SSC CGL Economy – Money & Inflation – Level 1 · Warm-up · Tier I Level

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SSC CGL Economy – Money & Inflation – Level 1 · Warm-up · Tier I Level – 12 questions, subject: Indian Economy. Every question has the correct answer with a one-line explanation; tap "Show Answer". Free practice for TNPSC, UPSC, SSC, Bank and RRB exams – Shanmugam IAS Academy, Coimbatore.

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1.  
The main problem of barter that money removes is:

Correct Answer: A [the need for a double coincidence of wants]

Explanation:

Under barter both sides must want what the other has; money removes this need.

2.  
Currency notes of ₹ 2 and above carry the signature of the:

Correct Answer: D [Governor of the RBI]

Explanation:

RBI issues notes of ₹ 2 and above (Governor's signature); the ₹ 1 note is a Government issue (Finance Secretary's signature).

3.  
Which measure of money supply is known as 'narrow money'?

Correct Answer: B [M1]

Explanation:

M1 = currency with public + demand deposits + other deposits with RBI.

4.  
Which of the classic money measures is the LEAST liquid?

Correct Answer: C [M4]

Explanation:

Liquidity order M1 > M2 > M3 > M4; M4 adds all post-office deposits.

5.  
Reserve money (M0) is also called:

Correct Answer: B [high-powered money]

Explanation:

M0 is the base on which bank money is built – high-powered money.

6.  
A sustained fall in the general price level is called:

Correct Answer: C [Deflation]

Explanation:

Deflation = negative inflation.

7.  
Inflation along with stagnant output and high unemployment is called:

Correct Answer: D [Stagflation]

Explanation:

Stagnation + inflation = stagflation.

8.  
Unexpected inflation generally benefits:

Correct Answer: A [debtors]

Explanation:

Debtors repay with money that buys less – 'Debtors Dance, Creditors Cry'.

9.  
Fill in the blankThe Wholesale Price Index does NOT include ______.

Correct Answer: A [services]

Explanation:

WPI covers goods only; the CPI covers services as well.

10.  
One-line recall'Bad money drives out good money' is known as:

Correct Answer: C [Gresham's law]

Explanation:

Answer: Gresham's law. Named after Thomas Gresham.

11.  
The CPI rises from 180 to 198. The inflation rate is:

Correct Answer: B [10%]

Explanation:

(198 − 180) ÷ 180 × 100 = 10%.

12.  
Statement-based
I. The RBI has the sole right to issue bank notes in India.
II. Coins in India are minted by the RBI under the RBI Act.
Which is/are correct?

Correct Answer: D [Only I]

Explanation:

Coins are issued by the Government under the Coinage Act, 2011.

➤ Full notes, shortcuts and every answer explained – SSC CGL 2026 Indian Economy book (₹149): www.shanmugamiasacademy.in/study-materials/ssc-cgl-indian-economy

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