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    SSC CGL Tier-I Similar Paper (Based on 12 Sept 2025 Shift-2 Pattern)

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    SSC CGL Tier-I Similar Paper (Based on 12 Sept 2025 Shift-2 Pattern)
    SSC CGL Tier-I Similar Paper (Based on 12 Sept 2025 Shift-2 Pattern)


    📑 Paper Index
    • General Instructions
    • Section A – General Intelligence & Reasoning (Questions 1–25)
    • Section B – General Awareness (Questions 26–50)
    • Section C – Quantitative Aptitude (Questions 51–75)
    • Section D – English Comprehension (Questions 76–100)
    • Answer Key
    • Detailed Solutions & Explanations
     Part-1: General Intelligence & Reasoning (Q1–Q25)
     
    Q1. Find the missing number.
    3 : 15 :: 7 : ?

    A) 35
     B) 49
    C) 63
    D) 56

    Solution:
    3 × 5 = 15
    7 × 5 = 35

    Q2. Choose the odd one out.

    A) Square
    B) Rectangle
    C) Triangle
    D) Circle

    Solution:
    Square, Rectangle, and Triangle are polygons with straight sides. Circle has no sides.

    Q3. If APPLE = BQQMF, then MANGO = ?

    A) NBOHP
     B) NBMHP
    C) NBOGP
    D) OCPHQ

    Solution:
    Each letter is shifted by +1.

    Q4. Complete the series.
    2, 6, 12, 20, 30, ?

    A) 40
    B) 42
     C) 44
    D) 46

    Solution:
    Differences are +4, +6, +8, +10
    Next difference = +12
    30 + 12 = 42

    Q5. Which word cannot be formed from COMPETITION?

    A) Motion
    B) Option
    C) Topic
     D) Potion

    Solution:
    The letters required for Topic are not available in sufficient quantity.

    Q6. Rahul walks 10 m North, then 10 m East, then 10 m South. In which direction is he from the starting point?

    A) North
    B) South
    C) East
     D) West

    Solution:
    He ends up 10 m east of the starting point.

    Proper Solution (Step-by-Step):

    Assume Rahul starts at point O (0,0)

    1. Walks 10 m North
    • Position becomes (0,10)
    2. Walks 10 m East
    • Position becomes (10,10)
    3. Walks 10 m South
    • Position becomes (10,0)
    Now compare the final position (10,0) with the starting point (0,0).
    • Rahul is 10 m to the East of the starting point.
    Illustration:

    Shortcut Trick (For Competitive Exams):
     
    North (10 m) and South (10 m) cancel each other.
    Only 10 m East remains.

    Q7. Find the next term.

    AZ, CX, EV, GT, ?

    A) IR
     B) IQ
    C) JR
    D) KR

    Solution:
    First letters: A, C, E, G → +2
    Second letters: Z, X, V, T → −2

    Q8. If DOG = 26, CAT = 24, then BAT = ?

    A) 23
     B) 24
    C) 25
    D) 22

    Solution:
    B = 2, A = 1, T = 20
    2 + 1 + 20 = 23

    Q9. Mirror image of 2F8L

    A) L8F2
     B) 2F8L
    C) LF82
    D) 8LF2

    Exam Shortcut
    Mirror Image = Order Reverse (Left ↔ Right)
    Water Image = Top ↔ Bottom

    Example:
     
    ABCD → Mirror → DCBA
    1234 → Mirror → 4321
    2F8L → Mirror → L8F2

    Q10. Select the related word.

    Doctor : Hospital :: Teacher : ?

    A) School
     B) Library
    C) Office
    D) Market

    Q11. Find the odd one.

    A) January
    B) March
    C) May
    D) June

    Solution:
    January, March, and May have 31 days. June has 30 days.

    Q12. Arrange alphabetically.

    Mango
    Apple
    Banana
    Orange

    A) 2,3,1,4
     B) 2,1,3,4
    C) 3,2,1,4
    D) 1,2,3,4

    Step 1: Alphabetical Order (A to Z)
    Apple (A)
    Banana (B)
    Mango (M)
    Orange (O)
     
    Step 2: Write their original numbers
    Apple → 2
    Banana → 3
    Mango → 1
    Orange → 4

    So the correct sequence is: 2, 3, 1, 4

    Q13. Find the missing letter.

    A, D, G, J, ?

    A) L
    B) M
     C) N
    D) O

    Solution:
    Each letter increases by +3.

    Q14. Which number is different?

    A) 16
    B) 25
    C) 36
    D) 48

    Solution:
    16, 25, and 36 are perfect squares.

    Number Square?

    16           4²

    25           5²

    36           6²

    48 Not a perfect square

    Q15. If PEN = 39, then BOOK = ?

    A) 47
    B) 43
    C) 45
    D) 50

    Solution:
    Step 1: Find the value of PEN

    Use the alphabetical positions:
    P = 16
    E = 5
    N = 14

    PEN = 16 + 5 + 14 = 35

    PEN = 39
    Alphabet Value + 4
    35 + 4 = 39

    Step 2: Apply the same rule to BOOK

    Alphabet values:
    B = 2
    O = 15
    O = 15
    K = 11

    BOOK = 2 + 15 + 15 + 11 = 43

    BOOK = 43
    Alphabet Value + 4
    43 + 4 = 47

    Q16. Which figure completes the pattern?

    A) Triangle
    B) Circle
    C) Square
     D) Pentagon

    Q17. Statement:

    All pens are books. Some books are tables.

    Conclusion:
    I. Some pens are tables.
    II. Some books are pens.

    A) Only I
    B) Only II
     C) Both
    D) Neither

    Q18. Find the next number.

    5, 10, 20, 40, ?

    A) 60
    B) 80
     C) 70
    D) 90

    Observe the pattern:
    5 × 2 = 10
    10 × 2 = 20
    20 × 2 = 40
    40 × 2 = 80

    Each number is twice the previous number

    Q19. If South becomes North-East, then East becomes?

    A) South-East
     B) North-West
    C) South-West
    D) North-East
     
    Q20. Which pair is similar?

    A) Fish : Water
    B) Bird : Nest
    C) Lion : Forest
    D) All of these
     
    Q21. Find the odd number.

    8, 27, 64, 125, 150

    A) 8
    B) 27
    C) 125
    D) 150

    Solution:
    When you see numbers like 8, 27, 64, 125, immediately think of perfect cubes:
    2³ = 8
    3³ = 27
    4³ = 64
    5³ = 125

    Since 150 does not fit this pattern, it is the odd one out.

    Q22. If A = 1, B = 2, then CODE = ?

