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Maharashtra SSC (Class 10) Unit 1A: Basic Economic Concepts and Production Systems — practice questions — page 2

Explore 33 free Unit 1A: Basic Economic Concepts and Production Systems questions in Maharashtra SSC (Class 10) Economics. Open each question or exercise to read its content, reference answers and available explanation.

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Unit 1A: Basic Economic Concepts and Production Systems questions and exercises with answers

Showing questions 31–33 of 33.

In the fictional balance sheet of the chapter, if CRR = 20% and initial reserves with the bank are Rs 100, the maximum deposits the system can support areRead the answer and worked solution →Which is a QUALITATIVE tool of monetary policy used by the RBI?Read the answer and worked solution →A bank's balance sheet identity isRead the answer and worked solution →

Worked practice questions

In the fictional balance sheet of the chapter, if CRR = 20% and initial reserves with the bank are Rs 100, the maximum deposits the system can support are

  1. Rs 500
  2. Rs 100
  3. Rs 200
  4. Rs 400
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Correct answer: A. Rs 500

Multiplier 1/0.20 = 5 100 × 5 = Rs 500. Loans expand to Rs 400 and deposits total Rs 500 at equilibrium.

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Which is a QUALITATIVE tool of monetary policy used by the RBI?

  1. Bank rate change
  2. Open market operations
  3. Cash reserve ratio change
  4. Moral suasion (persuading banks to alter lending behaviour)
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Correct answer: D. Moral suasion (persuading banks to alter lending behaviour)

**Quantitative tools:** CRR, SLR, bank rate, OMO, repo/reverse repo. **Qualitative tools:** moral suasion, margin requirements, selective credit control — they target the COMPOSITION of credit, not the total quantity.

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A bank's balance sheet identity is

  1. Net Worth = Assets + Liabilities
  2. Deposits + Loans = Reserves
  3. Assets = Liabilities + Net Worth
  4. Assets = Liabilities (always exactly)
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Correct answer: C. Assets = Liabilities + Net Worth

Standard accounting identity. **For a bank:** Reserves + Loans = Deposits + Net Worth. Net Worth absorbs any positive gap when assets exceed liabilities.

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