Loading...
UPSC 2014: In the context of Indian economy, which of the following is/are the purpose/purposes of ‘Statutory Reserve Requirements’? 1. To enable the Central Bank to control the amount of advances the banks can create 2. To make the people’s deposits with banks safe and liquid 3. To prevent the commercial banks from making excessive profits 4. To force the banks to have sufficient vault cash to meet their day-to-day requirements Select the correct answer using the code given below.
(a)1 only
(b)1 and 2 only
(c)2 and 3 only
(d)1, 2, 3 and 4
Attempt This Question
Not attemptedCorrect Answer: (a) 1 only
Statutory Reserve Requirements (CRR with RBI and SLR in approved securities) are primarily a monetary-control tool that lets the central bank limit how much credit banks can create (statement 1). Deposit safety/liquidity, profit control, or forcing vault cash are not the stated statutory objectives; therefore statements 2-4 are not essential purposes. ([edukemy.com](https://edukemy.com/blog/upsc-prelims-2014-question-paper-with-answer-key-general-studies-paper-1/))
Related Current Affairs
Related UPSC Questions
More from Monetary Policy & Money Supply
2013moderate
Consider the following liquid assets: 1. Demand deposits with the banks 2. Time deposits with the banks 3. Savings deposits with the banks 4. Currency
2013moderate
Supply of money remaining the same when there is an increase in demand for money, there will be
2015moderate
When the Reserve Bank of India reduces the Statutory Liquidity Ratio by 50 basis points, which of the following is likely to happen?
Related Indian Economy Topics
2014External Sector & Balance Of Payments
With reference to Balance of Payments, which of the following constitutes/constitute the Current Account? 1. Balance of trade 2. Foreign assets 3. Bal
2014Infrastructure & Industry
With reference to two non-conventional energy sources called ‘coalbed methane’ and ‘shale gas’, consider the following statements : 1. Coalbed methane
Frequently Asked Questions
What is the correct answer to this UPSC 2014 Indian Economy question?▼
The correct answer is option (a): 1 only. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this Monetary Policy & Money Supply question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2014, GS Paper 1, as Question 33. It falls under Indian Economy > Monetary Policy & Money Supply.
What is the difficulty level of this UPSC question?▼
This question is rated "moderate". It requires sound conceptual understanding of the topic.
How many UPSC Prelims questions have been asked from Monetary Policy & Money Supply?▼
UPSC has asked 27 questions from Monetary Policy & Money Supply (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.