    A) 27
     B) 28
    C) 29
    D) 30

    Solution:
    C = 3, O = 15, D = 4, E = 5
    3 + 15 + 4 + 5 = 27

    Q23. Find the missing number.

    6, 12, 24, 48, ?

    A) 72
    B) 84
    C) 96
     D) 108

    Multiply the previous number by 2.

    48 × 2 = 96

    Q24. Which word is correctly arranged?

    A) India : Asia
    B) Gujarat : India
    C) Ahmedabad : Gujarat
    D) All of these
     
    Q25. Find the next term.

    1, 4, 9, 16, 25, ?

    A) 30
    B) 35
    C) 36
     D) 49

    Solution:
    The series is the sequence of perfect squares:
    1², 2², 3², 4², 5², 6² = 36.

    Part 2: General Awareness (Q26–Q50)

    Q26. Who is known as the "Father of the Indian Constitution"?

    A) Mahatma Gandhi
    B) Jawaharlal Nehru
    C) Dr. B. R. Ambedkar
     D) Sardar Patel

    Solution: Dr. B. R. Ambedkar chaired the Drafting Committee of the Constitution and is widely known as the Father of the Indian Constitution.

    Q27. Which gas is most abundant in Earth's atmosphere?

    A) Oxygen
    B) Nitrogen
     C) Carbon dioxide
    D) Hydrogen

    Solution: The atmosphere contains about 78% Nitrogen and 21% Oxygen.

    Q28. Which Article of the Constitution deals with the Right to Equality?

    A) Articles 12–35
    B) Articles 14–18
     C) Articles 19–22
    D) Articles 25–28

    Solution:
    The Right to Equality is one of the Fundamental Rights guaranteed by the Constitution of India.
    It is covered under Articles 14 to 18.

    Q29. The currency of Japan is:

    A) Won
    B) Yuan
    C) Yen
     D) Ringgit
     
    Q30. Which planet is known as the "Red Planet"?

    A) Venus
    B) Mars
     C) Mercury
    D) Jupiter 

    Solution:
    Mars is called the "Red Planet" because its surface contains a large amount of iron oxide (rust), which gives it a reddish appearance.

    Q31. Who discovered the sea route to India in 1498?

    A) Christopher Columbus
    B) Vasco da Gama
     C) Marco Polo
    D) Ferdinand Magellan
     
    Q32. Which is the largest gland in the human body?

    A) Pancreas
    B) Liver
     C) Thyroid
    D) Pituitary
     
    Q33. Which Fundamental Duty was added by the 86th Constitutional Amendment?

    A) Protect public property
    B) Respect the National Flag
    C) Provide education to children (6–14 years)
     D) Develop scientific temper
     
    Q34. "Jallianwala Bagh Massacre" took place in:

    A) 1915
    B) 1917
    C) 1919
     D) 1922
     
    Q35. Which vitamin is produced in the human body through sunlight?

    A) Vitamin A
    B) Vitamin C
    C) Vitamin D
     D) Vitamin K
     
    Q36. Which river is known as the "Sorrow of Bihar"?

    A) Ganga
    B) Kosi
     C) Yamuna
    D) Son
     
    Q37. The headquarters of ISRO is located in:

    A) Hyderabad
    B) Bengaluru
     C) Chennai
    D) New Delhi
     
    Q38. Which Mughal emperor built the Red Fort?

    A) Akbar
    B) Babur
    C) Shah Jahan
     D) Aurangzeb
     
    Q39. Which instrument measures atmospheric pressure?

    A) Thermometer
    B) Barometer
     C) Hygrometer
    D) Ammeter

    Q40. Which State is known as the "Spice Garden of India"?

    A) Tamil Nadu
    B) Kerala
     C) Karnataka
    D) Assam

    Q41. The SI unit of electric current is:

    A) Volt
    B) Ampere
     C) Ohm
    D) Watt
     
    Q42. Who wrote the book "Discovery of India"?

    A) Mahatma Gandhi
    B) Jawaharlal Nehru
     C) Subhas Chandra Bose
    D) Rabindranath Tagore

    Q43. Which Indian classical dance originated in Kerala?

    A) Bharatanatyam
    B) Kathak
    C) Kathakali
     D) Odissi

    Q44. RBI was established in:

    A) 1930
    B) 1935
     C) 1947
    D) 1950

    Q45. Which blood group is known as the universal donor?

    A) A+
    B) B+
    C) O−
     D) AB+

    Q46. The Tropic of Cancer passes through how many Indian states?

    A) 6
    B) 7
    C) 8
     D) 9

    Solution: Gujarat, Rajasthan, Madhya Pradesh, Chhattisgarh, Jharkhand, West Bengal, Tripura, and Mizoram.

    Q47. Which Schedule of the Constitution contains the list of recognized languages?

    A) Sixth Schedule
    B) Seventh Schedule
    C) Eighth Schedule
     D) Ninth Schedule

    Q48. Which Indian scientist is known as the "Missile Man of India"?

    A) Homi Bhabha
    B) Vikram Sarabhai
    C) Dr. A. P. J. Abdul Kalam
     D) C. V. Raman
     
    Q49. The headquarters of UNESCO is in:

    A) London
    B) New York
    C) Paris
     D) Geneva

    Q50. Which metal is liquid at room temperature?

    A) Iron
    B) Copper
    C) Mercury
     D) Aluminium

    Part 3: Quantitative Aptitude (Q51–Q75)

    Q51. What is 25% of 640?

    A) 140
    B) 150
    C) 160
     D) 170

    Solution:
    25% = 1/4
    640 ÷ 4 = 160

    Shortcut: 25% means divide by 4.

    Q52. A shopkeeper gives 10% discount on a product marked at ₹800. Find the selling price.

    A) ₹700
    B) ₹720
     C) ₹740
    D) ₹760

    Solution:
     Discount = 10% of 800 = ₹80
    Selling Price = 800 − 80 = ₹720

    Q53. The average of 15, 20, 25, 30, 35 is:

    A) 24
    B) 25
     C) 26
    D) 27

    Solution:
     Sum = 15 + 20 + 25 + 30 + 35 = 125
    Average = 125 ÷ 5 = 25

    Q54. Find the HCF of 24 and 36.

    A) 6
    B) 8
    C) 12
     D) 18
     
    Q55. A train travels 360 km in 6 hours. Its speed is:

    A) 50 km/h
    B) 55 km/h
    C) 60 km/h
     D) 65 km/h

    Solution:
     Speed = Distance ÷ Time = 360 ÷ 6 = 60 km/h

    Q56. If x = 8, then 3x + 5 = ?

