Financial Markets And Institutions Set 5
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This set of Financial Markets and Institutions Multiple Choice Questions & Answers (MCQs) focuses on Financial Markets And Institutions Set 5
Q1 | If interest rates rise, the present value of any future earnings is bound to:
- Fall
- Rise
- Suffer from inflation
- Increase in risk
Q2 | In the loanable fund’s theory of interest determination, an increase in the productivity ofcapital equipment should lead to:
- A reduction in the amount of saving
- More employment
- Higher interest rates
- Higher prices
Q3 | If savers decide to save more, ceteris paribus, the loanable funds theory predicts:
- A reduction in investment and interest rates
- An increase in investment and interest rates
- Higher economic growth
- A reduction in interest rates and more investment
Q4 | According to the Fisher hypothesis, the nominal rate of interest consists of:
- A stable real rate plus a variable risk premium
- A real rate plus a liquidity premium plus a risk premium
- A stable real rate plus a variable inflation premium
- An inflation premium plus a liquidity premium
Q5 | According to the liquidity preference theory of interest, an increase in uncertainty, otherthings being equal, will:
- Decrease output and employment
- Increase risk aversion
- Reduce the demand for money
- Raise interest rates
Q6 | The ability of central banks to influence short-term interest rates rests upon:
- Government policy
- Their role as lenders of last resort
- Their supervisory role
- Sales of government bonds
Q7 | A central bank which sets the short-term rate of interest must:
- Buy treasury bills
- Meet the resulting demand for reserves
- Sell government bonds
- Change the reserve ratios
Q8 | According to --------- theory of interest, the rate of Interest is the price of credit which isdetermined by the demand and supply for loanable funds.
- Loanable Fund theory
- Productivity theory
- Abstinence theory
- None of these
Q9 | According to ------- theory interest arises on account of the productivity of capital.
- Loanable Fund theory
- Productivity theory
- Abstinence theory
- Classical theory
Q10 | The Time- Preference Theory of Interest was expounded by-----------
- John Rae
- Alfred Marshall
- JM Keynes
- JB Clark
Q11 | ----------- defined Interest as “an index of the community’s preference for a dollar ofpresent over a dollar of future income.”
- Fisher
- Alfred Marshall
- JM Keynes
- JB Clark
Q12 | According to ---------- theory, Interest is the reward for the productive use of the capital which is equal to the marginal productivity of physical capital.
- Loanable Fund theory
- Productivity theory
- Abstinence theory
- Classical theory
Q13 | Loanable Fund theory is also known as-----------
- Classical theory
- Neo-classical theory
- Demand and Supply theory
- Productivity theory
Q14 | Neo- Classical theory of interest was expounded by------------
- Prof. Fisher
- Alfred Marshall
- Knot Wicksel
- JB Clark
Q15 | According to Keynes, Interest is purely a ‘monetary phenomenon’.
- Fisher
- Alfred Marshall
- JM Keynes
- JB Clark
Q16 | Who propounded liquidity preference theory of interest?
- Prof.Fisher
- Alfred Marshall
- JM Keynes
- JB Clark
Q17 | ----------- is called as “Real Theory of Interest”
- Classical theory
- Neo-classical theory
- Demand and Supply theory
- Productivity theory
Q18 | Technical consultancy Organisations were set up by........................
- IFCI
- IDBI
- RBI
- SEBI
Q19 | ICICI was set up in ........................
- 1955
- 1964
- 1989
- 1935
Q20 | ........................ assists mainly to industrial undertakings in the private sector
- IFCI
- IDBI
- ICICI
- SEBI
Q21 | LIC was established in........................
- 1956
- 1964
- 1989
- gcv1935
Q22 | UTI was set up in the year ........................
- 1956
- 1964
- 1969
- 1948
Q23 | ................known as Brettonwood twins
- IDBI and IFCI
- IDBI and UTI
- IBRD and IMF
- RBI and SEBI
Q24 | World bank is also known as........................
- IMF
- ADB
- IBRD
- UNICEF
Q25 | World bank was set up in ........................
- 1945
- 1946
- 1947
- 1948