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Important Terms Related to Money Markets
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1.
Which of the following is a short-term debt instrument issued by the government to manage liquidity in the economy?
Treasury Bills (T-Bills)
Commercial Papers (CPs)
Certificate of Deposit (CD)
Call Money
2.
What is the purpose of the Cash Reserve Ratio (CRR)?
To provide loans to banks
To control inflation by regulating money supply
To stabilize exchange rates
To increase liquidity in the economy
3.
Which of the following instruments is used in the call money market for overnight lending and borrowing?
Treasury Bills
Commercial Papers
Call Money
Certificate of Deposit
4.
Which term describes the rate at which RBI lends money to commercial banks against government securities?
Repo Rate
Reverse Repo Rate
Bank Rate
Discount Rate
5.
Which of the following instruments is issued by financial institutions and corporations to raise short-term capital?
Treasury Bills
Commercial Papers
Call Money
Ways and Means Advances
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