Exercise 3

Question 11 :

If the RBI adopts an expansionist open market operations policy, this means that it will

A). buy securities from non-government holders
B). sell securities in the open market
C). offer commercial banks more credit in the open market
D). openly announce to the market that it intends to expand credit
Answer : Option C

Question 12 :

Redistribution polices geared to reduce economic inequalities include

A). progressive tax policies
B). land reforms
C). rural development policies
D). All the above
Answer : Option D

Question 13 :

Short-term finance is usually for a period ranging up to

A). 5 months
B). 10 months
C). 12 months
D). 15 months
Answer : Option C

Question 14 :

In India, which one among the following formulates the fiscal policy?

A). Planning Commission
B). Ministry of Finance
C). Finance Commission
D). The Reserve Bank of India
Answer : Option B

Question 15 :

The budget deficit means

A). the excess of total expenditure, including loans, net of lending over revenue receipts
B). difference between revenue receipts and revenue expenditure
C). difference between all receipts and all the expenditure
D). fiscal deficit less interest payments
Answer : Option C