B.Com In Banking & Insurance (BCBI) Sem VI March 2025 March 2025 Central Banking Question Paper - Mumbai University | munotes

Questions asked in this paper

• 2) Figures to the right indicate full marks

1. Q1 Which institution is responsible for the regulation of money supply in India?
   • a) Ministry of Finance
   • b) Reserve Bank of India (RBI)
   • c) Securities and Exchange Board of India (SEBI)
   • d) Government of India
2. Q2 A decrease in the cash reserve ratio (CRR) would likely result in:
   • a) A decrease in the money supply
   • b) An increase in the money supply
   • c) A decrease in inflation
   • d) A decrease in interest rates
3. Q3 Which of the following is NOT a form of public debt?
   • a) Treasury Bills
   • b) Bonds
   • d) Government securities
4. Q4 Which of the following describes the role of the secondary market?
   • a) It involves the initial sale of securities to the public
   • b) It allows for the buying and selling of existing securities
   • c) It deals with government bonds exclusively
   • d) It involves government bills only
5. Q5 Which of the following is a characteristic of a 'fixed exchange rate' system?
   • a) The currency value is determined by market forces
   • b) The central bank adjusts the currency value based on economic performance
   • c) The currency's value is pegged to another currency or a basket of currencies
   • d) The currency fluctuates based on inflation rates
6. Q6 Which of the following is a tool used by central banks to control money supply?
   • b) Capital controls
7. Q7 Which of the following is an example of a fiscal policy tool?
   • a) Adjusting the bank's reserve requirements
   • b) Changing the money supply
   • c) Taxation and government spending
8. Q8 Which of the following is a consequence of deficit financing?
   • a) Increase in government debt
   • b) Decrease in inflation
   • c) Reduction in the money supply
   • d) Improvement in fiscal balance
9. Q9 What is the primary responsibility of the Federal Reserve in the United States?
   • a) To set foreign trade policies
   • b) To regulate and supervise national elections
   • c) To control the money supply and regulate the banking system
   • d) To collect taxes for the federal government
   • (1) (B) State whether the following statements are true or false (Any Seven) 7
10. Q2 Open Market Operations (OMO) involve the buying and selling of government securities by the RBI to regulate liquidity
11. Q3 The primary goal of monetary policy is to control the money supply and maintain
12. Q4 Price stability and economic growth are conflicting in nature
13. Q5 During inflation RBI adopts cheap money policy to control the supply of credit
14. Q6 The Reserve Bank of India (RBI) was established in 1947
15. Q7 Repo Rate applies to lending, while Reverse Repo Rate applies to borrowing by the
16. Q8 There are 3 deputy governors in the RBI
17. Q9 Credit rationing is a quantitative credit control measure of Central Bank
18. Q10 A country’s central bank cannot change the monetary policy once it has been set
    • A) Explain the causes for the changing face central banks in India. 8
    • B) Explain Inflation Targeting and Exchange rate targeting and discuss its importance 7
    • C). Discuss the traditional role and function of RBI 8
    • D). Explain the regulatory role of RBI 7
19. Q3 (A). Explain the role and functions of various departments of RBI. 8 marks
    • (B) Describe the structure and composition of the Central board of RBI. 7
    • (C) Explain the qualitative instruments utilized in India's monetary policy framework. 8
    • (D) Explain the objectives and instruments of fiscal policy used by the government. 7
20. Q4 (A) Explain important provisions discussed under Banking Regulations Act 1949
    • (B) Explain the functions of department of supervisory. 7
    • (C) Explain the structure of Indian Money Market. 8
    • (D) Elaborate the functions and characteristics in Indian Financial system. 7
21. Q5 (A) Explain the Structure and functions of Bank for International Settlement. 8 marks
    • (B) Explain the structure of Bank of England. 7
22. Q5 (C) Write short notes on (Any three) 15 marks
    • i. Limitations of fiscal policy
    • iv. IMF
    • v. Risk in New IT ERA

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