Money and Banking MCQ Quiz - Objective Question with Answer for Money and Banking - Download Free PDF

The correct answer is Repo Rate.

Key Points

• Repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks in the event of any shortfall of funds.
• Repo rate is used by monetary authorities to control inflation.
• Current Repo Rate: 6.5% (June 2024 MPC))
• It is a rate on short-term, collateral-backed borrowing.

Additional Information

• Reverse Repo rate is the rate at which the Reserve Bank of India borrows funds from the commercial banks in the country.
• The bank rate is the rate of interest that is charged by a central bank while lending loans to a commercial bank.
• In the event of a fund deficiency, a bank can borrow money from the central bank of a country. 
• Cash reserve ratio or CRR is a part of the RBI's monetary policy, which helps eliminate liquidity risk and regulate the money supply in the economy.

The correct answer is Rs. 200.

Key Points

• Sanchi Stupa has been designed on the page side of Rs. 200 Indian bank notes.
• The Sanchi Stupa motif is a feature in the new Rs 200 note.
  • ​Sanchi is a Buddhist complex, famous for its Great Stupa, on a hilltop at Sanchi Town in Raisen District of the State of Madhya Pradesh.
  • The Great Stupa at Sanchi is one of the oldest stone structures in India and was originally commissioned by the emperor Ashoka in the 3rd century BCE.
  • Sanchi was also her birthplace as well as the venue of her and Ashoka's wedding.

Additional Information

• Rs 50 note is fluorescent blue in colour.
  • The note has geometric patterns on both sides and is comparatively smaller in size.
  • On the reverse Rs, 50 note has the ‘Hampi with Chariot’ motif at the back.
• Rs 500:
  • The new note has shades of green and is smaller in size as compared to the note of the previous series.
  • The figure on the note is written in Devnagri.
  • On the reverse side of Rs 500 note is the image of the historical Red Fort building.
• Rs 2,000:
  • ​The new Rs 2,000 note is pink in colour, is slightly bigger than Rs 500 note.
  • Both the Rs 500 and Rs 2,000 note has the Swachh Bharat logo on the note.
  • The Reverse side of Rs 2000 note has an image of Mangalyaan representing India's first interplanetary space mission.

The correct answer is Custom Duty.

Key Points

• Custom Duty tax is not included in Goods and Services Tax (GST).
• Customs duty refers to the tax imposed on goods when they are transported across international borders.
  • In simple terms, it is the tax that is levied on the import and export of goods.
• The government uses this duty to raise its revenues, safeguard domestic industries, and regulate the movement of goods.
  • Customs duty is a form of indirect tax which is imposed at the time of both import and export of goods and services.
  • The tax which is imposed on the import of goods and services are is known as Import duty and for export of goods and services are known as Export duty.
• Hence, option 2 is correct. 

Additional Information

• Goods and services are divided into five different tax slabs for collection of tax - 0%, 5%, 12%, 18% and 28%.
  • However, petroleum products, alcoholic drinks, and electricity are not taxed under GST and instead are taxed separately by the individual state governments, as per the previous tax system. 
• Excise Duty :
  • Excise duty is a form of tax imposed on goods for their production, licensing and sale.
  • Today, excise duty applies only to petroleum and liquor.
  • Excise duty was levied on manufactured goods and levied at the time of removal of goods, while GST is levied on the supply of goods and services.
• Value Added Tax :
  • Value-added tax (VAT) is a type of indirect tax levied on goods and services for value-added at every point of production or distribution cycle, starting from raw materials and going all the way to the final retail purchase.
  • Because the consumer bears the entire tax, VAT is also a consumption tax.
• Service Tax :
  • Service tax is a tax levied by the government on service providers on certain service transactions but is actually borne by the customers.
  • It is categorized under Indirect Tax and came into existence under the Finance Act, 1994.
  • This tax is not applicable in the state of Jammu & Kashmir.

The correct answer is has no intrinsic value.

 Key Points

• Fiat money is a government-issued currency that is not backed by a commodity such as gold.
• Fiat money gives central banks greater control over the economy because they can control how much money is printed.
• Most modern paper currencies, such as the U.S. dollar, the British Pound, the euro, the Indian Rupee etc., are fiat currencies.
• One danger of fiat money is that governments can print too much of it, resulting in hyperinflation. 