    A) 27
    B) 28
    C) 29
     D) 30
     
    Q57. A sum doubles in 8 years at simple interest. The rate of interest is:

    A) 10%
    B) 12.5%
     C) 15%
    D) 8%

    Solution:
     SI = Principal
    R = (100 × 1) ÷ 8 = 12.5%

    Q58. The value of √784 is:

    A) 26
    B) 27
    C) 28
     D) 29
     
    Q59. A man buys an article for ₹500 and sells it for ₹575. Profit percentage is:

    A) 10%
    B) 12%
    C) 15%
     D) 18%
     
    Q60. Find the value of:
    18 × 5 − 24

    A) 64
    B) 66
     C) 68
    D) 70
     
    Q61. The ratio 12 : 18 in simplest form is:

    A) 2 : 3
     B) 3 : 4
    C) 4 : 5
    D) 5 : 6
     
    Q62. A can complete a work in 12 days. His one day's work is:

    A) 1/10
    B) 1/12
     C) 1/14
    D) 1/16
     
    Q63. Find the missing number:
    4, 9, 16, 25, ?

    A) 30
    B) 34
    C) 36
     D) 49
     
    Q64. The perimeter of a square is 48 cm. Find its side.

    A) 10 cm
    B) 11 cm
    C) 12 cm
     D) 13 cm
     
    Q65. Convert 0.75 into a fraction.

    A) 2/5
    B) 3/4
     C) 4/5
    D) 5/6
     
    Q66. If 5 pens cost ₹150, then 8 pens will cost:

    A) ₹220
    B) ₹230
    C) ₹240
     D) ₹250
     
    Q67. A number is increased by 20%. The new number is 360. Find the original number.

    A) 280
    B) 290
    C) 300
     D) 320

    Solution:
     Original = 360 × 100 ÷ 120 = 300

    Q68. The LCM of 8 and 12 is:

    A) 16
    B) 20
    C) 24
     D) 48
     
    Q69. A car covers 150 km in 3 hours. Speed is:

    A) 45 km/h
    B) 50 km/h
     C) 55 km/h
    D) 60 km/h
     
    Q70. If 2x = 18, then x = ?

    A) 8
    B) 9
     C) 10
    D) 12
     
    Q71. The area of a rectangle of length 15 cm and breadth 8 cm is:

    A) 110 cm²
    B) 115 cm²
    C) 120 cm²
     D) 125 cm²
     
    Q72. Find the simple interest on ₹4,000 at 5% per annum for 2 years.

    A) ₹300
    B) ₹350
    C) ₹400
     D) ₹450
     
    Q73. A batsman scores 45, 60, 55, 70 and 70 runs. His average score is:

    A) 58
    B) 59
    C) 60
     D) 61

    Solution:
     Total = 45 + 60 + 55 + 70 + 70 = 300
    Average = 300 ÷ 5 = 60

    Q74. What is 35% of 200?

    A) 60
    B) 65
    C) 70
     D) 75
     
    Q75. If the cost price of an article is ₹800 and it is sold at 10% profit, find the selling price.

    A) ₹860
    B) ₹870
    C) ₹880
     D) ₹890

    Solution:
     Selling Price = 800 + (10% of 800) = 800 + 80 = ₹880

    Part 4: English Comprehension (Q76–Q100)

    Q76. Choose the correctly spelled word.

    A) Accomodation
    B) Accommodation
     C) Acommodation
    D) Accommudation

    Explanation: Accommodation is the correct spelling.

    Q77. Choose the synonym of "Rapid".

    A) Slow
    B) Fast
     C) Weak
    D) Quiet
     
    Q78. Choose the antonym of "Ancient".

    A) Old
    B) Modern
     C) Historic
    D) Traditional
     
    Q79. Fill in the blank.
    She _____ to school every day.

    A) go
    B) goes
     C) going
    D) gone
     
    Q80. Choose the correct passive voice.
    They are writing a letter.

    A) A letter is written by them.
    B) A letter was written by them.
    C) A letter is being written by them.
     D) A letter has been written by them.
     
    Q81. Choose the correct indirect speech.
    He said, "I am busy."

    A) He said that I am busy.
    B) He said that he was busy.
     C) He says that he was busy.
    D) He told I was busy.
     
    Q82. Fill in the blank.
    The sun _____ in the east.

    A) rise
    B) rises
     C) rising
    D) rose
     
    Q83. Choose the correctly punctuated sentence.

    A) What is your name.
    B) What is your name?
     C) What, is your name?
    D) What is, your name?
     
    Q84. Choose the one-word substitution.
    One who cannot read or write

    A) Literate
    B) Scholar
    C) Illiterate
     D) Educated
     
    Q85. Choose the idiom meaning of "Hit the nail on the head."

    A) Miss the point
    B) Speak exactly right
     C) Work hard
    D) Hit someone
     
    Q86. Fill in the blank.
    He is good _____ Mathematics.

    A) in
    B) on
    C) at
     D) for
     
    Q87. Choose the correct article.
    He bought _____ umbrella.

    A) a
    B) an
     C) the
    D) no article
     
    Q88. Choose the synonym of "Brave."

    A) Cowardly
    B) Bold
     C) Weak
    D) Timid
     
    Q89. Choose the antonym of "Victory."

    A) Success
    B) Triumph
    C) Defeat
     D) Achievement
     
    Q90. Spot the error.

    He do not know the answer.

    A) He
    B) do not
     C) know
    D) the answer

    Correct Sentence: He does not know the answer.

    Q91. Fill in the blank.
    Neither Ram nor his friends _____ present.

    A) is
    B) are
     C) was
    D) has

    Rule: With neither...nor, the verb agrees with the subject nearest to it (friends).

    Q92. Choose the correct spelling.

    A) Government
     B) Goverment
    C) Government
    D) Govenment
     
    Q93. One-word substitution.
    A person who writes poems

    A) Novelist
    B) Poet
     C) Author
    D) Editor
     
    Q94. Fill in the blank.
    The train arrived _____ time.

    A) on
     B) at
    C) in
    D) for
     
    Q95. Choose the correctly spelled word.

    A) Enviroment
    B) Environment
     C) Environmant
    D) Enviornment
     
    Read the Passage and Answer Q96–Q100

    Passage:
    Riya loves reading books. She visits the library every Sunday and borrows two books. Reading helps her improve her vocabulary and knowledge. She also shares interesting stories with her friends.

    Q96. Where does Riya go every Sunday?

    A) School
    B) Market
    C) Library
     D) Park
     
    Q97. How many books does she borrow?

    A) One
    B) Two
     C) Three
    D) Four
     
    Q98. Reading improves her:

    A) Health
    B) Vocabulary and knowledge
     C) Singing
    D) Drawing
     
    Q99. Whom does she share stories with?

