RRB NTPC Economics and Finance 2 — Questions and Answers
Question 1: The repo rate is defined as the rate at which the Reserve Bank of India lends money to which entities?
- Foreign banks operating in India
- Commercial banks in India (Correct answer)
- State governments
- Public sector undertakings
Correct answer: Commercial banks in India
The repo rate is the rate at which the RBI lends short-term funds to commercial banks against government securities, used as a key tool to control inflation and liquidity.
Question 2: SEBI (Securities and Exchange Board of India) primarily regulates which sector?
- Banking and insurance sector
- Securities and capital markets (Correct answer)
- Foreign direct investment
- Agricultural commodity trading
Correct answer: Securities and capital markets
SEBI was established in 1992 to regulate and develop the securities markets in India, protecting investors and ensuring fair market practices.
Question 3: What does NABARD stand for?
- National Association for Banking and Rural Development
- National Bank for Agriculture and Rural Development (Correct answer)
- National Bureau for Agricultural Revenue Distribution
- New Authority for Banking and Regional Development
Correct answer: National Bank for Agriculture and Rural Development
NABARD stands for National Bank for Agriculture and Rural Development, established in 1982 to provide credit and development support to agriculture and rural industries.
Question 4: What is Cash Reserve Ratio (CRR)?
- The percentage of deposits banks must invest in government bonds
- The minimum percentage of deposits banks must keep as reserves with the RBI (Correct answer)
- The ratio of cash to total assets of the RBI
- The percentage of cash banks must hold in their own vaults
Correct answer: The minimum percentage of deposits banks must keep as reserves with the RBI
CRR is the minimum percentage of a bank's net demand and time liabilities (NDTL) that must be maintained as cash reserves with the RBI, used to control liquidity.
Question 5: What does FDI stand for in the context of international economics?
- Fiscal Debt Index
- Foreign Direct Investment (Correct answer)
- Federal Debt Instrument
- Financial Development Initiative
Correct answer: Foreign Direct Investment
FDI stands for Foreign Direct Investment, which refers to investment made by a company or individual in one country into business interests in another country.
Question 6: The headquarters of the Reserve Bank of India is located in which city?
- New Delhi
- Kolkata
- Chennai
- Mumbai (Correct answer)
Correct answer: Mumbai
The Reserve Bank of India's central office is located in Mumbai (formerly Bombay), though it was originally established in Kolkata in 1935 and moved to Mumbai in 1937.
Question 7: Which of the following is a direct tax in India?
- Customs Duty
- GST
- Income Tax (Correct answer)
- Excise Duty
Correct answer: Income Tax
Income Tax is a direct tax levied directly on the income of individuals and entities and paid directly to the government by the taxpayer.
RRB NTPC Economics and Finance 2
The repo rate is defined as the rate at which the Reserve Bank of India lends money to which entities?