Question 1

The Pradhan Mantri Mudra Yojana (PMMY) was launched to provide loans to which category of borrowers?

Accepted Answer

PM Mudra Yojana is a scheme to provide collateral-free loans to micro and small enterprises and individual entrepreneurs who are not covered by existing schemes.

Question 2

The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme was launched in which year?

Accepted Answer

PM-KISAN is a direct income support scheme for farmers launched by the Government of India to provide financial assistance of ₹6,000 per year in three equal installments.

Question 3

What is the primary objective of Monetary Policy as conducted by the Reserve Bank of India?

Accepted Answer

The RBI's monetary policy aims to maintain price stability while supporting economic growth. It uses tools like repo rate, reverse repo rate, and CRR to manage money supply and inflation.

Question 4

Which of the following is NOT a tool used by the RBI to implement Monetary Policy?

Accepted Answer

The RBI uses several tools to manage money supply and inflation, including repo rate, reverse repo rate, CRR, and SLR. However, direct taxation is a fiscal tool used by the government, not the RBI.

Question 5

Which of the following best describes Fiscal Deficit in the context of Union Budget?

Accepted Answer

Fiscal deficit is the difference between total government expenditure and total government revenue (excluding borrowing). It indicates the amount the government needs to borrow to meet its spending obligations.

Question 6

The Pradhan Mantri Mudra Yojana (PMMY) was launched to provide loans to micro and small enterprises. What is the maximum loan amount under the PMMY scheme?

Accepted Answer

PMMY provides collateral-free loans to micro and small enterprises. The scheme has three categories: Shishu (up to ₹50,000), Kishore (₹50,001 to ₹5 lakh), and Tarun (₹5 lakh to ₹10 lakh).

Question 7

The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme was launched in which year and is administered by which ministry?

Accepted Answer

PM-KISAN was launched in February 2019 to provide direct income support to all landholding farmer families. It is administered by the Ministry of Agriculture & Farmers Welfare.

Question 8

Revenue Deficit in the Union Budget refers to which of the following?

Accepted Answer

Revenue Deficit is the difference between revenue expenditure and revenue receipts. It indicates that the government's recurring expenses exceed its recurring income.

Question 9

In the context of India's monetary policy, the RBI uses the Reverse Repo Rate as a tool to manage liquidity. Which of the following best describes the primary purpose of the Reverse Repo Rate?

Accepted Answer

The Reverse Repo Rate is the interest rate at which the RBI borrows money from commercial banks. When the RBI wants to absorb excess liquidity from the banking system, it increases the Reverse Repo Rate, making it more attractive for banks to park their surplus funds with the RBI rather than lend in the market.

Question 10

In the context of India's monetary policy framework, if the RBI intends to reduce liquidity in the banking system without changing the repo rate, which of the following operations would be most effective?

Accepted Answer

This question tests understanding of RBI's liquidity management tools and the distinction between repo rate changes and open market operations (OMOs). The correct answer requires knowledge of how RBI uses OMOs to manage liquidity independently of the policy rate.

Question 11

As per the Union Budget 2024-25, what is the primary objective of the Fiscal Deficit target announced by the Government of India?

Accepted Answer

The Union Budget 2024-25 set a fiscal deficit target of 4.9% of GDP for FY 2024-25, with a medium-term goal to bring it down to 4.5% by FY 2025-26. This reflects the government's commitment to fiscal consolidation while maintaining growth.

Question 12

The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme was launched in which year, and what is the annual income support provided to eligible farmers?

Accepted Answer

PM-KISAN was launched in February 2019 by the Ministry of Agriculture & Farmers Welfare. It provides direct income support of ₹6,000 per year (₹2,000 per installment in three equal parts) to eligible small and marginal farmers.

Question 13

Under the Monetary Policy framework, the RBI uses the Repo Rate as a key instrument. If the RBI increases the Repo Rate, what is the immediate effect on commercial bank lending?

Accepted Answer

When the RBI increases the Repo Rate (the rate at which RBI lends to commercial banks), it becomes more expensive for banks to borrow. This leads to an increase in the cost of funds for banks, which they pass on to customers by raising their lending rates (Prime Lending Rate). This reduces credit availability and borrowing by businesses and individuals.

Question 14

The Pradhan Mantri Jan Dhan Yojana (PMJDY) was launched to achieve financial inclusion. Which of the following is NOT a key feature of this scheme?

Accepted Answer

PMJDY, launched in August 2014, aims to provide universal access to banking services. Key features include: (1) Zero-balance bank accounts, (2) RuPay debit cards, (3) Accidental insurance cover of ₹1 lakh, (4) Life insurance cover of ₹30,000. The scheme does NOT provide direct cash transfers or subsidized loans as core features.

Question 15

Which of the following best defines 'Revenue Deficit' in the context of Union Budget terminology?

Accepted Answer

Revenue Deficit occurs when revenue receipts (tax and non-tax revenue) fall short of revenue expenditure (salaries, interest payments, subsidies, etc.). It indicates that the government is spending more on non-productive items than it earns from regular sources.

SSC CPO Budget, Fiscal & Monetary Policy

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