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100+ Free Guokao NFRA Banking & Insurance Practice Questions

Prepare for the National Civil Service Exam — NFRA Banking & Insurance Regulatory Professional Subject (国家金融监督管理总局职位专业科目笔试) exam with instant access — no signup required.

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2026 Statistics

Key Facts: Guokao NFRA Banking & Insurance Exam

Exam Title

Administering Body

Exam Structure

Duration

Passing Benchmark

Exam Cadence

The official 120-minute NFRA paper uses single-choice and multiple-choice questions with a 10% foundations, 80% position-category professional knowledge, and 10% English allocation. This 100-question study bank focuses on the finance category and preserves that high-level allocation.

Sample Guokao NFRA Banking & Insurance Practice Questions

Try these sample questions to test your Guokao NFRA Banking & Insurance exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1In macroeconomic monetary statistics compiled by the People's Bank of China (PBOC), which of the following is the precise definition of the narrowest money supply indicator, M0?
A.Currency in circulation outside the banking financial system (流通中现金)
B.M0 plus demand deposits of non-financial enterprises and institutions
C.Total vault cash reserves held across commercial banks and credit cooperatives
D.Total high-powered monetary base held by the central bank
Explanation: Under the PBOC monetary statistical framework, M0 represents currency in circulation (流通中现金), which comprises physical banknotes and coins held by the public outside commercial banks and the central bank. It possesses absolute liquidity and functions as the immediate medium of exchange for retail transactions.
2Which of the following components is included in China's narrow money supply measure (M1) but EXCLUDED from M0?
A.Personal household demand savings deposits (个人储蓄活期存款)
B.Corporate and institutional demand settlement deposits (单位活期存款)
C.Corporate fixed time deposits (单位定期存款)
D.Non-bank financial institution interbank deposits (非银行金融机构存款)
Explanation: In China's monetary statistics, M1 equals M0 plus corporate and institutional demand deposits (单位活期存款). Personal demand savings deposits are categorized under quasi-money within M2 rather than M1 because personal checking accounts historically were not utilized for direct enterprise trade settlements.
3When the year-on-year growth rate of broad money (M2) significantly exceeds that of narrow money (M1), leading to a widening positive 'M2-M1 scissors gap' (剪刀差), what economic dynamic does this primarily signal?
A.Enterprises are converting fixed deposits into demand deposits to accelerate operating investment
B.Consumer spending and real estate transaction turnover are expanding rapidly
C.Enterprises and households exhibit a preference for fixed time deposits and liquidity hoarding, reflecting cautious economic expectations
D.The central bank is executing aggressive open market liquidity drainage
Explanation: A widening positive M2-M1 scissors difference (M2 growth > M1 growth) indicates that funds are accumulating in term deposits, wealth management, and savings products (quasi-money) rather than flowing into active operational demand accounts (M1). This signals deposit term extension ('定期化') and cautious investment sentiment among corporate and household actors.
4In microeconomic consumer theory, if the price of Good X falls and the consumer purchases MORE of Good X, while Good X is proven to be an inferior good (低档品), which condition must hold regarding the income and substitution effects?
A.The substitution effect is negative and smaller in magnitude than the negative income effect
B.The substitution effect is positive and strictly exceeds the negative income effect in absolute magnitude
C.The substitution effect is zero and the income effect is positive
D.Both the substitution effect and income effect operate in the same positive direction
Explanation: For any good, the substitution effect of a price fall is always positive (buying more of the relatively cheaper good). For an inferior good, the income effect is negative (higher real income reduces demand). Since total demand increases, the positive substitution effect must outweigh the negative income effect. (If the negative income effect were larger, it would be a Giffen good).
5In the standard IS-LM macroeconomic model for a closed economy, how does an autonomous increase in government fiscal spending (G) affect the goods market and money market equilibrium?
A.The IS curve shifts rightward, leading to higher equilibrium output (Y) and a higher equilibrium interest rate (r)
B.The IS curve shifts leftward, leading to lower output and a lower interest rate
C.The LM curve shifts rightward, leading to higher output and a lower interest rate
D.The IS curve shifts rightward, but interest rates remain unchanged due to automatic money supply expansion
