Economics/Economics Central Bank Sample Test,Sample questions

  It creates credit:

1.Central bank

2.Commercial banks


4.Stock exchange

  It is a monetary employment:

1.Increase in govt. expenditure

2. Increase govt. saving

3.Increase in interest rate

4.Reducing interest rate

  It is NOT an instrument of monetary policy:

1.Bank rate

2.Open market operations

3.Change in reserve ratio

4.Issue notes

  Monetary policy has the objective:

1.Decrease unemployment rate

2.Decrease tax rate

3.Decrease inflation rate

4. All of the above

 Central bank s rate of landing to commercial banks is called:

1.Interest rate

2.Discount rate

3.Money rate

4.Control rate

 Every country establishes central bank to:

1.Issue notes

2.Supervise commercial banks

3.Give loans to businessmen

4. (a) and (b) of above

 In order to reduce consumer borrowing:

1.Bank deposits are increased

2.Incomes of govt. employees are reduced

3.Interest rate is increased

4.Foreign exchange rate is reduced

 Open market operations is:

1.Buying and selling bills of exchange

2.Buying and selling govt. securities

3.Buying and selling shares of companies

4.Buying and selling foreign exchange

 Out of the following the only recognised legal tender is:


2.Bank notes and coins

3.Bank notes and cheques

4.Credit card

 State Bank of Pakistan has departments:

1.Issue and banking department

2.Issue and research departments

3.Banking and research department

4.Issue research and banking department

 State Bank policy of regulating interest rate is called:

1.Banking policy

2.Monetary policy

3.Fiscal policy

4.Commercial policy

 State Bank was established in:





 When a central bank wants to increase money supply in circulation:

1.Purchases govt. securities

2.Lowers bank rate

3.Directs banks to advance more loans

4. (a) and (b) of above

 When the State Bank wants to decrease money supply in the country it:

1.Buys govt. securities in stock market

2.Sells govt. securities

3.Lowers discount rate

4. (b) and (c) of above

 Which is the most widely used tool of monetary policy:

1.Clearing house

2.Open-market operations

3. Discount rate

4.Issuing of notes

 Which organisation controls the banking system in most countries?

1.Central bank

2.Commercial banks

3.Investment Bank

4.World Bank

 Which organistion controls the banking system:

1.Central bank

2.Provincial bank

3.Investment Bank

4.World Bank

 Which statement is true of the relationship between bond prices and bond yields?

1.They vary inversely

2.They vary directly

3.They are not related

4.They are related in long run and not in the short run

10-rupees note is issued by:

1.National Bank

2.State Bank

3.Govt. of Pakistan

4.Governor State Bank

Acting as lender of last resort a central bank lends to:

1.Money markets

2.Stock exchange

3.Commercial banks

4.Does not lend

Credit money is controlled by:


2.Commercial banks

3.Central bank


Discount rate of State Bank of Pakistan is:

1.Less than 5%

2.More than 5% but not more than 15%

3.More than 15% but not more than 25%

4.More than 25%

Every country establishes central bank to:

1. Issue currency

2.To prepare government budget

3.To extablish commercial banks

4. All of the above

If SLR (statutaory liquidity ratio) is 20% and a bank gets a new deposit of 10 million the total increase in its deposits can rise up to:

1.20 millions

2.50 millions

3.100 millions

4.200 0millions

In order to reduce consumer borrowing this is raised:

1.Commercial bank deposits

2.Government spending

3.Interest rate

4.The exchange rate

Monetary policy consists of:

1.Decreasing taxes

2.Changing total money supply

3.Checking commercial banks

4.Printing of money

Open market operations refer to:

1.Buying and selling of foreign currencies

2.Buying and selling govt. securities

3.Buying and selling shares in stock market

4.Buying and selling of goods in free market

State Bank of Pakistan is run by:

1.Board of directors

2.Board of governors

3.Board of managers

4.Board of bankers

The money called legal tender includes:

1.Currency notes and credit cards

2.Currency notes and bank deposits

3.Currency notes and cheque

4.Currency notes and coins

Treasury bill is used for

1.Getting short term loans

2.Getting long term loans

3.Treasry bill is not credit instrument

4.Treasury bill is a govt. tax bill

Which is a monetary measure to increase employment

1.Increase in govt. expenditure

2.Reduce govt. expenditure

3.Increase in interest rate

4.Reducing interest rate


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  15. Economics Balance of Payments
  16. Economics Central Bank
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  23. Economics Demand and Supply Set-1
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  36. Economics National Income Accounting Set-2
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  38. MCQ Indian Economy Set 1
  39. MCQ Indian Economy Set 2
  40. MCQ Indian Economy Set 3
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