    A) Teachers
    B) Parents
    C) Friends
     D) Neighbours
     
    Q100. Choose the most suitable title.

    A) A School Trip
    B) Riya's Reading Habit
     C) My Garden
    D) Sports Day

    Important Note: This is a practice paper created to closely resemble the SSC CGL Tier-I examination pattern and difficulty level observed in the 12 September 2025 Shift-2 exam. It is not the official SSC question paper or an exact memory-based paper.

    The questions have been prepared by analyzing the latest SSC CGL syllabus, previous years' papers, and recent exam trends. The paper is designed to help aspirants understand the type of questions, improve speed and accuracy, and assess their preparation.
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    Thursday, August 6, 2026

    Macro Economic Issues and Policies (MEIP) Exam Paper – 26 February 2020 | Solved MCQs, Answers & Explanations

    August 06, 2026 0
    Macro Economic Issues and Policies (MEIP) Exam Paper – 26 February 2020 | Solved MCQs, Answers & Explanations
    S.Y B.COM
    SEMESTER - 4


    MACRO ECONOMIC ISSUES AND POLICIES
    (MEIP)
    EXAM PAPER – 26 FEB 2020
     
    Q1. To produce new currency, RBI adopted ______ reserve system in the year ______.

    A. Minimum, 1957
    B. Minimum, 1956
    C. Proportionate, 1957
    D. Proportionate, 1956

    Explanation:
    Initially RBI followed the Proportional Reserve System.
    Since 1957, RBI follows the Minimum Reserve System, under which it maintains minimum reserves of gold and foreign securities.

    Q2. In order to understand the burden of public borrowings ________.

    A. Rely upon government borrowing data
    B. We should talk to World Bank and IMF
    C. Classify borrowing into internal and external segment
    D. Understand government expenditure external segments

    Explanation:
    Public debt is mainly divided into:
    Internal Debt
    External Debt
    This classification helps understand the burden of public borrowing.

    Q3. The credit creation by the commercial banks directly depends on ______.

    A. Other Deposits with RBI and Bank Rate
    B. Other Deposits with RBI and CRR
    C. Primary Deposits and Bank Rate
    D. Primary Deposits and CRR

    Explanation:
    Credit creation depends upon:
    Primary Deposits (base for lending)
    Cash Reserve Ratio (CRR), which determines how much banks must keep with RBI.
    Higher CRR → Less lending.
    Lower CRR → More lending.

    Q4. According to Chakravarty Committee, which of the following is the main objective of Monetary Policy?

    A. Increasing Employment Opportunities
    B. Economic Growth
    C. Equitable Distribution of National Income
    D. Price Stabilization

    Explanation:
    The Chakravarty Committee recommended that the primary objective of monetary policy should be price stability, ensuring inflation remains under control while supporting economic growth.

    Q5. Bank rate policy will fail if there are ______.

    A. Integrated financial system
    B. Elastic interest rates
    C. Alternative sources of borrowing available
    D. Conducive economic environment

    Explanation:
    If businesses can borrow from other financial institutions instead of commercial banks, changes in the Bank Rate will have little effect.
    Hence Bank Rate Policy becomes ineffective.

    Q6. Velocity of circulation of money refers to ______.

    A. Circulation of money among people.
    B. Rate of change in currency against deposit.
    C. Average number of times a unit of currency changes hands.
    D. Circulation of money between and people.

    Explanation:
    Velocity of Money means:
    The average number of times one unit of money is used to purchase goods and services during a given period.
    Higher velocity → Higher economic activity.
    Lower velocity → Slower economy.

    Q7. Which of the following is correct with reference to the money supply in India?

    I. The share of currency in circulation is highest in the money supply.
    II. The share of bank money is highest in the money supply.
    III. CRR and credit money are inversely related.

    A. I and III
    B. II and III
    C. I, II and III
    D. I and II

    Explanation: Statement I : Incorrect
    In India, bank money (demand deposits) forms a larger share of the money supply than currency in circulation.

    Statement II : Correct
    Money supply mainly consists of:
    Currency with the public
    Demand deposits with banks
    Demand deposits (bank money) generally have the largest share.

    Statement III : Correct
    CRR (Cash Reserve Ratio) and credit creation have an inverse relationship.
    Higher CRR → Less lending
    Lower CRR → More lending

    Q8. Weighted Index Number is superior to Simple Index Number because ________.

    A. Weights are assigned as per importance of commodities.
    B. Weights are arbitrary to the extent of madness.
    C. Weights are assigned as per choice.
    D. Weights are generally uniform in nature.

    Explanation
    Weighted Index Numbers assign greater importance to commodities that consumers purchase more frequently.
    For example: Rice has greater importance than pencils in calculating the Cost of Living Index.
    Hence Weighted Index is more realistic.

    Q9. If the initial deposit is ₹50,000 and CRR is 30%, find the credit multiplier.

    A. 2.60
    B. 2.33
    C. 2.25
    D. 2

    Explanation

    Formula
    Credit Multiplier = 1 / CRR
    CRR = 30%
             = 30/100 
             = 0.30
    Multiplier = 1 ÷ 0.30
                     = 3.33
    However, in many university papers the expected answer is based on the credit creation multiplier (1 − CRR) / CRR:

    Hence the expected answer is B. 2.33.

    OR

    Formula
    The Credit Multiplier (Cm) is: Credit Multiplier = 1−CRR​​/    CRR 

    Calculation

    CRR = 30% = 0.30
    Cm = 1−0.30/​0.30
          = 0.70/0.30
          = 2.33

    Note: The initial deposit of ₹50,000 is not required to calculate the credit multiplier. It is needed only if the question asks for the total credit created.

    Q10. One of the following is NOT a function of money.

    A. Medium of Exchange
    B. Difference of Payment
    C. Measure of Value
    D. Store of Value

    Explanation
    Functions of Money:
    ✔ Medium of Exchange
    ✔ Measure of Value
    ✔ Store of Value
    ✔ Standard of Deferred Payments
    There is no function called Difference of Payment.

    Q11. As an objective of monetary policy, price stability is contradictory to the objective of

    A. Equity of income distribution
    B. Reduction of unemployment
    C. Removal of poverty
    D. Exchange rate stability

    Explanation
    Sometimes reducing unemployment requires expansionary monetary policy.
    Expansionary policy increases money supply.
    Too much money supply may increase inflation.
    Thus there is often a trade-off between:
    Price Stability
    Employment

    Q12. In ______ order to adjust liquidity in the economy the RBI principally uses one of the following policies.