The correct answer is Consumer price index.

Key Points

• Many developing countries use changes in the consumer price index (CPI) as their central measure of inflation.
• In India, CPI (combined) is declared as the new standard for measuring inflation (April 2014).
• CPI numbers are typically measured monthly, and with a significant lag, making them unsuitable for policy use.
• Inflation is the measured surge in the average prices of goods and services over a longer period in the economy.
• It is a macro term in which the impact of inflation on a large basket of goods is seen.
• As the value of money is decreased, the cumulative impact of inflation is reported as the buying power of money is reduced.

Important Points

• A wholesale price index (WPI) is an index that measures and monitors changes in the price of goods at stages prior to the retail level. This applies to goods sold in bulk and exchanged between companies or companies (instead of between consumers).
• The Consumer Price Index (CPI) is a metric examining the weighted average of consumer goods and services basket prices such as transport, food and medical care.

The correct answer is Custom duties.

Important Points

• The tax imposed on the import and export of commodities is called Custom duties.
• This is a form of foreign trade control and a policy that taxes foreign goods to encourage or protect domestic industry.
• Tariffs may be set (a constant sum per unit of imported goods or a percentage of the price) or variable (the amount varies by price). Import taxation means that consumers are less likely to purchase them because they are more costly.
• An excise tax is an indirect tax on the sale of a particular good or service charged by the Government.
• A VAT (Value-added tax) is a consumption tax that is imposed on a product whenever a value is added at each stage of the supply chain, from production to point of sale.
• Goods and Services Tax(GST) is an Indirect tax on the purchase of goods and services used in India.

The correct answer is Ellora Caves.

Key Points

• In April 2019, RBI issued new Rs. 20 currency notes in the Mahatma Gandhi (New) series. 
• The new Rs 20 notes have the signature of the Reserve Bank's Governor.
• The base colour of the new note is Greenish Yellow.
• The new (Rs 20) denomination has the motif of Ellora Caves on the reverse side of the note.
• The dimension of the banknote will be 63 mm x 129 mm.

Additional Information

The correct answer is Sanchi Stupa.

Key Points 

• Rs 200 note
  • The motif of the new denomination Rs. 200 is Sanchi Stupa on the reverse and its colour is Bright Yellow.
  • The dimension of the banknote is 66 mm*146 mm.
  • It is released on 25 August 2017.
  • The obverse design is of Mahatma Gandhi.
• The Reserve Bank of India has the sole authority to issue banknotes in India except for the one-rupee note which is released by the Ministry of Finance.
• The Government of India is the issuing authority of coins and supplies coins to the Reserve Bank on demand.
• Along with new 200 Rs. note Rs. 2000, 500, 200, 100, 50, 20,10 banknotes were also released.

Additional Information 

The correct answer is fluorescent blue. Key Points

• The Rs. 50 banknote of the Mahatma Gandhi (New) series has a base color of fluorescent blue.
• It is part of the new series of Indian currency notes introduced by the Reserve Bank of India (RBI).
• The color fluorescent blue is chosen to enhance the security features of the banknote and make it more difficult to counterfeit.
• The reverse of the new 50 rupee banknote in the Mahatma Gandhi (New) series has a motif of the Hampi with Chariot.
• Hampi is an ancient city located in the state of Karnataka, India. It is a UNESCO World Heritage Site and was once the capital of the Vijayanagara Empire.

Important PointsOther notes of Indian Currency-

The correct answer is FII.

Key Points

• Foreign Institutional Investor (FII) is known as Hot money.
• FII is an investor or investment body that is present outside the country.
• Hot Money refers to funds that are controlled by investors who actively seek short-term returns.

Additional Information 

• Foreign direct investment (FDI): 
  • FDI is an investment in the form of controlling ownership in a business in one country by an entity based in another country. 
• ​American Depositary Receipts (ADR): 
  • ADRs are a type of stock that allows US people to invest in non-US corporations and receive dividends in US dollars.
• Global Depositary Receipts (GDR): 
  • GDRs are like ADRs except for the fact that it is listed on an exchange outside the United States and help the issuer raise funds simultaneously in different markets like Luxembourg or London.

