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RRB NTPC GK Questions 2026

Static General Knowledge makes up the rest of the General Awareness section in RRB NTPC, and the notices name its topics: General Science and Life Science up to Class 10, History of India and the freedom struggle, Physical, Social and Economic Geography of India and the world, Indian Polity and Governance, Indian Economy, Art and Culture, Indian Literature, Monuments and Places, Flora and Fauna, Famous Personalities, the UN and other world organisations, environmental issues, Transport Systems in India, Important Government and Public Sector Organisations, Common Abbreviations, and Basics of Computers and Computer Applications. RRB frames these as short factual questions: the unit of a physical quantity, the year of a battle, the article of the Constitution, the river a city stands on, the full form of an abbreviation, the headquarters of an organisation. GK24's GK notes on this page cover each topic in English and Hindi, arranged the way the syllabus lists them, with the facts RRB tends to ask placed first. Work through one topic at a time, note the lists (national parks, dances, articles, schedules, awards), and pair each topic with its quiz on GK24 to check what has stayed with you.

RRB NTPC GK Questions with Answers

Q141.Indian EconomyAsked in: SSC CGL · 26 Jul 2023, Shift 2Easy

Which of the following institutions was set up in 1982 in order to streamline credit facilities to farmers at a national level?

  1. A.NEDFI
  2. B.NABARD
  3. C.IFCI
  4. D.SIDBI
Show answer

Correct answer: B. NABARD

Explanation

The correct answer is B, NABARD. The National Bank for Agriculture and Rural Development was set up on 12 July 1982 by an Act of Parliament, on the recommendation of the Sivaraman Committee (CRAFICARD), as the apex body for rural and farm credit. It took over the agricultural credit work of the Reserve Bank and the whole of the Agricultural Refinance and Development Corporation. Its headquarters is in Mumbai, it refinances cooperative banks and regional rural banks, and it runs the Rural Infrastructure Development Fund. The year 1982 and the words "farmers" and "national level" together point only to NABARD. A, NEDFI, the North Eastern Development Finance Corporation, was set up in 1995 to fund projects in the North-East. C, IFCI, the Industrial Finance Corporation of India, was India's first development bank, founded in 1948 for industry, not farmers. D, SIDBI, the Small Industries Development Bank of India, began in 1990 at Lucknow for small and medium enterprises. Exam tip: IFCI 1948, NABARD 1982, SIDBI 1990, NEDFI 1995.

Q142.Indian EconomyAsked in: SSC CGL · 13 Dec 2022, Shift 4Medium

_____ are known as narrow money.

  1. A.M1 and M2
  2. B.M2 and M4
  3. C.M3 and M2
  4. D.M1 and M4
Show answer

Correct answer: A. M1 and M2

Explanation

The correct answer is A, M1 and M2. The Reserve Bank of India measures money supply in four grades, M1 to M4, in decreasing order of liquidity. M1 is currency with the public plus demand deposits of banks plus other deposits with the RBI, and M2 is M1 plus savings deposits with post offices. Both consist of money that can be spent at once, so they are called narrow money. M3 adds the time deposits of banks to M1, and M4 adds all post office deposits to M3; these two are broad money because they include savings locked for a period. M3 is the measure the RBI usually quotes as "money supply". B, M2 and M4, mixes a narrow and a broad measure. C, M3 and M2, does the same in the other order. D, M1 and M4, pairs the narrowest with the broadest. Exam tip: M1, M2 narrow; M3, M4 broad; M3 is the headline figure.

Q143.GeographyAsked in: SSC CGL · 26 Jul 2023, Shift 1Easy

Which of the following is the longest lake in India?

  1. A.Shivaji Sagar Lake
  2. B.Indira Sagar lake
  3. C.Chilika Lake
  4. D.Vembanad Lake
Show answer

Correct answer: D. Vembanad Lake

Explanation

The correct answer is D, Vembanad Lake. Vembanad in Kerala is the longest lake in India, stretching about 96 km from Alappuzha to Kochi, and it is also the largest lake of Kerala. It is a brackish backwater lagoon separated from the Arabian Sea by a narrow barrier, it is a Ramsar wetland since 2002, and the famous Nehru Trophy snake-boat race is held on it at Punnamada every August. Willingdon Island, on which Kochi port stands, was raised inside this lake. A, Shivaji Sagar Lake, is the reservoir of the Koyna dam in Maharashtra, a man-made lake. B, Indira Sagar, is the reservoir of the Indira Sagar dam on the Narmada in Madhya Pradesh, the largest reservoir in India by water volume but not the longest lake. C, Chilika Lake in Odisha is the largest brackish-water lagoon in India and Asia by area, but it is shorter than Vembanad. Exam tip: longest lake Vembanad, largest brackish lagoon Chilika, largest freshwater lake Wular.