    A. Income Policy
    B. Fiscal Policy
    C. Repo Rate Policy
    D. Selective Credit Control Policy

    Explanation
    Repo Rate is the main monetary policy instrument used by RBI to regulate liquidity.
    Higher Repo Rate
    → Less borrowing
    → Lower money supply
    Lower Repo Rate
    → More borrowing
    → Higher liquidity

    Q13. Match the Following

    I. Stanley Withers

    a. Conventional approach to money

    II. Milton Friedman

    b. Chicago approach to money

    II. Gurley and Shaw

    c. Weighted sum approach to money

    IV. Radcliffe Committee

    d. Central bank approach to money


    A. (I-a) (II-b) (III-c) (IV-d)
    B. (I-b) (II-a) (III-d) (IV-c)
    C. (I-a) (II-c) (III-b) (IV-d)
    D. (I-b) (II-a) (III-c) (IV-d)

    Q14. Read the following statements and choose the correct option.

    Statements
    I. Currency coins are produced and circulated by the Government of India.
    II. Currency coins are produced by the Government of India and circulated by RBI.

    A. I is false and II is not true
    B. I is true and II is not true
    C. I is not true and II is not false
    D. I is not false and II is false

    Explanation
    Coins are minted by the Government of India.
    They are put into circulation through RBI.
    Thus:
    Statement I → False
    Statement II → True

    Q15. One of the following is NOT a type of budget deficit.

    A. Revenue Deficit
    B. Fiscal Deficit
    C. Overhead Deficit
    D. Primary Deficit

    Explanation
    Recognized budget deficits are:
    Revenue Deficit
    Fiscal Deficit
    Primary Deficit
    There is no concept of "Overhead Deficit" in public finance.

    Q16. Over dependence on borrowing to meet deficit financing may lead the country to ______.

    A. Debt Trap
    B. Revenue Trap
    C. Financial Trap
    D. Deficit Trap

    Explanation
    If a government borrows continuously, it may eventually need new loans just to repay old loans and interest.
    This situation is called a Debt Trap.

    Q17. The commercial banks rush to purchase new securities and treasury bills because

    A. Securities are not always available
    B. Banks want to invest in low income
    C. Securities can enhance capital
    D. Banks will have to comply upon statutory requirements

    Explanation:

    Banks invest in Government Securities and Treasury Bills mainly to meet Statutory Liquidity Ratio (SLR) requirements prescribed by RBI.
    These investments are safe, liquid, and help banks comply with banking regulations.

    Q18. If we deduct the interest component from fiscal deficit, we will obtain ______.

    A. Primary Deficit
    B. Budget Deficit
    C. Fiscal Deficit
    D. Revenue Deficit

    Explanation:
    Formula: Primary Deficit = Fiscal Deficit − Interest Payments
    Primary deficit shows the current year's borrowing requirement excluding interest payments on previous debt.

    Q19. One of the following is not a source of non-tax revenue of the government.


    A. External Grants
    B. Profit of Public Sector Units
    C. Dividend of the Company
    D. Customs Duties

    Explanation
    Non-Tax Revenue includes:
    External grants
    Dividends
    Profits from Public Sector Undertakings (PSUs)
    Fees and fines
    Customs Duty is a tax revenue, not a non-tax revenue.

    Q20. Which of the following statements are not false with reference to the store of value function of money?
    Statements

    I. Production and consumption of goods and services are not instantaneous.
    II. Certainty of life.
    III. Accumulative nature of people.
    IV. Uncertainty of life.

    A. II, III and IV
    B. I, III and IV
    C. I, II and IV
    D. I, II and III

    Explanation
    The store of value function means money can be saved for future use.
    I Correct – Production and consumption happen at different times.
    II Incorrect – Life is not certain.
    III Correct – People like to accumulate wealth.
    IV Correct – Uncertainty encourages saving.

    Q21. Fisher's Equation of Quantity Theory is ______.

    A. Based on Liquidity Preference
    B. A Mathematical Truism
    C. Related to Wealth of Wealth Holders
    D. Related to Aggregate Savings

    Explanation
    Fisher's Equation:
    where:
    M = Money Supply
    V = Velocity of Money
    P = Price Level
    T = Volume of Transactions
    It is called a mathematical truism because it is an accounting identity.

    Q22. Which of the following statements is/are true?

    I. Increase in REPO Rate leads to increase in money supply.
    II. Increase in REPO Rate leads to decrease in money supply.
    III. Increase in REPO Rate leads to increase in interest rate.
    IV. Increase in REPO Rate represents Tight Money Policy.

    A. I and II
    B. I, II and III
    C. II, III and IV
    D. I and III

    Explanation
    When the RBI increases the Repo Rate:
    Borrowing becomes expensive.
    Banks lend less.
    Money supply decreases.
    Interest rates increase.
    This is called a Tight Money Policy.
    Therefore:
    I False
    II  True
    III True
    IV True

    Q23. The Bank Rate Policy will be effective if there is ______.

    A. Cordial relationship between banks and RBI
    B. Favorable economic environment
    C. Efficient banking system
    D. All of the above

    Explanation
    For Bank Rate Policy to work effectively:
    Banks should cooperate with RBI.
    The banking system should be efficient.
    Economic conditions should support policy transmission.
    All these factors are necessary.

    Q24. Which of the following are the basic limitations of commodity money?

    I. Heterogeneity
    II. Non-divisibility
    III. Enforceability
    IV. Difficult to store

    A. I, II and III
    B. I, III and IV
    C. II, III and IV
    D. I, II and IV

    Explanation
    Limitations of commodity money include:
    Lack of uniformity (heterogeneity)
    Difficulty in dividing
    Difficulty in storage
    Enforceability is not a limitation of commodity money.

    Q25. The formula to calculate the Credit Multiplier (Cm) is ______.

    A. Cm = (AID − AR) / AR
    B. Cm = ACC / A
    C. Cm = (1 − r) / r
    D. All of the above

    Explanation
    These are different forms used in textbooks to express the concept of the credit multiplier, depending on the notation adopted.
    The commonly used form is:
    Hence, the expected answer is All of the Above.

    Q26. According to Keynes, the following statement(s) are true.

    I. Transaction Demand and Precautionary Demand are known and already determined.
    II. The precautionary demand for money is volatile in nature.
    III. If the interest rate is expected to increase, the speculators would hold more idle cash.
    IV. Interest rate and bond prices are directly related.

    A. I, III, IV
    B. I, II, IV
    C. I, II, III, IV
    D. I, II, III

    Explanation
    I  Transaction and precautionary demand mainly depend on income and are generally predictable.
    II  Precautionary demand can vary depending on uncertainty.
    III  If interest rates are expected to rise (and bond prices are expected to fall), people prefer to hold cash.
    IV  Incorrect. Interest rates and bond prices are inversely, not directly, related.

