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1. Statements: Under the reverse repo rate the commercial banks gives loans to the Reserve Bank of India for short period of time for which the commercial banks gets interest from the RBI, on the other hand the commercial banks has the option to give the money as loan to the people through which they can earn more money but still the commercial bank prefer giving the loan to the RBI and not the people. So, what could be the main reason behind this ?
I) The commercial banks of India follow the concept of the universal banking.
II) The people can be defaulter and giving the money to the people can be a risk of increasing NPA.
III) Giving money to RBI is a more safer option.
IV) The monetary policy of India says that the Commercial Banks of India has to give some part of their total money to the RBI as the loan.
1) Only I
2) Only I and II
3) Only II
4) Only III
5) All I, II, III and IV
2. Statements: India during the month of July to September in the reason of Monsoon receives the heavy rainfall but the Western part of Rajasthan i.e. Thar Desert receives very less amount of rainfall or we can say it receives almost no rainfall. so what could be the main reason that Thar Desert receiving such low rainfall ?
I) The South western monsoon which comes from the Arabian sea side when reaches Rajasthan moves parallel to the Aravallis.
II) The South Western monsoon which comes from the Bay of Bengal side when reaches the Thar Desert, it is out of moisture.
III) The Thar Desert lies in the high pressure zone due to which very fast winds blow away the clouds.
IV) The monsoon winds on India don't move towards the Thar Desert in Rajasthan.
1) Only I 2) Only II 3) Only III 4) Only I and II 5) Only I, II and III
3. Statements: In the recent past we have seen that the demand of gold in the Indian market is continuously increasing and the people are purchasing huge amount of gold but on the other hand the government of India is continuously asking the people of India not to buy the gold as it is hampering the economic growth of the country. What could be the negative effect of the rising demand of gold on the economy of the country.
I) People in the India has to pay in rupees for the gold where as the country needs to pay in dollars in international market for the gold due to which the foreign reserve of India is continuously decreasing.
II) The country is paying more for the imports.
III) The demand of dollar is increasing in the international market due to which the value of Indian rupee is devaluating.
IV) Increasing demand of gold is promoting black marketing in India.
1) Only I and II
2) Only IV
3) Only III and IV
4) Only II,III and IV
5) Only I, II and III
4. Statements: Base rate is the minimum rate of interest at which the commercial banks gives loans to its any customer whether prime or ordinary customer. The base rate is decided by the individual banks but the RBI has made it mandatory for the banks to put the Base rate on the notice board of the banks. What could be the main reason behind the action taken by the RBI.
1) The RBI wants to make the market transparent.
2) The RBI wants to show its monopoly to other banks.
3) The RBI wants to reduce the bargaining in the commercial banks.
4) The RBI wants to divide the customers to other banks also.
5) None of these
5. Statements: Crime today is getting more diabolic than ever, especially the one perpetrated against women. The agony of the brutal gang rape and subsequent death of the paramedical student in New Delhi still haunts our collective conscience, while the country continues to reel under sexual assaults every day. What course of Action government should take to reduce the sexual crime against the women in India?
1) The government should increase more female police force in the country.
2) The government should make a special women complaint cell where the women are more comfortable to come.
3) The government should work on making more strict laws and subsequently work on speedy trials against female related crimes.
4) The government should work on providing self defense training to the women's in India.
5) All of these
Directions (Q. 6–7): Study the following passage carefully and answer the questions.
Rising prices of commodities have became a source of great concern to the Indian economists at present time. It has caused great hardship to all sections of our society, particularly fixed income groups, like salaried persons, wage earners and pensioners, have been feeling the maximum pinch. They have no means to supplement their income and no savings to fall back upon the economic uncertainty of their future. This also breeds social unrest and causes tension and conflict between the have and the have-nots. There are other adverse effects of price rise too. Inflation induces businessmen to invest their money in non-productive assests like gold and land. Their real worth is not affected by rising prices. High prices also adversely affect the exports of the country and distort the balance of foreign trade.
6. What should be the course of action to check rising prices?
1) Accelerating production
2) Checking investment in non-productive assets
3) Control on inflation and keep eye on erring businessmen
4) Effective distribution system 5) Social awareness
7. What is the effect of inflation in the context of the passage?
1) It increases competition.
2) It increases foreign trade.
3) It increases agriculture and industrial production.
4) Not mentioned in the passage
5) None of these
Directions (Q. 8–10): Study the following information carefully and answer the given questions.
The central bank is schedued to announce its first midquarter review of monetary policy for 2012-13. The Reserve Bank of India (RBI) has cut the rates for the first time in three years. In its annual credit policy, RBI has slashed short-term lending rate or repo rate by 0.50 bps. The RBI has hinted at a cut in interest rates. Moderation in inflation due to lower economic growth and cooling global oil prices provides room for easing monetary policy.
(A) It may be good news for all depositors who are planning to make investments.
(B) It’s beneficial for all home loan, auto loan, personal loan borrowers because of low interest rate.
(C) The sagging economy has prompted concern about balance of payments of the country.
(D) The cut in the policy in repo rate is an indication of decelerating GDP of the country.
8. Which of the following statements (A), (B), (C) and (D) is definitely false in the context of the passage?
1) Only (B)
1) Only (B)
2) Only (D)
3) Only (A)
4) Only (C)
5) Both (C) and (D)
9. Which of the following statements (A), (B), (C) and (D) is definitely the cause of cut in key rates of RBI?
1) Only (D)
1) Only (D)
2) Only (C)
3) Only (A)
4) Both (C) and (D)
5) Both (A) and (C)
10. Which of the following statements (A), (B), (C) and (D) is definitely an effect according to the passage?
1) Only (A)
1) Only (A)
2) Only (B)
3) Only (C)
4) Only (D)
5) None of these
- 3; The banks in India follow the concept of Narrow banking and since the customers are defaulters, the banks prefer giving the money to the RBI and earn little interest so that there NPA (Non Performing Assets) are not increased.
- 4; The South West monsoon in India comes in two branches the Arabian Sea branch and Bay of Bengal branch, the Arabian Sea branch strikes the Aravallis and due to the height of the mountains they are unable to cross the mountains and the Thar desert lies on the leeward side. The Bay of Bengal after striking with the Himalayas moves towards the northern part of India but till the time it reaches the Thar desert, it is out of moisture.
- 5; The huge demand of gold is forcing India to buy more gold from the international market for which they are paying dollars which is reducing the foreign reserves of India and promoting the imports due to which the demand of dollar increases in the international market leading to the devaluation of the Indian rupee.
- 1; Before the advent of Base Rate the banks were giving loans to the customers at the rate of interest they desire. So, in order to make the market more transparent the RBI introduced the Base Rate.
- 3; Lack of strict laws and speedy trails in India is the only main reason behind the increasing of female crimes in India because the criminals are aware of the flexible judicial system of India and also the slow process of Judiciary.