Q144.GeographyAsked in: SSC CGL · 27 Jul 2023, Shift 3Medium

The Shevaroy Hills are located in which state of India?

  1. A.Chhattisgarh
  2. B.Odisha
  3. C.Rajasthan
  4. D.Tamil Nadu
Show answer

Correct answer: D. Tamil Nadu

Explanation

The correct answer is D, Tamil Nadu. The Shevaroy Hills, also spelt Servarayan, rise near Salem in Tamil Nadu and are part of the Eastern Ghats. Their best-known spot is the hill station of Yercaud, about 1,500 metres high, famous for coffee plantations, oranges and the Yercaud lake, which is why the range is sometimes called the "poor man's Ooty". The Shevaroys form a set with the other Eastern Ghats hills of Tamil Nadu, the Javadi, Kalrayan and Pachaimalai hills, and all four sit between the Palar and Kaveri river basins. A, Chhattisgarh, has the Maikal range and the Bastar plateau. B, Odisha, has the Garhjat hills and Mahendragiri in its stretch of the Eastern Ghats. C, Rajasthan, has the Aravalli range with Guru Shikhar as its highest point. Exam tip: Shevaroy, Javadi, Kalrayan and Pachaimalai are Tamil Nadu's Eastern Ghats hills; Yercaud sits on the Shevaroys.

Q145.GeographyAsked in: SSC CGL · 19 Sep 2024, Shift 1Medium

The Wardha is a tributary of which of the following rivers?

  1. A.Mahanadi river
  2. B.Tapi river
  3. C.Godavari river
  4. D.Narmada river
Show answer

Correct answer: C. Godavari river

Explanation

The correct answer is C, Godavari river. The Wardha rises in the Satpura range near Multai in the Betul district of Madhya Pradesh, flows south-east through Vidarbha and meets the Wainganga; the combined stream is called the Pranhita, which is the largest tributary of the Godavari and joins it at Kaleshwaram in Telangana. So the Wardha reaches the Godavari through the Pranhita, and both names appear in exams. The Godavari is the longest river of peninsular India, about 1,465 km, rising at Trimbakeshwar near Nashik and ending in the Bay of Bengal. A, Mahanadi, is fed by the Seonath, Ib, Tel and Ong, not the Wardha. B, Tapi, receives the Purna, Girna and Panzara. D, Narmada, has tributaries like the Tawa and Hiran. Exam tip: Wardha + Wainganga = Pranhita, and Pranhita, Indravati, Manjra all feed the Godavari, the "Dakshin Ganga".

Q146.GeographyAsked in: SSC CGL · 26 Jul 2023, Shift 1Medium

Aner, Panzara and Waghur are the tributaries of which river?

  1. A.Kaveri
  2. B.Mahanadi
  3. C.Tapi
  4. D.Godavari
Show answer

Correct answer: C. Tapi

Explanation

The correct answer is C, Tapi. Aner, Panzara and Waghur all join the Tapi in the Khandesh region of northern Maharashtra, along with the Purna, Girna and Bori. The Tapi rises near Multai in the Betul district of Madhya Pradesh, flows west for about 724 km through the Satpura and Ajanta ranges and the Khandesh plain, and enters the Gulf of Khambhat near Surat. With the Narmada it is one of the two big west-flowing rivers of the Peninsula that run through rift valleys and form estuaries instead of deltas. The Ukai dam in Gujarat is built on it. A, Kaveri, has the Kabini, Bhavani and Amaravati as tributaries. B, Mahanadi, is joined by the Seonath, Ib and Tel. D, Godavari, receives the Pranhita, Indravati and Manjra. Exam tip: Tapi group = Purna, Girna, Panzara, Waghur, Aner, Bori; Tapi and Narmada are the west-flowing pair.

Q147.Indian HistoryAsked in: SSC CGL · 27 Jul 2023, Shift 1Medium

The Lomas Rishi cave which is a manmade cave is located in which state of India?