    Q27. One of the following methods is used by the RBI to control the flow of credit in the economy towards desirable channels.

    A. Open Market Operation
    B. Bank Rate Policy
    C. Margin Requirements
    D. Variable Reserve Ratio

    Explanation
    The RBI uses Selective (Qualitative) Credit Control to direct credit to priority sectors.
    Margin Requirement is a selective credit control method.
    Quantitative methods include:
    Open Market Operation
    Bank Rate
    Variable Reserve Ratio (CRR/SLR)
    Therefore, the correct answer is C.

    Q28. One of the following is not an objective of Fiscal Policy.
     
    A. Exchange Rate Stability
    B. Equality of Income Distribution
    C. Price Stability
    D. High Economic Growth

    Explanation
    Objectives of Fiscal Policy include:
    Economic Growth
    Price Stability
    Employment
    Reduction of Income Inequality
    Exchange Rate Stability is mainly achieved through Monetary Policy and foreign exchange management, not fiscal policy.

    Q29. Which of the following is/are the source of money supply in India?

    A. RBI
    B. Commercial Banks
    C. Government of India
    D. All of the Above

    Explanation
    Money supply comes from:
    RBI (currency notes)
    Commercial Banks (credit creation)
    Government of India (coins and fiscal operations)
    Hence, All of the Above.

    Q30. Following statements are true about Government Expenditures.

    I. Government expenditures are autonomous in nature and independent in character.
    II. Government expenditure is induced in nature and depends upon the level of income.
    III. Irrespective of the nature of investment, government expenditure is an injection into the economy.

    A. II and III
    B. I and II
    C. I and III
    D. I, II and III

    Explanation
    Statement I  True
    Statement II  False (Government expenditure is generally autonomous, not induced.)
    Statement III True (Government spending injects income into the economy.)

    Therefore, the correct answer is C.

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    Wednesday, August 5, 2026

    50 Basic Government Exam MCQs with Answers & Solutions | SSC, UPSC, Railway, Banking (2026)

    August 05, 2026 0
    50 Basic Government Exam MCQs with Answers & Solutions | SSC, UPSC, Railway, Banking (2026)

    Practice 50 important Government Exam MCQs with detailed answers and explanations. Perfect for SSC, UPSC, Railway, Banking, Police, State PSC, and other competitive exams.



    50 Basic Government Exam MCQs with Answers & Solutions | SSC, UPSC, Railway, Banking (2026)

    1. Which is the largest planet in the Solar System?

    (a) Earth
    (b) Mars
    (c) Jupiter
     (d) Saturn

    Explanation: Jupiter is the largest planet in our solar system.

    2. The Constitution of India came into force on:

    (a) 15 August 1947
    (b) 26 January 1950
     (c) 26 November 1949
    (d) 2 October 1950

    Explanation: India became a Republic on 26 January 1950.

    3. The capital of Gujarat is:

    (a) Ahmedabad
    (b) Surat
    (c) Gandhinagar
     (d) Rajkot

    4. Who is known as the Father of the Indian Constitution?

    (a) Jawaharlal Nehru
    (b) Dr. B. R. Ambedkar
     (c) Mahatma Gandhi
    (d) Rajendra Prasad

    5. Which gas is most abundant in Earth's atmosphere?

    (a) Oxygen
    (b) Carbon Dioxide
    (c) Nitrogen
     (d) Hydrogen

    Explanation: Nitrogen makes up about 78% of the atmosphere.

    6. The national animal of India is:

    (a) Lion
    (b) Tiger
     (c) Elephant
    (d) Leopard

    7. Who wrote the National Anthem of India?

    (a) Bankim Chandra Chattopadhyay
    (b) Rabindranath Tagore
     (c) Sarojini Naidu
    (d) Subhas Chandra Bose

    8. 25 × 8 = ?

    (a) 180
    (b) 190
    (c) 200
     (d) 210

    9. Which is the longest river in India?

    (a) Yamuna
    (b) Godavari
    (c) Ganga
     (d) Krishna

    10. Who discovered gravity?

    (a) Newton
     (b) Galileo
    (c) Einstein
    (d) Edison

    11. Which article deals with Right to Equality?

    (a) Articles 14–18
     (b) Articles 19–22
    (c) Articles 25–28
    (d) Articles 32–35

    12. Currency of Japan is:

    (a) Dollar
    (b) Yen
     (c) Euro
    (d) Peso

    13. HCF of 24 and 36 is:

    (a) 6
    (b) 8
    (c) 10
    (d) 12

    14. Which vitamin is obtained from sunlight?

    (a) Vitamin A
    (b) Vitamin B
    (c) Vitamin C
    (d) Vitamin D

    15. The largest desert in India is:

    (a) Sahara
    (b) Gobi
    (c) Thar
     (d) Kalahari

    16. The first Prime Minister of India was:

    (a) Rajendra Prasad
    (b) Jawaharlal Nehru
     (c) Sardar Patel
    (d) Lal Bahadur Shastri

    17. Which is the smallest prime number?

    (a) 0
    (b) 1
    (c) 2
     (d) 3

    18. The headquarters of the United Nations is in:

    (a) Geneva
    (b) London
    (c) Paris
    (d) New York

    19. Which is the largest ocean?

    (a) Indian
    (b) Pacific
     (c) Atlantic
    (d) Arctic

    20. Which instrument measures earthquakes?

    (a) Thermometer
    (b) Seismograph
     (c) Hygrometer
    (d) Barometer

    21. 15% of 200 equals:

    (a) 20
    (b) 25
    (c) 30
     (d) 35

    22. Who invented the telephone?

    (a) Graham Bell
     (b) Edison
    (c) Newton
    (d) Tesla

    23. Which is India's national bird?

    (a) Peacock
     (b) Sparrow
    (c) Eagle
    (d) Crow

    24. The SI unit of force is:

    (a) Joule
    (b) Newton
     (c) Watt
    (d) Pascal

    25. Which state has the longest coastline in India?

    (a) Tamil Nadu
    (b) Gujarat
     (c) Maharashtra
    (d) Kerala

    26. 81 ÷ 9 = ?

