SSC CGL Finance – Economic Reforms in India; Money & Banking – Level 3 · Challenge

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SSC CGL Finance – Economic Reforms in India; Money & Banking – Level 3 · Challenge – 8 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.  
Imaginary data: currency in circulation ₹ 4,500 crore, bankers' deposits with RBI ₹ 900 crore, other deposits with RBI ₹ 70 crore. Reserve money (M0) is:

Correct Answer: C [₹ 5,470 crore]

Explanation:

M0 = 4,500 + 900 + 70 = 5,470.

2.  
Reserve money ₹ 3,000 crore; c = 0.1; r = 0.15. Money supply is:

Correct Answer: D [₹ 13,200 crore]

Explanation:

m = 1.1/0.25 = 4.4 → 3,000 × 4.4 = 13,200.

3.  
True/false countHow many statements are true?
(i) A rise in repo rate makes bank borrowing from the RBI costlier.
(ii) SLR assets include approved government securities.
(iii) Selling securities in OMO injects liquidity.
(iv) The Bank Rate is kept aligned with the MSF rate.

Correct Answer: C [Three]

Explanation:

(iii) false – selling securities absorbs liquidity.

4.  
Chronological orderArrange in chronological order:
1. Nationalisation of six more banks
2. Nationalisation of the RBI
3. Introduction of GST
4. New Economic Policy

Correct Answer: A [2, 1, 4, 3]

Explanation:

Answer: 2, 1, 4, 3. 1949 → 1980 → 1991 → 2017.

5.  
CRR is cut from 4% to 3% when banks' NDTL is ₹ 2,40,00,000 crore (imaginary). The cash released is:

Correct Answer: B [₹ 2,40,000 crore]

Explanation:

Answer: ₹ 2,40,000 crore. 1% of 2,40,00,000 = 2,40,000.

6.  
Nominal interest 15% and inflation 10%. The exact real interest rate (Fisher) is about:

Correct Answer: D [4.5%]

Explanation:

Answer: 4.5%. 1.15/1.10 − 1 = 4.55%.

7.  
Statement-basedUnder the flexible inflation targeting framework, the target notified for April 2026 – March 2031 is:

Correct Answer: A [4% CPI inflation with a band of 2% to 6%]

Explanation:

rbi.org.in: 4% CPI target, tolerance 2–6%, retained for 1 April 2026 – 31 March 2031.

8.  
The RBI fails its inflation target if average CPI inflation is above 6% (or below 2%) for:

Correct Answer: B [Three consecutive quarters]

Explanation:

Then the RBI must report reasons, remedies and a timeframe to the Central Government.

➤ 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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