  1. A.Maharashtra
  2. B.Karnataka
  3. C.Madhya Pradesh
  4. D.Bihar
Show answer

Correct answer: D. Bihar

Explanation

The correct answer is D, Bihar. The Lomas Rishi cave is one of the Barabar caves in the Barabar Hills of Jehanabad district, about 25 km north of Gaya. These are the oldest surviving rock-cut caves in India, carved from hard granite in the Mauryan period, in the third century BCE, and their inner walls carry the famous glass-like Mauryan polish. Ashoka and his grandson Dasharatha gave the caves to the Ajivika monks, as inscriptions at the site record. The Lomas Rishi cave is best known for its doorway, carved to look like the arched wooden entrance of a hut, the earliest "chaitya arch" that later appears at Bhaja, Karle and Ajanta. A, Maharashtra, has the later Buddhist caves of Ajanta, Ellora, Karle and Bhaja. B, Karnataka, has the Badami cave temples of the Chalukyas. C, Madhya Pradesh, has Bhimbetka rock shelters and Udayagiri caves, but not Lomas Rishi. Exam tip: Barabar and Lomas Rishi, Mauryan, Ajivikas, Bihar.

Q148.Indian HistoryAsked in: SSC CGL · 12 Apr 2022, Shift 3Medium

In which of the following years was the civil disobedience campaign completely ceased?

  1. A.1917
  2. B.1934
  3. C.1923
  4. D.1943
Show answer

Correct answer: B. 1934

Explanation

The correct answer is B, 1934. Gandhi formally withdrew the Civil Disobedience Movement in April 1934, after it had lost momentum under heavy repression. The movement had begun on 12 March 1930 with the Dandi March and the breaking of the salt law on 6 April 1930. It was suspended after the Gandhi–Irwin Pact of 5 March 1931, when Gandhi agreed to attend the Second Round Table Conference in London. The conference failed, Gandhi was arrested on his return, and the movement was restarted in January 1932, but by 1934 most leaders were in jail and it was called off. So the movement has three dates to keep apart: 1930 launch, 1931 pause, 1934 end. A, 1917, is the year of the Champaran Satyagraha, Gandhi's first movement in India. C, 1923, is when the Swaraj Party was formed by C. R. Das and Motilal Nehru. D, 1943, is the year Subhas Chandra Bose set up the Azad Hind Government in Singapore. Exam tip: Civil Disobedience 1930 to 1934, with the 1931 pact in between.

Q149.Indian HistoryAsked in: SSC CGL · 12 Apr 2022, Shift 3Medium

King Lalitaditya Muktapida ruled over __________.

  1. A.Gujarat
  2. B.Sikkim
  3. C.Kerala
  4. D.Kashmir
Show answer

Correct answer: D. Kashmir

Explanation

The correct answer is D, Kashmir. Lalitaditya Muktapida was the most powerful king of the Karkota dynasty of Kashmir in the eighth century, ruling roughly from 724 to 760 CE. He is remembered for building the Martand Sun Temple near Anantnag, whose ruins still stand, and for founding the town of Parihaspora as his capital. Almost everything we know about him comes from Kalhana's Rajatarangini, the twelfth-century Sanskrit chronicle of the kings of Kashmir, which credits him with campaigns against Yashovarman of Kannauj and with wide conquests. The words Karkota, Martand and Rajatarangini all point to Kashmir, so any one of them settles the question. A, Gujarat, was ruled at that time by the Maitrakas of Valabhi and later the Chaulukyas. B, Sikkim, had no such king; its Namgyal kingdom began only in 1642. C, Kerala, was under the Cheras and never had a Karkota ruler. Exam tip: Lalitaditya, Karkota, Martand temple, Rajatarangini all mean Kashmir.

Q150.Indian HistoryAsked in: SSC CGL · 02 Dec 2022, Shift 1Medium

Which of the following combinations of 'Ruler – Predecessor' is correct with respect to the Delhi Sultanate?

  1. A.Alauddin Khalji – Jalaluddin Khalji
  2. B.Iltutmish – Balban
  3. C.Muhammad Tughluq – Firuz Shah Tughluq
  4. D.Ghiyasuddin Tughluq – Muhammad Tughluq
Show answer