Explanation: An increase in government spending (G) stimulates aggregate demand, shifting the IS curve rightward. In the goods-money joint equilibrium, higher output (Y) raises transaction demand for money, driving up the equilibrium interest rate (r) along a given upward-sloping LM curve, resulting in partial crowding out.
6Under the classical AD-AS (Aggregate Demand - Aggregate Supply) framework, what is the short-run macroeconomic impact of a sudden negative supply shock, such as an abrupt surge in imported crude oil prices?
A.Aggregate demand curve shifts left, causing deflation and declining output
B.Short-run aggregate supply curve (SRAS) shifts left/upward, causing stagflation (higher price level and lower real output)
C.Long-run aggregate supply curve (LRAS) shifts right, boosting natural output
D.Short-run aggregate supply curve shifts right, lowering the overall price level
Explanation: A negative supply shock increases production costs across industries, shifting the Short-Run Aggregate Supply (SRAS) curve leftward/upward. This leads to cost-push inflation and economic contraction simultaneously—a phenomenon known as stagflation (滞胀).
7In a simple closed Keynesian expenditure model with no taxes and no imports, if the marginal propensity to consume (MPC) is 0.8, what is the government expenditure multiplier (k)?
A.1.25
B.4.0
C.5.0
D.8.0
Explanation: The simple Keynesian government expenditure multiplier formula is k = 1 / (1 - MPC). With MPC = 0.8, k = 1 / (1 - 0.8) = 1 / 0.2 = 5.0.
8According to the Mundell-Fleming model, under a FLOATING exchange rate regime with perfect international capital mobility, what is the effect of an expansionary monetary policy on domestic income (Y)?
A.Completely ineffective because capital inflows neutralize domestic currency depreciation
B.Ineffective because interest rates cannot deviate from world interest rates
C.Highly effective because lower domestic interest rates induce capital outflows, depreciating the currency and boosting net exports
D.Partially effective only if accompanied by simultaneous fiscal consolidation
Explanation: In the Mundell-Fleming model under floating exchange rates and perfect capital mobility, monetary expansion shifts LM* rightward, putting downward pressure on domestic interest rates. This triggers immediate capital outflows, causing currency depreciation. The depreciation makes domestic exports cheaper and imports dearer, increasing net exports (NX) and expanding equilibrium income (Y).
9In the Quantity Theory of Money formalized by Irving Fisher's equation of exchange (MV = PY), what key assumption underpins the classical proposition of long-run monetary neutrality?
A.Velocity of money (V) and real output (Y) are determined by structural real factors and remain constant in the long run
B.Money supply (M) directly determines real output (Y) while the price level (P) is fixed
C.Velocity of money (V) is perfectly proportional to the price level (P)
D.The price level (P) is rigid and output adjusts instantaneously to money supply fluctuations
Explanation: In classical monetary theory, transaction velocity (V) is fixed by payment institutional habits, and real output (Y) is fixed at the full-employment potential level by real factor endowments. Therefore, changes in money supply (M) translate purely into equiproportional changes in the aggregate price level (P), demonstrating monetary neutrality (货币中性).
10When the People's Bank of China (PBOC) conducts a 7-day reverse repurchase operation (7天期逆回购) in the open market, what is the immediate directional flow of funds and securities?
A.The PBOC sells securities to primary dealers and withdraws base money from the banking system
B.The PBOC purchases eligible securities from primary dealers and injects base money liquidity into the banking system
C.The PBOC permanently buys government bonds on the secondary market to retire national debt
D.Commercial banks deposit statutory reserves into central bank vaults without collateral
Explanation: In PBOC open market operations (公开市场操作), a reverse repo (逆回购) occurs when the central bank purchases eligible securities (such as government bonds) from primary dealers with an agreement to sell them back on maturity. This injects short-term base money liquidity into the interbank banking system.

About the Guokao NFRA Banking & Insurance Exam

The National Civil Service Exam NFRA professional subject (国家金融监督管理总局职位专业科目笔试) is a 120-minute objective paper for applicants to NFRA positions. The 2026 outline provides five position categories—finance, accounting, law, computer, and comprehensive—and allocates 10% to economics and finance foundations, 80% to the chosen category's professional knowledge, and 10% to English. This bank is an English-language, finance-track-focused MCQ study adaptation, not an official translation or exact format simulation.

