1. In India, which among the following is/are a part of Legal Tender Money?
a) Both coins and currency notes
b) Both coins and bank drafts
c) Both currency notes and SDRs
d) Only currency notes issued by RBI
2. Any note, which is wholly or partially, obliterated, shrunk, washed, altered or indecipherable is a/an
a) mutilated note,
b) imperfect note,
c) soiled note,
d) mismatched note,
e) none of these
3. Currency notes issued by RBI are fully covered by:
a) Approved assets,
b) Gold
c) Foreign exchange
d) All of these
e) None of the above
4. When a currency is converted into any other currency without any limit and for any purpose, it is called as
a) Fully convertible;
b) partially convertible;
c) controlled convertible;
d) not at all convertible;
e) none of the above
5. What do you mean by money laundering?
a) Washing the currency notes in a good laundery;
b) converting money obtained through illegal sources in to legal money;
c) keeping the money in currency chests;
d) sending excess cash to the other branch;
e) none of the above
6. Deficit financing implies-
a) Printing new currency notes
b) Replacing new currency with worn out currency
c) Public revenue in excess of public expenditure
d) Public expenditure in excess of public revenue
e) None of these
7. Devaluation of a currency means
a) reduction in the value of a currency vis-a-vis major internationally traded currencies
b) permitting the currency to seek its worth in the international market
c) fixing the value of the currency in conjunction with the movement in the value of a basket of pre-determined currencies
d) fixing the value of currency in multilateral consultation with the IMF, the World Bank and major trading partners
e) None of these
8. The one-rupee note bears the signature of____________.
a) RBI Governor
b) Deputy Governor
c) Finance Secretary
d) Finance Minister
e) None of these
9. Which one of the following methods is currently used in India to issue note?
a) Fixed fiduciary System,
b) Maximum fiduciary system
c) proportional reserve system,
d) percentage Reserve system
e) Minimum Reserve system
10.Who is authorized to issue coins in India.
a) RBI,
b) Ministry of Finance,
c) SBI,
d) none of these
e) all of these
11.What is understood by Fiduciary Issue of currency?
a) The issue of currency notes without keeping gold or silver as deposit
b) The issue of currency notes keeping gold or silver as deposit
c) The issue of currency notes with partial gold or silver deposits
d) The issue of currency notes with comparative gold or silver deposits
e) None of these
12.If RBI wants to limit the capital outflows and control currency depreciation, which of the following would be the most viable action?
a) Increase interest rates
b) Decrease interest rates
c) Purchase government bonds
d) Decrease statutory liquidity ratio
e) None of these
13.Which of the following is the sale authority for issue of currency in India?
a) Government of India
b) Reserve Bank of India
c) Controller of Currency
d) All of the above
e) None of the above
14.When was the rupee first minted in India?
a) During the reign of Sher Shah
b) During the Governorship of Lord Bentick
c) After Independence
d) During the reign of Ashoka
e) None of these
15.Who had created the new Rupee symbol in the year 2010?
a) Udaya Kumar Dharmalingam
b) Raj Kumar Barot
c) S Raju
d) Subhash Bhushan
e) None of these
Answers:
Answer 1. Both coins and currency notes
Answer 2. imperfect note
Answer 3. Gold
Answer 4. Fully convertible
Answer 5. Converting money obtained through illegal sources in to legal money
Answer 6. Public expenditure in excess of public revenue
Answer 7. Reduction in the value of a currency vis-a-vis major internationally traded currencies
Answer 8. Finance Secretary
Answer 9. Minimum Reserve system
Answer 10. Ministry of Finance
Answer 11. The issue of currency notes without keeping gold or silver as deposit
Answer 12. Increase interest rates
Answer 13. Reserve Bank of India
Answer 14. During the reign of Sher Shah
Answer 15. Udaya Kumar Dharmalingam
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