Correct answer: A. Alauddin Khalji – Jalaluddin Khalji

Explanation

The correct answer is A, Alauddin Khalji – Jalaluddin Khalji. Jalaluddin Khalji founded the Khalji dynasty in 1290, and in 1296 his nephew and son-in-law Alauddin had him killed at Kara and took the throne. Alauddin then ruled till 1316, fixed market prices, kept a large standing army and sent Malik Kafur into the Deccan. In the pair, the first name is the ruler and the second is the person who ruled just before him, so you only need to check who came first. B is wrong because Balban came after Iltutmish: Iltutmish ruled from 1211 to 1236 and Balban from 1266 to 1287. C is wrong because Firuz Shah Tughluq succeeded Muhammad Tughluq in 1351, so he is the successor, not the predecessor. D is wrong for the same reason in reverse: Ghiyasuddin Tughluq founded the dynasty in 1320 and Muhammad Tughluq followed him in 1324. Exam tip: Jalaluddin to Alauddin 1296, Ghiyasuddin to Muhammad 1324, Muhammad to Firuz 1351.

Q151.Indian HistoryAsked in: SSC CGL · 03 Dec 2022, Shift 1Hard

Which of the following sequence is correct with respect to the Delhi Dynasties?

  1. A.Khalji dynasty, Lodi dynasty, Sayyid dynasty
  2. B.Tughluq dynasty, Khalji dynasty, Sayyid dynasty
  3. C.Early Turkish Rulers, Rajput dynasties, Khalji dynasty
  4. D.Rajput dynasties, Khalji dynasty, Tughluq dynasty
Show answer

Correct answer: D. Rajput dynasties, Khalji dynasty, Tughluq dynasty

Explanation

The correct answer is D, Rajput dynasties, Khalji dynasty, Tughluq dynasty. This is the only option in which every dynasty comes after the one before it. The full order of the rulers of Delhi, as the NCERT table gives it, is: Rajput dynasties, the Tomaras and the Chauhans, in the early twelfth century; Early Turkish Rulers from 1206 to 1290, starting with Qutbuddin Aibak; the Khalji dynasty from 1290 to 1320; the Tughluq dynasty from 1320 to 1414; the Sayyid dynasty from 1414 to 1451; and the Lodi dynasty from 1451 to 1526, ending with Ibrahim Lodi at Panipat. A is wrong because the Sayyids ruled before the Lodis, not after. B is wrong because the Khaljis came before the Tughluqs. C is wrong because the Rajput rulers of Delhi came before the Turkish rulers, not after. Exam tip: remember the chain Rajput, Turk (Slave), Khalji, Tughluq, Sayyid, Lodi with the years 1206, 1290, 1320, 1414, 1451, 1526.

Q152.Indian PolityAsked in: SSC CGL · 16 Aug 2021, Shift 1Medium

Which of the following Articles of the Constitution of India provides for the creation of a GST Council?

  1. A.Article 246A
  2. B.Article 279A
  3. C.Article 269A
  4. D.Article 323A
Show answer

Correct answer: B. Article 279A

Explanation

The correct answer is B, Article 279A. It empowers the President to constitute the Goods and Services Tax Council, a joint forum of the Centre and the States. The Article was inserted by the Constitution (One Hundred and First Amendment) Act, 2016, the same amendment that brought GST, and the Council was set up in September 2016. The Union Finance Minister is its Chairperson, the Union Minister of State for Finance and the finance or taxation ministers of all States are its members, and decisions need a three-fourths weighted majority in which the Centre holds one-third of the votes and the States together two-thirds. A, Article 246A, gives Parliament and the State legislatures the power to make laws on GST. C, Article 269A, deals with the levy and collection of GST on inter-State trade, that is, IGST. D, Article 323A, provides for administrative tribunals and has nothing to do with tax. Exam tip: 246A power to tax, 269A inter-State GST, 279A GST Council; all three came with the 101st Amendment.

Q153.Indian PolityAsked in: SSC CGL · 11 Jun 2019, Shift 1Medium

Which article of the Constitution of India talks about the provisions for impeachment of the President of India?

  1. A.Article 51
  2. B.Article 61
  3. C.Article 63
  4. D.Article 54
Show answer

Correct answer: B. Article 61

Explanation

The correct answer is B, Article 61. It lays down the procedure for impeachment of the President, the only ground being "violation of the Constitution". The charge may be started in either House by a resolution signed by at least one-fourth of its members, with fourteen days' notice, and must be passed by a majority of not less than two-thirds of the total membership of that House. The other House then investigates, the President may appear and be represented, and if it too passes the resolution by a two-thirds majority the President stands removed. No Indian President has ever been impeached. A, Article 51, is a Directive Principle on promoting international peace and security. C, Article 63, simply says there shall be a Vice-President of India. D, Article 54, is about the election of the President by the electoral college. Exam tip: 54 election, 56 term, 61 impeachment, 63 Vice-President.

