IGNOU BPAC 111 Important Questions With Answers English Medium
IGNOU BPAC 111 Important Questions With Answers English Medium-BPAC 111, offered by Indira Gandhi National Open University
(IGNOU), explores the intricate relationship between public finance and public
administration in India.
Course Structure:
- Block-1 Introduction to Public Finance and Administration
- Block-2 Budgeting and Budgetary Systems
- Block-3 Government Budgeting
- Block-4 Resource Mobilisation
- Block-5 Accounts and Audit Block-6 Financial Control
Q.1
Discuss the meaning, objectives and instruments of monetary policy.
IGNOU BPAC 111 Important Questions With Answers English Medium-Monetary policy refers to the strategic actions taken by
central banks to regulate key economic factors such as the money supply,
interest rates, and credit availability within an economy. This policy is aimed
at achieving specific macroeconomic objectives, including controlling
inflation, stabilizing economic growth, maintaining employment levels, and
ensuring financial system stability. To implement monetary policy effectively,
central banks employ a variety of instruments that influence the supply of
money and credit. Let's delve into each aspect in detail:
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Meaning of Monetary Policy: Monetary policy entails the
measures undertaken by central banks to manage economic factors like money
supply and interest rates. Its primary goal is to steer economic conditions
such as inflation, unemployment, and growth by regulating the availability and
cost of credit. Through such actions, central banks strive to attain their
objectives while upholding price stability and financial system resilience.
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Objectives of Monetary Policy:
Price Stability: A fundamental objective of monetary policy
is to maintain stable prices by keeping inflation within a targeted range. This
stability fosters economic efficiency, preserves purchasing power, and supports
sustainable economic expansion.
Economic Growth: Monetary policy also aims to bolster
sustainable economic growth by influencing interest rates and credit
accessibility. Lower interest rates spur borrowing and investment, thereby
stimulating economic activity and encouraging growth.
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Full Employment: Central banks often target achieving full
employment as a critical objective. By fostering economic growth and bolstering
aggregate demand, monetary policy endeavors to reduce unemployment levels and
promote job creation.
Financial Stability: Ensuring the stability of the financial
system is another key aim of monetary policy. Central banks monitor financial
markets and institutions to identify and mitigate risks to stability, such as
excessive leverage, asset bubbles, and systemic vulnerabilities.
Instruments of Monetary Policy:
Open Market Operations (OMOs): Central banks execute OMOs by purchasing or selling government securities in the open market. Buying securities injects liquidity into the banking system, lowering interest rates and expanding the money supply.
IGNOU BPAC 111 Important Questions With Answers English Medium-Conversely, selling securities withdraws
liquidity, elevating interest rates and contracting the money supply.
Discount Rate: This rate represents the interest rate at
which commercial banks borrow funds directly from the central bank. By
adjusting the discount rate, the central bank influences the cost of borrowing
for banks, thus affecting their lending and deposit rates. A lower discount
rate stimulates borrowing and economic activity, while a higher rate has the
opposite effect.
Reserve Requirements: Central banks mandate reserve requirements, specifying the proportion of deposits that banks must hold as reserves. By altering these requirements, the central bank influences banks' lending capacity and money creation.
IGNOU BPAC 111 Important Questions With Answers English Medium-Lowering reserve requirements boosts
lending, while raising them restricts lending.
Interest Rate Policy: Central banks set benchmark interest
rates, such as the federal funds rate in the U.S. or the repo rate in India.
Adjusting these rates impacts borrowing costs across the economy, affecting
consumer spending, investment, and aggregate demand. Lowering rates stimulates
economic activity, while raising them helps curb inflation and prevent economic
overheating.
Q.2
Write a note on the meaning and types of public finance
Q.3
Discuss the objectives and principles of public expenditure
Q.4
Describe in brief the various steps in budget enactment.
Q.5
The indirect tax in India, GST, has many advantages for different sectors.’
Elaborate
Q.6
Write a note on accounting system in India
Q.7
Impact of Recent Reforms in Fiscal Federalism
Q.8
Discuss the type of public finance
Q.9
Examine the scope and importance of financial administration
Q.10
Write a note on the meaning and instruments of monetary policy
Q.11
Write a note on budget formulation in India.
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Q.12
Discuss the scheme of classification of government accounts
Q.13
Describe the duties and powers of Comptroller and Auditor General of India
Q.14
Describe the procedure involved after the preparation of budget estimates.
Q.15
Explain the process of budget enactment in India
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