Bank Theory

Expanded MCQs: Monetary & Fiscal Policy | National Income | Union Budget Monetary Policy and Tools 1. Which of the following is NOT a tool of monetary policy? Repo Rate Reverse Repo Rate Public Debt CRR Answer: c) Public Debt 2. During the Global Financial Crisis (2008), RBI mainly: Increased interest rates Reduced CRR and SLR Cut down budget deficit Privatized banks Answer: b) Reduced CRR and SLR 3. Who formulates the monetary policy in India? Finance Ministry Prime Minister's Office RBI NITI Aayog Answer: c) RBI 4. SLR refers to: Statutory Lending Rate Statutory Liquidity Ratio Standard Lending Rate Special Liquidity Reserve Answer: b) Statutory Liquidity Ratio Fiscal Policy ...

Business Cycles and Economic Policies 1. Characteristics of a Business Cycle A business cycle refers to the fluctuations in economic activity that an economy experiences over a period of time. It consists of expansions and contractions in GDP and other macroeconomic indicators. Business cycles are recurrent and periodic but not regular. They affect employment, output, income, and prices. They are global in nature, often influenced by international trade and finance. Governments use policy tools to minimize their adverse effects. 2. Phases of a Business Cycle Expansion: Increase in GDP, employment, investment, and income. Peak: Economy reaches its maximum output; inflation may rise. Recession: Decline in GDP for two consecutive quarters; rising unemployment. Trough: Lowest point in economic activity; recovery begins. Recovery: Economy begins to grow again, leading into the next expansion. Example: India...