Q154.Indian PolityAsked in: SSC CGL · 17 Jul 2023, Shift 2Medium

Which part of the Constitution of India contains the provisions of Union Executive?

  1. A.Part V
  2. B.Part III
  3. C.Part IV
  4. D.Part VI
Show answer

Correct answer: A. Part V

Explanation

The correct answer is A, Part V. Part V is titled "The Union" and its first chapter, "The Executive", covers the President, the Vice-President, the Council of Ministers and the Attorney-General. Part V runs from Article 52 to Article 151 and also contains Parliament, the legislative powers of the President, the Union Judiciary (Supreme Court) and the Comptroller and Auditor-General. Article 52 is the opening line: "There shall be a President of India." Whatever belongs to the Centre as an institution lives in Part V. B, Part III, is Fundamental Rights, Articles 12 to 35. C, Part IV, is the Directive Principles of State Policy, Articles 36 to 51. D, Part VI, is "The States", Articles 152 to 237, which has the Governor, the state legislature and the High Courts, the state mirror of Part V. Exam tip: Part V is the Union, Part VI is the States; Part III rights, Part IV directives.

Q155.Indian PolityAsked in: SSC CGL · 24 Jul 2023, Shift 1Medium

Which Article of the Constitution of India mentions that law declared by Supreme Court is binding on all courts?

  1. A.Article 143
  2. B.Article 142
  3. C.Article 144
  4. D.Article 141
Show answer

Correct answer: D. Article 141

Explanation

The correct answer is D, Article 141. It says that the law declared by the Supreme Court shall be binding on all courts within the territory of India. This Article is the constitutional base of the doctrine of precedent: a ruling of the Supreme Court becomes the law for every High Court and lower court until the Supreme Court itself changes it. Note the exact words, because they are lifted straight into exam questions: "law declared", "binding on all courts", "within the territory of India". A, Article 143, is the advisory jurisdiction under which the President may seek the opinion of the Supreme Court. B, Article 142, lets the Court pass any order needed to do complete justice in a case. C, Article 144, directs all civil and judicial authorities to act in aid of the Supreme Court. Exam tip: remember the run 141 binding law, 142 complete justice, 143 advice to the President, 144 authorities act in aid.

Q156.Indian EconomyAsked in: RRB NTPC · 12 Jun 2022, Shift 2 (CBT 2, Level 5)Medium

The situation in an economy when inflation and unemployment both are at higher levels is known as __________.

  1. A.stagflation
  2. B.inflation premium
  3. C.inflationary gap
  4. D.reflation
Show answer

Correct answer: A. stagflation

Explanation

The correct answer is A, stagflation. Stagflation is a blend of the words stagnation and inflation: output stops growing, unemployment rises, and yet prices keep climbing. Normally inflation and unemployment move in opposite directions, as the Phillips curve shows, so stagflation is a puzzle for policy makers, because raising interest rates to cool prices worsens unemployment while spending to create jobs pushes prices higher. The classic example is the 1970s, when the oil price shocks of 1973 and 1979 hit western economies with slow growth and double-digit inflation at the same time. B is wrong because an inflation premium is the extra return lenders demand to make up for expected inflation. C is wrong because an inflationary gap is the amount by which total demand exceeds full-employment output, a situation of too much demand, not of high unemployment. D is wrong because reflation is a deliberate policy of boosting demand to lift an economy out of a slump. Exam tip: stagflation equals high inflation plus high unemployment plus stagnant growth, remembered by the 1970s oil crisis.

Q157.Indian HistoryAsked in: RRB NTPC · 12 Jun 2022, Shift 1 (CBT 2, Level 5)Medium

The Sanskrit drama 'Ratnavali', about the love story of Princess Ratnavali is said to have been written by ________.

  1. A.Kalidasa
  2. B.Harsha
  3. C.Bhavabhuti
  4. D.Vishakhadutta
Show answer

Correct answer: B. Harsha

Explanation

The correct answer is B, Harsha. Ratnavali is one of three Sanskrit plays attributed to Emperor Harshavardhana of Kannauj, who ruled from 606 to 647 CE; the other two are Priyadarshika and Nagananda. Ratnavali tells how Princess Ratnavali of Simhala, living in disguise as Sagarika, wins the love of King Udayana of Vatsa. Harsha was a great patron of learning as well as a writer: Banabhatta lived at his court and wrote Harshacharita and Kadambari, the Chinese pilgrim Hiuen Tsang visited him, and he held assemblies at Kannauj and Prayag. A is wrong because Kalidasa, of the Gupta age, wrote Abhijnanashakuntalam, Meghaduta and Raghuvamsha. C is wrong because Bhavabhuti, in the court of Yashovarman, wrote Uttararamacharita and Malatimadhava. D is wrong because Vishakhadatta wrote Mudrarakshasa about Chanakya and Chandragupta Maurya. Exam tip: Harsha's three plays are Ratnavali, Priyadarshika and Nagananda; his biographer was Banabhatta.