    (a) 7
    (b) 8
    (c) 9
     (d) 10

    27. The Constitution was adopted on:

    (a) 26 Nov 1949
     (b) 15 Aug 1947
    (c) 26 Jan 1950
    (d) 1 Jan 1950

    28. Which planet is called the Red Planet?

    (a) Venus
    (b) Mars
     (c) Mercury
    (d) Saturn

    29. Largest democracy in the world:

    (a) USA
    (b) India
     (c) UK
    (d) Canada

    30. Which is India's national flower?

    (a) Rose
    (b) Lotus
     (c) Lily
    (d) Sunflower

    31. Square root of 144:

    (a) 10
    (b) 11
    (c) 12
     (d) 13

    32. Currency of the USA:

    (a) Dollar
     (b) Euro
    (c) Pound
    (d) Yen

    33. Which is the smallest state of India by area?

    (a) Goa
     (b) Sikkim
    (c) Tripura
    (d) Mizoram

    34. Which blood group is called the universal donor?

    (a) AB+
    (b) O−
     (c) A+
    (d) B−

    35. Who was the first President of India?

    (a) Nehru
    (b) Rajendra Prasad
     (c) Ambedkar
    (d) Gandhi    

    36. 18 × 12 = ?

    (a) 214
    (b) 216
     (c) 218
    (d) 220

    37. Which gas do plants absorb?

    (a) Oxygen
    (b) Nitrogen
    (c) Carbon Dioxide
     (d) Hydrogen

    38. The largest continent is:

    (a) Africa
    (b) Europe
    (c) Asia
     (d) Australia

    39. Which day is celebrated as Constitution Day?

    (a) 26 January
    (b) 15 August
    (c) 26 November
     (d) 2 October

    40. Who gave the slogan "Jai Jawan Jai Kisan"?

    (a) Nehru
    (b) Lal Bahadur Shastri
     (c) Gandhi
    (d) Patel

    41. Cube of 5 is:

    (a) 100
    (b) 110
    (c) 125
     (d) 150

    42. Which is the largest state by area?

    (a) Rajasthan
     (b) Gujarat
    (c) Maharashtra
    (d) Madhya Pradesh

    43. The headquarters of ISRO is located in:

    (a) Hyderabad
    (b) Bengaluru
     (c) Chennai
    (d) Mumbai

    44. Who is known as the Iron Man of India?

    (a) Gandhi
    (b) Sardar Vallabhbhai Patel
     (c) Nehru
    (d) Ambedkar

    45. Which river is known as the Sorrow of Bihar?

    (a) Ganga
    (b) Kosi
     (c) Yamuna
    (d) Godavari

    46. The SI unit of power is:

    (a) Watt
     (b) Volt
    (c) Ampere
    (d) Newton

    47. 7² = ?

    (a) 42
    (b) 47
    (c) 49
     (d) 52

    48. Which is the highest mountain peak in the world?

    (a) Kanchenjunga
    (b) Mount Everest
     (c) K2
    (d) Nanda Devi

    49. The Indian Parliament consists of:

    (a) Lok Sabha only
    (b) Rajya Sabha only
    (c) President, Lok Sabha and Rajya Sabha
     (d) Prime Minister and Lok Sabha

    Explanation: Parliament comprises the President, the Lok Sabha (House of the People), and the Rajya Sabha (Council of States).

    50. Which Fundamental Duty was added by the 86th Constitutional Amendment?

    (a) Protect the environment
    (b) Develop scientific temper
    (c) Provide opportunities for education to children aged 6–14 years
     (d) Safeguard public property

    Explanation: The 86th Constitutional Amendment added the duty of parents or guardians to provide educational opportunities to children between 6 and 14 years of age.

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    Tuesday, August 4, 2026

    MACRO ECONOMIC ISSUES AND POLICIES (MEIP) MCQS

    August 04, 2026 0
    MACRO ECONOMIC ISSUES AND POLICIES (MEIP) MCQS
     S.Y B.COM
    SEMESTER - 4

    MACRO ECONOMIC ISSUES AND POLICIES

    MACRO ECONOMIC ISSUES AND POLICIES
    (MEIP)
    MCQS

    🎓 Introduction

    Enhance your preparation for the S.Y. B.Com Semester 4 examination in Macro Economic Issues and Policies (MEIP) with comprehensive and clearly explained Multiple Choice Questions (MCQs).

    1. Money includes

    (a) Currencies and demand deposits
     (b) Bonds, government securities
    (c) Equity shares
    (d) All of the above

    Explanation: Money is anything that is generally accepted as a medium of exchange. It is used to buy goods and services and to make payments.
    Currency (notes and coins) and demand deposits (money in savings/current accounts that can be withdrawn anytime) are called money because they are directly accepted in transactions.

    Why is Answer (a) Correct? 
    Currency is legal tender.
    Demand deposits can be used through cheques, UPI, debit cards, etc.
    Both are immediately available for payment.

    Exam Tip
    M1 = C + DD
    C = Currency
    DD = Demand Deposits
    Money = Currency + Demand Deposits

    2. One of the following is perfect example of near money

    (a) Bonds and debentures
     (b) Equity shares of ITC Company
    (c) Gold
    (d) Bills of exchange

    Explanation: Near money refers to financial assets that are not money themselves but can be converted into cash quickly with little loss in value.
    Examples include: Bonds
    Debentures
    Treasury Bills
    Fixed Deposits 

    Why is Answer (a) Correct?
    Bonds and debentures can be sold in the financial market and converted into cash with relatively little difficulty.

    Exam Tip
    Near Money = BTFG
    B → Bonds
    T → Treasury Bills
    F → Fixed Deposits
    G → Government Securities
    Remember: "BTFG = Near Money"

    3. Which one of the following is not an example of near money?

    (a) Bills of exchange
    (b) Bonds and debentures
    (c) Equity shares of a public limited company
     (d) Treasury bills of the Government of India

    Explanation: Near money consists of financial assets that are highly liquid and can be converted into cash easily.
    Treasury Bills, Bonds, Debentures and Bills of Exchange are all considered near money.
    Equity shares are not near money because their prices change frequently and they involve higher risk.

    Why is Answer (c) Correct?
    Shares do not have stable value and cannot be treated like cash.

    Exam Tip
    Near Money = BBTG
    B → Bills of Exchange
    B → Bonds & Debentures
    T → Treasury Bills
    G → Government Securities

    Equity Shares = Investment, NOT Near Money

    4. Which of the following statements is/are true?

    (i) M1 = Currency with public + Demand deposits with banks
    (ii) M2 = M1 + Post Office saving deposits
    (iii) M3 = M1 + Time deposits with banks
    (iv) M4 = M3 + All Post Office deposits

    (a) Only (i) above
    (b) Both (i) and (iv) are correct
    (c) Both (ii) and (iii) are correct
    (d) All of the above

    Explanation:
    These are the official measures of money supply in India:

    M1 = Currency with Public + Demand Deposits + Other Deposits with RBI
    M2 = M1 + Post Office Savings Deposits
    M3 = M1 + Time Deposits with Banks
    M4 = M3 + All Post Office Deposits 

    Why is Answer (d) Correct?
    Each statement correctly describes a standard money supply measure.

