SSC CGL Finance – Economic Reforms in India; Money & Banking – Level 1 · Warm-up

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SSC CGL Finance – Economic Reforms in India; Money & Banking – Level 1 · Warm-up – 12 questions, subject: Finance & Economics (Tier II Paper III). 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 economic reforms of 1991 are summed up by the letters LPG. P stands for:

Correct Answer: A [Privatisation]

Explanation:

Liberalisation, Privatisation, Globalisation.

2.  
The basic (primary) function of money is to act as a:

Correct Answer: D [Medium of exchange]

Explanation:

Medium of exchange and measure of value are primary; the others are secondary.

3.  
Which measure of money is called 'narrow money'?

Correct Answer: B [M1]

Explanation:

M1 (and M2) are narrow money; M3 is broad money.

4.  
One-line fact recallThe Reserve Bank of India was nationalised on:

Correct Answer: C [1 January 1949]

Explanation:

RBI began on 1 April 1935 and was nationalised on 1 January 1949.

5.  
The rate at which the RBI lends overnight to banks against government securities under the LAF is the:

Correct Answer: A [Repo rate]

Explanation:

Repo = RBI lends to banks against securities with an agreement to repurchase.

6.  
The share of net demand and time liabilities that a bank must keep as cash balance with the RBI is the:

Correct Answer: D [Cash Reserve Ratio (CRR)]

Explanation:

CRR is kept with the RBI; SLR is kept by the bank in liquid assets.

7.  
An increase in CRR by the RBI will:

Correct Answer: C [Reduce banks' capacity to lend]

Explanation:

More cash locked with the RBI → less credit creation.

8.  
Moral suasion is a:

Correct Answer: B [Qualitative (selective) instrument of monetary policy]

Explanation:

Persuasion by the central bank, without changing any ratio.

9.  
One-line fact recallFourteen major commercial banks were nationalised in India in:

Correct Answer: D [1969]

Explanation:

19 July 1969 – 14 banks; 1980 – six more.

10.  
A bank receives a deposit of ₹ 8,000 and the required reserve ratio is 25%. Maximum total deposits created in the system:

Correct Answer: C [₹ 32,000]

Explanation:

8,000 ÷ 0.25 = 32,000 (new credit 24,000).

11.  
One-line fact recallGoods and Services Tax (GST) was introduced in India from:

Correct Answer: B [1 July 2017]

Explanation:

GST came into force on 1 July 2017 after the Constitution (101st Amendment) Act, 2016.

12.  
The Narasimham Committee (1991) is associated with reforms of the:

Correct Answer: A [Financial and banking system]

Explanation:

Narasimham Committee I (1991) – financial system; II (1998) – banking sector.

➤ Full notes, shortcuts and every answer explained – SSC CGL 2026 Finance & Economics (Tier II Paper III) book (₹149): www.shanmugamiasacademy.in/study-materials/ssc-cgl-finance-economics

📘 SSC CGL 2026 – General Studies – Finance & Economics (Tier II Paper III)
Here you get the answer with a one-line explanation. 1,064 original questions with worked answers · Part A Finance & Accounts and Part B Economics & Governance notes · practice sets + 3 mock tests
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