• The question asks about Language Panel and NOT the whole note.

Key Points

• Contemporary Currency notes have 15 languages on the panel which appears on the reverse of the note.
• Source - https://www.rbi.org.in/scripts/ic_languagepanel.aspx
• Languages included on the panel are Assamese, Bengali, Gujarati, Kannada, Kashmiri, Konkani, Malayalam, Marathi, Nepali, Odia, Punjabi, Sanskrit, Tamil, Telugu, and Urdu.
• The Reserve Bank has the sole authority to issue banknotes in India.
• Reserve Bank, like other central banks the world over, changes the design of banknotes from time to time.
• The Reserve Bank has introduced banknotes in the Mahatma Gandhi Series since 1996 and has so far issued notes in the denominations of Rs.5, Rs.10, Rs.20, Rs.50, Rs.100, Rs.500 and Rs.2000 in this series.
• Source - Here

The correct answer is disguised unemployment.

Important Points

• The type of unemployment in the agricultural sector of India where more people are employed than required is known as disguised unemployment.
  • It is a common form of unemployment in rural areas.
  • Disguised unemployment will occur when more people are engaged in a job than required.
  • A study conducted in the late 1950s reported that one-third of agriculture workers in India as disguisedly unemployed
• Unemployment is the situation where a person is searching for a job but not able to get one.

Additional Information

• Seasonal unemployment is the unemployment that occurs during a certain season of the year.
  • Unemployment of the farmers during non-crop season is an example of seasonal unemployment.
• Structural unemployment is unemployment that arises due to the change in the structure of the economy.

The correct answer is Mangalayan.

Key Points

• India witnessed the second major monetary reform in November 2016 when it withdrew the legal tender status of ₹ 500 and ₹ 1,000 denominations of banknotes of the Mahatma Gandhi Series.
• It was issued by the Reserve Bank of India on November 8, 2016.
• The new banknotes were introduced in the Mahatma Gandhi (New) Series, highlighting the cultural heritage and scientific achievements of the country.
• Distinct colours were used for the different denominations and size was reduced.
• Two new denominations viz. ₹ 2000 on November 08, 2016, and ₹ 200 on August 23, 2017, were introduced in the Mahatma Gandhi (New) Series.
• Rupees Two Thousand Size: 66 x 166 mm
• Motifs: Mangalayam

Additional Information

The correct answer is Union Budget 2021-22.

Key Points

• On 1 February 2021, Finance Minister Nirmala Sitharaman presented the first paperless budget. This was done due to the ongoing COVID-19 pandemic in India.
• The Union Budget 2021 was presented in a digital format for the first time to promote the Government of India's (GoI) Digital India flagship programme.

Additional Information

• The Union Budget of India also referred to as the Annual Financial Statement in Article 112 of the Constitution of India, is the annual budget of the Republic of India.
• The Government presents it on the first day of February so that it could be materialized before the beginning of the new financial year in April.
• Until 2016 it was presented on the last working day of February by the Finance Minister in Parliament.
• The budget division of the department of economic affairs (DEA) in the finance ministry is the nodal body responsible for producing the budget.
• It is presented by means of the Finance Bill and the Appropriation bill has to be passed by Lok Sabha before it can come into effect on 1 April, the start of India's financial year.
• Since 1947, there have been a total of 73 annual budgets, 14 interim budgets, and four special budgets, or mini-budgets.

The correct answer is 30.

Key Points

• SENSEX(SENSitve indEX) is a free-float market-weighted stock market index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange.
• It was introduced by the Bombay stock exchange on 1 January 1986.
• The index is widely reported in both domestic and international markets through print as well as electronic media.
• The index was initially calculated based on the "Full Market Capitalization" methodology but was shifted to the free-float methodology with effect from September 1, 2003.
• The SENSEX is the benchmark index with wide acceptance among individual investors, institutional investors, foreign investors and fund managers.
• The objectives of S&P BSE SENSEX-
  • To measure Market Movements
  • Benchmark for Funds Performance
  • For Index Based Derivatives Products
• Blue Chip companies refer to equity shares of companies with larger market capitalisation. These companies have entrenched market operations running for many years.