SSC CGL Economy – Money & Inflation – Level 3 · Challenge
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Liquidity order: M1 > M2 > M3 > M4.
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SSC CGL Economy – Money & Inflation – Level 3 · Challenge – 8 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. Data tableIn which year was the inflation rate the highest?
Directions (next 2 questions): CPI of an imaginary town (2021 = 100): 2021 – 100; 2022 – 106; 2023 – 113; 2024 – 120; 2025 – 126.
Correct Answer: C [2023]
Explanation:
2022: 6%; 2023: 7 ÷ 106 = 6.60%; 2024: 7 ÷ 113 = 6.19%; 2025: 6 ÷ 120 = 5%.
2.
Data tableThe purchasing power of ₹ 100 in 2025, in 2021 rupees, is closest to:
Correct Answer: D [₹ 79.37]
Explanation:
Answer: ₹ 79.37. 100 × 100 ÷ 126 ≈ ₹ 79.37.
3.
M = ₹ 4,000 crore, V = 5 and T = 1,000 crore units. If M rises to ₹ 4,800 crore with V and T unchanged, the price level becomes:
Correct Answer: B [24]
Explanation:
P = MV ÷ T: 20 → 4,800 × 5 ÷ 1,000 = 24 (up 20%).
4.
A basket: food (weight 60, price relative 125), others (weight 40, price relative 110). The weighted index is:
Correct Answer: A [119]
Explanation:
(125 × 60 + 110 × 40) ÷ 100 = (7,500 + 4,400) ÷ 100 = 119.
5.
Statement-based
I. The MPC has six members, of whom three are appointed by the Central Government.
II. The RBI Governor has a casting vote in the MPC.
III. The first inflation target (2016) was 4% CPI inflation with a band of 2% to 6%.
Which are correct?
I. The MPC has six members, of whom three are appointed by the Central Government.
II. The RBI Governor has a casting vote in the MPC.
III. The first inflation target (2016) was 4% CPI inflation with a band of 2% to 6%.
Which are correct?
Correct Answer: D [I, II and III]
Explanation:
All three follow from the RBI Act (Sections 45ZA, 45ZB) and the 2016 notification.
6.
Who is likely to LOSE from unexpected inflation?
Correct Answer: C [A retired person living on a fixed pension]
Explanation:
Fixed-income earners lose; debtors and holders of real assets tend to gain.
7.
The CPI is 150 now and inflation is 4% a year for the next two years. The index after two years will be:
Correct Answer: A [162.24]
Explanation:
150 × 1.04 × 1.04 = 162.24 (inflation compounds, so not 150 + 12).
8.
Arrange in orderArrange from most liquid to least liquid: I. M3 II. M1 III. M4 IV. M2
Correct Answer: D [II, IV, I, III]
Explanation:
Liquidity order: M1 > M2 > M3 > M4.
➤ Full notes, shortcuts and every answer explained – SSC CGL 2026 Indian Economy book (₹149): www.shanmugamiasacademy.in/study-materials/ssc-cgl-indian-economy
📘 SSC CGL 2026 – Indian Economy (Tier I + Tier II)
Here you get the answer with a one-line explanation. 773 original questions with answer key and explanations · mind-maps, notes, tables and shortcuts · Tier I and Tier II practice sets + 3 mock tests
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