The Quiz given below consists of questions on the Monetary Policy or The Credit Policy of India. The quiz would be extremely helpful to the candidates preparing for various Competitive Exams like SSC, Bank PO, UPSC r any state level competitive exams or any school, collage or any bank’s promotion exam.
The monetary policy of the credit policy of India is the policy that aims to maintain price stability and also stabilize the exchange rate creating a healthy balance of payment, financial stability, and economic growth in the country. Take a look below and test your knowledge of the subject.
Lets Start the Quiz.
01) Which of the following are the indicators of the Monetary Policy?
A) Inflation
B) GDP
C) MSF Rate
D) All of the above
Correct answer is option “D”.
02) Who is empowered to control the expansion of bank credit?
A) Reserve Bank of India
B) Prime Minister of India
C) President Of India
D) Finance Minister of India
Correct answer is option “A”.
03) Who is the Central monetary policy Authority in India?
A) Finance Ministry
B) The Parliament
C) Prime Minister’s office
D) RBI
Correct answer is option “D”.
04) As on 2025 Who is the Governor of RBI?
A) Dr Shashanka Bhide
B) Shashikanta Das
C) Sanjay Malhotra
D) Ashima Goyal
Correct answer is option “C”.
05) What do you understand by monetary policy?
A) The process by which the Parliament controls the money supply
B) The process by which the central bank or monetary authority of a country controls the supply of money
C) The process by which International Market controls the money supply
D) All the above
Correct answer is option “B”.
06) How much is the CPI inflation projection indicated by RBI for 2024-25?
A) 2.2%
B) 4.8%
C) 5.3%
D) 6.6%
Correct answer is option “B”.
07) The RBi governor Mr. Sanjay Malhotra said in his first Monetary Policy Committee meeting that the CPI inflation foe 2024-25 is projected with Q4 at _____%.
A) 3.4
B) 4.4
C) 5.4
D) 6.4
Correct answer is option “B”.
08) What is the meaning of real interest rate?
A) Real interest rate is the lending interest rate
B) It is adjusted for inflation as measured by the GDP deflator.
C) Only option A
D) Only option B
E) Option A & B both
Correct answer is option “E”.
09) What is meant by nominal interest rate?
A) The nominal interest rate, also known as an annual percentage rate or APR (Annual percentage rate),
B) The nominal interest rate is the periodic interest rate multiplied by the number of periods per year.
C) Only option A
D) Only option B
E) Option A & B both
Correct answer is option “E”.
10) What is the difference between real interest rate and nominal rate?
i) Real interest rates take into account inflation
ii) Nominal rates are those which apply only to borrowers and not lenders
A) Only i
B) Only ii
C) Both i and ii
D) None of the above
Correct answer is option “A”.
11) What do You meant by Quantitative easing?
A) Quantitative easing is a monetary policy action
B) Where the central bank purchases predetermined amounts of government bonds
C) Purchase other financial assets in order to stimulate economic activity.
D) All the above
Correct answer is option “D”.
12) Quantitative easing is the common name for which of the option given below?
A) Asset selling by a central bank
B) Asset purchasing by a central bank
C) Lowering of the interest rate for commercial bank lending
D) When a central bank reduces rates
Correct answer is option “B”.
13) What is meant by Repo Rate?
1) Rate at which RBI lends commercial banks in place of Govt securities
2) Rate at which Commercial Banks lend the clients
A) Only 1
B) Only 2
C) Both 1 and i2
D) None of the above
Correct answer is option “A”.
14) An increase in Repo Rate can_____.
1) Decrease the cost of lending to the banks
2) Increase the cost of borrowing and lending of the banks
A) Only 1
B) Only 2
C) Both 1 and 2
D) None of the above
Correct answer is option “B”.
15) What do you meant by CRR?
1) It is a deposit made by banks with RBI in form of reserve or balances
2) It is a percentage of bank deposits that they keep with the RBI as Gold deposits only
A) Only 1
B) Only 2
C) Both 1 and 2
D) None of the above
Correct answer is option “A”.
16) Which of the following statements is true in concern of SLR?
