK exports will fall and the price of UK imports will rise
C. as the money supply is decreased the interest rate will increase and the price of UK exports and UK imports will fall.
D. as the money supply is decreased the interest rate will increase and the price of both UK exports and UK imports will rise
