10 Questions
What is the primary purpose of credit creation by banks according to the text?
To increase deposits and economic activity
What does the text suggest is the relationship between savings and investment?
Investment is a function of savings, which determines the quantum of investment.
What is the primary objective of financial regulation?
To maintain market confidence, enhance financial stability, and ensure consumer protection.
What role does the central bank play in the credit creation process according to the text?
The central bank keeps a watch on the credit created and diverts the funds to the sectors of the economy that are beneficial to the country.
What is the key role of capital in the banking system according to the text?
Capital is used to absorb losses from non-payment of loans by borrowers.
What is the relationship between savings and investment according to the text?
Savings and investment are both determined by income, inflation, and interest rates.
What is the primary purpose of financial regulation according to the text?
To maintain market confidence, enhance financial stability, and ensure consumer protection.
What is the role of the central bank in the credit creation process?
The central bank diverts the funds created through credit to the sectors of the economy that are beneficial to the country.
What is the relationship between savings and investment according to the text?
Savings and investment are both determined by income, inflation, and interest rates.
What is the key role of capital in the banking system according to the text?
Capital is used to absorb losses from non-payment of loans by borrowers.
Learn about the structure of the Indian financial system and how it facilitates the flow of funds from savers to investors. Explore how economic development influences the financial system in India.
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