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General Awareness - Banking System & Capital Market short Questions & Answers for Examinations | Page-6

Questions
51 EXIM Bank was set-up in:
A 1980
B 1982
C 1984
D 1986

Answer: Option [B]

The correct answer is 1982. Exim Bank was established by the Government of India, under the Export-Import Bank of India Act, 1981 as a purveyor of export credit, mirroring global Export Credit Agencies. The Bank commenced its operations in March 1982.

52 Which of the following best defines the term ‘Letter of Credit’ as used frequently in bank transactions ?
A An order from a bank to another bank abroad authorizing the payment of a particular amount to a person named in the letter
B An unconditional undertaking given by a bank ensuing the payment of a particular amount to the drawee at a given date
C Letter by a bank to a person starting the terms and conditions of the loan sanctioned to him by the bank
D Statement showing outstanding deposits and credits of a bank for a particular period

Answer: Option [A]

The correct answer is an order from a bank to another bank abroad authorizing the payment of a particular amount to a person named in the letter. A letter of credit, or a credit letter, is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount.

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53 The Imperial Bank of India, in 1955 after nationalization was given the name of:
A Indian Overseas Bank
B Reserve Bank of India
C State Bank of India
D Bank of India

Answer: Option [C]

The Imperial Bank of India, in 1955 after nationalization was given the name of State Bank of India. The creation of the State Bank of India in July 1955 followed the passage of the Imperial Bank of India into state ownership. The nationalization of the Imperial Bank represented the culmination of a protracted debate on its role in independent India.

54 Regional Rural Banks:
I. Have limited area of operation
II. Have free access to liberal refinance facilities from NABARD
III. Are required to lend only to weaker sections
A I and III
B II and III
C I, II and III
D Only II

Answer: Option [C]

The correct answer is I, II and III.

55 The liabilities of a commercial bank are:
I. Time deposits
II. Security holdings
III. Demand deposits
IV. Advances from the central bank
A I, II and III
B I, III and IV
C II and IV
D I and III

Answer: Option [B]

The liabilities of a commercial bank are

  • Time deposits
  • Demand deposits
  • Advances from the central bank
56 Consumer gets maximum satisfaction at the point where
A Marginal Utility = Price
B Marginal Utility > Price
C Marginal Utility < Price
D Marginal Cost = Price

Answer: Option [A]

Consumer gets maximum satisfaction at the point where Marginal Utility = Price. A consumer gets maximum satisfaction from his limited income when the marginal utility per rupee spent is equal for all goods.

57 The equilibrium of a firm under perfect competition will be determined when
A Marginal Revenue > Average Cost
B Marginal Revenue > Average Revenue
C Marginal Revenue = Marginal Cost
D Marginal Cost > Average Cost

Answer: Option [C]

The equilibrium of a firm under perfect competition will be determined when Marginal Revenue = Marginal Cost.

58 Elasticity (e) expressed by the formula 1> e > 0 is
A Perfectly elastic
B Relatively elastic
C Perfectly inelastic
D Relatively inelastic

Answer: Option [D]

The correct answer is Relatively inelastic. Elasticity (e) expressed by the formula 1 > e > 0 is relatively inelastic. Elasticity is responsiveness of one variable to a change in another, when other conditions are held constant.

59 The marginal propensity to consume lies between
A 0 to 1
B 0 to ∝
C 1 to ∝
D ∝ to ∝

Answer: Option [A]

The marginal propensity to consume lies between 0 to 1. Marginal Propensity to Consume (MPC), is a ratio between change in consumption to change in income. This is the reason it lies between the range 0-1. It simply gives the proportion of addition income and it's consumption by an individual or household.

60 Exploitation of labour is said to exist when
A Wage = Marginal Revenue Product
B Wage < Marginal Revenue Product
C Wage > Marginal Revenue Product
D Marginal Revenue Product = 0

Answer: Option [B]

Exploitation of labour is said to exist when Wage < Marginal Revenue Product. The term "exploitation" is used to denote the payment of wages to labor less than its marginal revenue product. Under monopolistic competition, in this sense all factors are exploited. All firms employ labor until marginal revenue product equals marginal factor cost.

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