UPSC GS-3 Practice Covers Banking Liquidity and Satellite Orbits

This article gives civil-service students two questions to practise.

The first question is about banks having more money available than they need.

When there is too much money, short-term interest rates can fall below the rate the Reserve Bank of India wants to guide them.

This can make monetary policy less effective.

The RBI can use tools such as VRRR operations, OMOs and the CRR to manage the surplus.

The second question explains that satellites can fly at different heights above Earth.

LEO satellites are closer and can take sharper pictures with less delay, while MEO satellites are useful for navigation.

GSO satellites cover very large areas continuously, but they require more energy and have greater signal delays.