Q158.Indian PolityAsked in: RRB NTPC · 14 Jun 2022, Shift 2 (CBT 2, Level 3)Easy

Fill in the blank using words contained in the Preamble to the Constitution of India: We, ______, having solemnly resolved to constitute India into a SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLIC and to secure to all its citizens....

  1. A.The Supreme Court
  2. B.The Indian Parliament
  3. C.The Central Government
  4. D.The People of India
Show answer

Correct answer: D. The People of India

Explanation

The correct answer is D, The People of India. The Preamble opens with the words WE, THE PEOPLE OF INDIA, which declare that the Constitution draws its authority from the people, not from any king, court or legislature. It goes on to promise Justice, Liberty, Equality and Fraternity, and ends by recording that the Constituent Assembly adopted, enacted and gave the Constitution to ourselves on 26 November 1949. The Preamble is based on Nehru's Objectives Resolution of 1946; the words Socialist, Secular and Integrity were added by the 42nd Amendment in 1976; and in the Kesavananda Bharati case (1973) the Supreme Court held that the Preamble is a part of the Constitution. A is wrong because the Supreme Court is created by the Constitution and cannot be its author. B is wrong because Parliament too gets its powers from the Constitution. C is wrong because the Central Government is only an organ that works under the Constitution. Exam tip: Preamble begins We the People, adopted 26 November 1949, amended once in 1976.

Q159.GeographyAsked in: RRB NTPC · 14 Jun 2022, Shift 1 (CBT 2, Level 3)Medium

Which of the following river basins is the most populated in the world?

  1. A.Ganga
  2. B.Nile
  3. C.Mississippi
  4. D.Amazon
Show answer

Correct answer: A. Ganga

Explanation

The correct answer is A, Ganga. The Ganga basin is the most populous river basin on earth, home to more than 600 million people across India, Nepal, Bangladesh and a small part of Tibet. In India alone it covers about 8.6 lakh square km, roughly a quarter of the country, across Uttarakhand, Uttar Pradesh, Bihar, Jharkhand, West Bengal, Haryana, Delhi and parts of Madhya Pradesh, Rajasthan and Chhattisgarh, and it supports about 40 percent of India's population. Fertile alluvial soil, plentiful groundwater and a long farming history explain the dense settlement. B is wrong because the Nile, though the longest river, flows mostly through desert and its basin holds far fewer people. C is wrong because the Mississippi basin lies in the thinly populated interior of the USA. D is wrong because the Amazon has the largest discharge and basin area but its rainforest is among the least populated regions on earth. Exam tip: Ganga is the most populated basin; Amazon is the largest by area and water; Nile is the longest river.

Q160.Indian EconomyAsked in: RRB NTPC · 16 Jun 2022, Shift 3 (CBT 2, Level 2)Medium

________ refer to central bank purchases or sales of government securities in order to expand or contract money in the banking system and influence interest rates.

  1. A.National market operations
  2. B.Closed market operations
  3. C.Open market operations
  4. D.International market operations
Show answer

Correct answer: C. Open market operations

Explanation

The correct answer is C, Open market operations. Open market operations, or OMO, are the buying and selling of government securities by the central bank in the open market to control the money supply. When the RBI buys government bonds it pays money to banks, so liquidity in the system rises and interest rates tend to fall; when it sells bonds it pulls money out, tightening liquidity and pushing rates up. OMO is a quantitative tool of monetary policy, used along with the cash reserve ratio, the statutory liquidity ratio, the repo rate and the bank rate, and the RBI also uses it to manage the government's borrowing programme. A is wrong because national market operations is not a term used in monetary policy. B is wrong because closed market operations does not exist; the whole point is that the trades happen in the open market. D is wrong because international market operations would refer to foreign exchange dealings, not government securities. Exam tip: RBI buys securities means more money, RBI sells securities means less money; that is OMO.