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Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Money and Banking

Question:

Match List I with List II

 List I List II
A. CRR I. Buying and selling of government securities by RBI from/to the public and commercial banks
B. SLR II. Percentage of deposits that a bank must keep as reserves with RBI
C. Repo rate III. Rate at which RBI lends money to commercial banks to meet their short term needs
D. Open market operations IV. Percentage of deposits that a bank must keep as reserves in liquid form with itself

Choose the correct answer from the options given below:

Options:

A-I, B-II, C-III, D-IV

A-II, B-IV, C-I, D-III

A-II, B-IV, C-III, D-I

A-IV, B-II, C-III, D-I

Correct Answer:

A-II, B-IV, C-III, D-I

Explanation:

CRR which stands for "Cash Reserve Ratio" is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. 

SLR which stands for "Statutory Liquidity Ratio" is a minimum percentage of deposits that a commercial bank has to maintain with itself in the form of liquid cash, gold or other securities. 

Repo Rate is the rate at which a nation’s central bank gives money to commercial banks in times of a cash shortage. 

Open market operation is the sale and purchase of government securities in open by the Central Bank.

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