Assessment

Question count varies by exam level

Time Limit

120 minutes (2 hours)

Passing Score

Competitive merit ranking for interview selection

Exam Fee

Set by the applicant's examination jurisdiction (National Financial Regulatory Administration (NFRA / 国家金融监督管理总局) & State Civil Service Administration (SCS))

Guokao NFRA Banking & Insurance Exam Content Outline

10%

economics-and-financial-fundamentals

Questions 1–10 sample the official common economics and finance foundation allocation.

55%

banking-regulation-and-risk-management

Questions 11–65 cover finance-track economics, monetary analysis, banking regulation, capital, liquidity, credit, market, and operational risk.

25%

insurance-regulation-and-solvency-oversight

Questions 66–90 provide finance-track insurance-law, prudential, actuarial, and solvency content. Together with questions 11–65, these form the bank's 80% professional-knowledge allocation.

10%

professional-english

Questions 91–100 test contextual vocabulary, grammar, editing, and reading comprehension in financial-regulatory contexts.

How to Pass the Guokao NFRA Banking & Insurance Exam

What You Need to Know

  • Passing score: Competitive merit ranking for interview selection
  • Assessment: Question count varies by exam level
  • Time limit: 120 minutes (2 hours)
  • Exam fee: Set by the applicant's examination jurisdiction

Keys to Passing

  • Work through all 100 available questions
  • Review every answer and explanation
  • Track weak areas and revisit them
  • Use our AI tutor for tough concepts

Guokao NFRA Banking & Insurance Study Tips from Top Performers

1Master Basel III & NFRA 2024 Capital Ratios: Memorize minimum CET1 (5%), Tier 1 (6%), Total CAR (8%), plus 2.5% conservation buffer, D-SIB surcharges (0.25%–1.5%), and the Tier 2 sub-debt 5-year 20%/year amortization rule.
2Understand C-ROSS II Solvency Standards: Know that Core Solvency Adequacy must be >=50%, Comprehensive Solvency Adequacy must be >=100%, and SARMRA assessment directly adjusts minimum capital requirements by up to ±10%.
3Drill Banking Prudential Limits: Memorize the 10% single-borrower credit limit, 15% group customer limit, RMB 500,000 deposit insurance cap, and the prohibition on unsecured loans to connected parties.
4Internalize PRC Insurance Law Doctrines: Understand that insurable interest must exist at contract inception for life insurance and at time of loss for property insurance; know the 2-year incontestable clause and 15-day cooling-off period.
5Review Monetary Policy Tools & Macro Models: Differentiate OMO reverse repo, MLF, and LPR pricing; understand IS-LM/AD-AS shifts, the Mundell-Fleming trilemma, and the dual-pillar regulatory framework (monetary + macroprudential).

Frequently Asked Questions

What is the NFRA Banking & Insurance Regulatory Professional Subject exam?

The NFRA Banking & Insurance Regulatory Professional Subject (国家金融监督管理总局职位专业科目笔试) is the statutory specialized written examination administered by the State Civil Service Administration and the NFRA for applicants to civil service positions at the National Financial Regulatory Administration. It evaluates specialized knowledge across economics/finance, banking supervision, and insurance solvency oversight.

How is the exam structured, timed, and scored?

The official outline specifies a 120-minute objective paper containing single-choice and multiple-choice questions. It does not state a fixed public item count. The current recruitment notice governs composite scoring and shortlisting.

What are the core blueprint modules tested on this examination?

The 2026 outline allocates 10% to economics and finance foundations, 80% to professional knowledge for the selected position category, and 10% to English. The five categories are finance, accounting, law, computer, and comprehensive. This bank focuses on the finance category.

What recent regulatory updates are reflected in the 2026 syllabus?

The syllabus reflects the 2023 national financial regulatory restructuring establishing the NFRA, the 2024 Commercial Bank Capital Management Rules (aligned with Basel III/IV), C-ROSS II (偿二代二期) insurance solvency standards, the PRC Civil Code guarantee rules, and updated macroprudential frameworks.

Why is this OpenExamPrep practice bank presented in English?

This practice bank provides a rigorous English-language multiple-choice adaptation with bilingual technical terms and statutory citations, allowing bilingual professionals, civil service candidates, and financial analysts to master Chinese financial regulation and pass specialized competitive assessments.