A) It is to be maintained by all Financial Institutions
B) It is to be maintained as liquid assets
C) These need to be kept in non-cash form
D) All of the above
Correct answer is option “D”.
17) Credit operations of banking system are generally guided by whom of the below?
A) Directives of RBI
B) Instructions of Govt.
C) Banks’ own wisdom
D) Suggestions by world bank
E) A,B & C above
F) any of the above
Correct answer is option “E”.
18) RBI translates its views on economy into affirmative actions through changes in which of the following?
A) Credit policy
B) Monetary policy
C) Selective credit control
D) Monetary and Credit policy
Correct answer is option “D”.
19) Generally RBI reviews the policy_______ in a year.
A) Once
B) Twice
C) Thrice
D) Any number of time
Correct answer is option “B”.
20) The reviews are generally carried in the month of__________.
A) January and December
B) June and November
C) April and October
D) March and September
Correct answer is option “C”.
21) The review carried during April is called__________.
A) Mid term review of monetary & credit policy
B) Slack season review of monetary & credit policy
C) Busy season monetary & credit policy
D) Credit policy review
Correct answer is option “B”.
22) The review carried during October is called_________.
A) Mid term review of monetary & credit policy
B) Slack season review of monetary & credit policy
C) Busy season monetary & credit policy
D) Credit policy review
Correct answer is option “C”.
23) When RBI attempts to lower the cost of funds to improve growth, such policy is called__________.
A) Expansionary policy
B) Contractionary policy
C) Inflationary policy
D) Tight policy
Correct answer is option “A”.
24) When RBI tightens the monetary aggregates (such as CRR/SLR) and takes measures to increase interest rates, such policy is called___________.
A) Expansionary policy
B) Contractionary policy
C) Liberal policy
D) Non-inflationary policy
Correct answer is option “B”.
25) Which are two critical variables which go into monetary planning by RBI?
A) Price and supply
B) Demand and interest rates
C) Growth and interest rates
D) Growth and inflation
Correct answer is option “D”.
26) For formulation of monetary policy generally what determined first ?
A) Level of inflation
B) Credit requirements
C) GDP growth
D) Deposit accretion
Correct answer is option “C”.
27) After GDP growth determination, RBI takes into account _________based on the level of inflation.
A) Money demand
B) Credit demand
C) Govt. borrowing programme
D) Money supply expansion
Correct answer is option “D”.
28) What are the monetary objectives of the Monetary & Credit policy?
A) Assess the credit needs
B) Achieve price stability
C) Control the supply of money
D) B & C above
Correct answer is option “D”.
29) What are the credit objectives of the Monetary policy?
A) Ensure adequate supply of credit
B) assess the credit needs
C) Formulate credit schemes
D) Keep interest rates under control
Correct answer is option “A”.
30) Among the following, which major measures are taken by RBI under the policy?
A) Fix the deposit rates for various maturities
B) Change in CRR or SLR
C) Specify the primary lending rates of banks
D) Announce NRE deposit rates
Correct answer is option “B”.
31) In addition to the above which are other major measures taken by RBI under the policy?
A) Bank lending rates
B) Loan delivery system guidelines
C) Restriction on import credit
D) Bank rate modification
Correct answer is option “D”.
32) After GDP growth determination, RBI takes into account _________based on the level of inflation.
A) Money demand
B) Credit demand
C) Borrowing of the govt programme
D) Money supply expansion
Correct answer is option “D”.
33) What is meant by the term ‘stance of the credit policy’ ?
A) Objective to be achieved
B) The basic emphasis
C) Identification of key drivers to implement the policy targets
D) None of the above
Correct answer is option “C”.
34) What objective is achieved by price stability through controlled inflation?
A) Retention of confidence of citizens in the economy
B) Inducement to business sector to plan their future activity
C) Money supply growth rate
D) A & B above
Correct answer is option “D”.
35) The monetary objective of credit policy achieved through________.
A) Control of CRR
B) Control of SLR
C) Control of M3 growth
D) Control of Bank rate
The correct answer is option “C”.
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