Class 11 Finance MCQ Chapter 4 Central Bank Solutions in English Medium to each chapter is provided in the list so that you can easily browse through different chapters Class 11 Finance MCQ Chapter 4 Central Bank Question Answer and select need one. Class 11 Finance MCQ Chapter 4 Central Bank Solutions Download PDF. AHSEC Class 11 Banking Multiple Choice Solutions.
Class 11 Finance MCQ Chapter 4 Central Bank
Also, you can read the NCERT book online in these sections Solutions by Expert Teachers as per Central Board of Secondary Education (CBSE) Book guidelines. AHSEC Class 11 Finance Objective Type Solutions are part of All Subject Solutions. Here we have given HS 1st Year Banking Multiple Choice Question and Answer, HS First Year Banking MCQ Solutions for All Chapters, You can practice these here.
Central Bank
Chapter: 4
| MCQ |
1. What is the primary role of the central bank in a country?
(i) To control foreign trade.
(ii) To provide loans to the public.
(iii) To manage the currency and monetary policy.
(iv) To set prices of goods and services.
Ans: (iii) To manage the currency and monetary policy.
2. Which of the following is the central bank of India?
(i) State Bank of India.
(ii) Reserve Bank of India.
(iii) Bank of India.
(iv) Punjab National Bank.
Ans: (ii) Reserve Bank of India.
3. Who described the central bank as a “bank of bankers”?
(i) Hawtrey.
(ii) P.A. Samuelson.
(iii) W.A. Shaw.
(iv) Adam Smith.
Ans: (ii) P.A. Samuelson.
4. The central bank of the United States is known as:
(i) Federal Bank.
(ii) Federal Reserve System.
(iii) Bank of America.
(iv) National Bank of America.
Ans: (ii) Federal Reserve System.
5. The central bank acts as a banker to which of the following?
(i) Commercial banks and the government.
(ii) Private companies only.
(iii) International banks only.
(iv) General public.
Ans: (i) Commercial banks and the government.
6. Which of the following is a primary objective of a central bank?
(i) Earning profit.
(ii) National welfare.
(iii) Providing personal loans.
(iv) Increasing exports.
Ans: (ii) National welfare.
7. The central bank has a direct relationship with which of the following?
(i) Commercial banks.
(ii) General public.
(iii) Private companies.
(iv) Non-banking financial companies.
Ans: (i) Commercial banks.
8. The central bank is considered the apex institution in which sector?
(i) Retail banking.
(ii) Insurance.
(iii) Real estate.
(iv) Banking and finance.
Ans: (iv) Banking and finance.
9. In India, which institution is responsible for issuing currency notes?
(i) State Bank of India.
(ii) Ministry of Finance.
(iii) Reserve Bank of India.
(iv) Nationalized banks.
Ans: (iii) Reserve Bank of India.
10. Which of the following is not an advantage of the central bank’s monopoly over note issuance?
(i) Uniformity in note issue.
(ii) Control over money supply.
(iii) Encourages commercial banks to print their own currency.
(iv) Increases public confidence in the monetary system.
Ans: (iii) Encourages commercial banks to print their own currency.
11. The central bank advises the government on which of the following matters?
(i) Education and healthcare.
(ii) Financial, monetary, and economic policies.
(iii) Social and cultural policies.
(iv) Tourism and environmental issues.
Ans: (ii) Financial, monetary, and economic policies
12. What advantage does the centralization of cash reserves provide?
(i) Encourages banks to create separate currency notes.
(ii) Increases public confidence in the banking system.
(iii) Reduces the need for commercial banks to hold reserves.
(iv) Decreases the central bank’s control over the banking structure.
Ans: (ii) Increases public confidence in the banking system
13. When the central bank acts as the “lender of last resort,” it provides financial assistance primarily by:
(i) Issuing currency to commercial banks.
(ii) Offering long-term loans to banks.
(iii) Rediscounting eligible securities and bills of exchange.
(iv) Collecting deposits from banks.
Ans: (iii) Rediscounting eligible securities and bills of exchange.
14. Acting as the lender of last resort allows the central bank to:
(i) Avoid involvement in the banking system.
(ii) Exert control over the country’s banking system.
(iii) Close down struggling commercial banks.
(iv) Reduce the liquidity in the credit structure.
Ans: (ii) Exert control over the country’s banking system.
15. The central bank controls credit to prevent:
(i) Increased cash reserves.
(ii) Economic fluctuations.
(iii) Higher interest rates.
(iv) Foreign currency shortages.
Ans: (ii) Economic fluctuations.
