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IBPS RRB Officer Scale 2 Monetary Policy — practice questions

Explore 5 free Monetary Policy questions in IBPS RRB Officer Scale 2 Banking Awareness. Open each question or exercise to read its content, reference answers and available explanation.

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Monetary Policy questions and exercises with answers

Showing questions 1–5 of 5.

Quantitative tool or qualitative?Read the answer and worked solution →Match each policy tool to its jobRead the answer and worked solution →True or false: controlling money supplyRead the answer and worked solution →Fill in the two reserve ratiosRead the answer and worked solution →Which one is NOT what it claims?Read the answer and worked solution →

Worked practice questions

Quantitative tool or qualitative?

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Items
  1. Item
    Cash Reserve Ratio
    Category
    Quantitative
  2. Item
    Bank rate
    Category
    Quantitative
  3. Item
    Open market ops
    Category
    Quantitative
  4. Item
    Repo operations
    Category
    Quantitative
  5. Item
    Moral suasion
    Category
    Qualitative
  6. Item
    Margin requirement
    Category
    Qualitative
Categories
  1. Item
    Quantitative
  2. Item
    Qualitative
Instructions
Tap a tool, then tap the kind of instrument it is.
_Source: syllabus Macroeconomics XII Ch3 Money and Banking, 3.4 POLICY TOOLS TO CONTROL MONEY SUPPLY_

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Match each policy tool to its job

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Matching pairs
  1. Left
    CRR
    Right
    Share of deposits held as cash reserves
  2. Left
    SLR
    Right
    Reserves a bank must hold in liquid form
  3. Left
    Bank rate
    Right
    Rate at which RBI lends to commercial banks
  4. Left
    Repo rate
    Right
    Rate on lending against a resale agreement
  5. Left
    Reverse repo
    Right
    Rate at which RBI withdraws money
  6. Left
    Open market ops
    Right
    Buying and selling government bonds
Instructions
Tap a tool on the left, then tap what it does.
_Source: syllabus Macroeconomics XII Ch3 Money and Banking, 3.4 POLICY TOOLS TO CONTROL MONEY SUPPLY_

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True or false: controlling money supply

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Questions
  1. Statement is true
    Yes
    Statement
    When the RBI buys a government bond, the money supply increases.
  2. Statement is true
    No
    Statement
    Raising the bank rate increases the money supply.
  3. Statement is true
    Yes
    Statement
    Raising the reserve ratio reduces how much banks can lend.
  4. Statement is true
    No
    Statement
    Outright open market operations carry a promise to reverse the trade later.
  5. Statement is true
    Yes
    Statement
    The RBI is called the lender of last resort.
Instructions
Decide whether each statement about monetary policy is true or false.
_Source: syllabus Macroeconomics XII Ch3 Money and Banking, 3.4 POLICY TOOLS TO CONTROL MONEY SUPPLY_

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