    Exam Tip
    Remember the order: 
    • M1 → Narrow Money
    • M2 → M1 + PO Savings
    • M3 → M1 + Time Deposits
    • M4 → M3 + All PO Deposits
    5. M1 in the money stock in India refers to

    (a) Post Office savings deposits
    (b) Currency plus demand deposits plus other deposits with RBI
    (c) Total Post Office Deposits
    (d) Time deposits with banks

    Explanation:
    M1 is called Narrow Money because it includes the most liquid forms of money.
    Formula:
    M1 = Currency with Public + Demand Deposits with Banks + Other Deposits with RBI

    Why is Answer (b) Correct?
    It is the official definition of M1 used in India.

    Exam Tip
    M1 = Narrow Money (Most Liquid Money)

    6. What is the basic difference between money stock measures M3 and M4?

    (a) M3 is more than M4
    (b) M3 is a part of M1 but M4 is not part of M1
    (c) M4 includes all Post Office deposits but they are not included in M3
    (d) M1 is a part of M1 and M1 is not part of M3

    Explanation:
    M3 (Broad Money)     includes:
    • Currency with the public
    • Demand deposits with banks
    • Other deposits with RBI
    • Time deposits with banks 
    M4 includes everything in M3 plus all Post Office deposits (except National Savings Certificates).
    Therefore, the main difference is the inclusion of Post Office deposits in M4.

    Why is Answer (c) Correct?
    M4 is broader than M3 because it includes all eligible Post Office deposits.

    Exam Tip
    M4 = M3 + All Post Office Deposits

    7. The basic point of distinction between narrow and broad money is the treatment of ______

    (a) Post office deposits
    (b) Time deposits with banks
    (c) Savings deposits of bank
    (d) Currency

    Explanation:
    Narrow Money (M1)     contains only highly liquid money.
    Broad Money (M3) adds time deposits with banks.
    Therefore, time deposits are the main distinguishing feature.

    Why is Answer (b) Correct?
    Time deposits are included in Broad Money but excluded from Narrow Money.

    Exam Tip
    Broad Money = Narrow Money + Time Deposits

    8. Time deposits with banks are included in ______ measure of money stock.

    (a) M1
    (b) M3
    (c) M4
    (d) Both in (b) and (c)

    Explanation:
    Time deposits are first included in M3.
    Since M4 = M3 + Post Office Deposits, M4 also contains time deposits.

    Why is Answer (d) Correct?
    Both M3 and M4 include time deposits with banks.

    Exam Tip
    Remember: 
    • M1 → No Time Deposits
    • M3 → Yes
    • M4 → Yes
    9. Money is

    (a) Constant in purchasing power
    (b) Acceptable only when it has intrinsic value
    (c) The most liquid of all assets
    (d) All of the above

    Explanation:
    Liquidity means how quickly an asset can be used to make payments.
    Money is perfectly liquid because it can immediately buy goods and services.

    Why is Answer (c) Correct?
    Money requires no conversion before use.

    Exam Tip
    Money = Highest Liquidity

    10. According to ______ money is what money does.

    (a) Crowther
    (b) Walker
    (c) Burstein
    (d) Keynes

    Explanation:
    Economist Walker explained money by emphasizing its functions rather than its physical form.
    His famous statement is:
    "Money is what money does."
    This means anything performing the functions of money can be considered money.

    Why is Answer (b) Correct?
    Walker focused on the functional definition of money.

    Exam Tip
    Walker = "Money is what money does."

    11. Anything that serves as money possesses the essential characteristic that it must ______

    (a) Be generally acceptable
    (b) Be issued by the State Government
    (c) Have inherited value
    (d) Not be wholly fiduciary

    Explanation:
    The most important feature of money is general acceptability. People must be willing to accept it in exchange for goods and services. Without general acceptance, money cannot perform its basic functions.

    Why is Answer (a) Correct?
    Money is useful only when everyone accepts it as payment.

    Exam Tip
    The first quality of money = General Acceptability.

    12. The chief function of money is that it acts as ______

    (a) Providing liquidity
    (b) A medium of exchange
    (c) A resource for credit creation
    (d) None of these

    Explanation:
    • Money performs many functions: Medium of Exchange
    • Measure of Value
    • Store of Value
    • Standard of Deferred Payments 
    Among these, the primary (chief) function is acting as a medium of exchange.

    Why is Answer (b) Correct?
    Money removes the problem of barter by making buying and selling easy.

    Exam Tip
    Chief Function = Medium of Exchange

    13. Money in traditional sense serves as ______

    (a) A medium of exchange
    (b) A store of value
    (c) Both medium of exchanged and store of value
    (d) Neither medium of exchange or store of value

    Explanation:
    In the traditional sense, money was introduced mainly to facilitate the exchange of goods and services. Before money existed, people used the barter system, where goods were exchanged directly for other goods.
    The barter system had many problems, such as: 
    • Double coincidence of wants
    • Difficulty in measuring value
    • Difficulty in storing wealth
    • Difficulty in making future payments 
    To solve these problems, money was introduced. Therefore, its original and primary purpose was to act as a medium of exchange.
    Although money also performs the function of storing value, this is considered a secondary function, not its traditional or primary role.
    Money was first created to make buying and selling easier. It replaced the barter system by serving as a medium of exchange.

    Why is Option (a) Correct?
    Money was originally created to make the exchange of goods and services easier. Hence, Medium of Exchange is the traditional function of money.

    Exam Tip
    Traditional Money = Trade = Medium of Exchange
    Remember:
    Barter System → Money → Medium of Exchange

    14. In modern economy, the major primary function of money is that it serves as ______.

    (a) A store of value
    (b) A transfer of value
    (c) A medium of exchange
     (d) A speculation instrument

    Explanation:
    The primary function of money is to act as a medium of exchange. It eliminates the difficulties of the barter system by allowing people to buy and sell goods and services easily.
    Example:
    Instead of exchanging wheat for rice, you simply pay money to buy rice.

    Why is (c) Correct?
    Money is accepted by everyone for making payments, making trade faster and easier.

    Exam Tip
    Primary Function of Money = Medium of Exchange

    15. When a debtor promises to pay the amount in future to the creditor, money serves as ______.

    (a) A store of value
    (b) A transfer of value
    (c) A medium of exchange
    (d) A standard for deferred payments

    Explanation:
    Money helps in making future payments. Loans, EMIs, salaries, rent, and insurance premiums are all examples where payments are made in the future.

    Why is (d) Correct?
    Money acts as a common standard for future obligations.

    Exam Tip
    Deferred = Future Payment
    Remember:
    Loan = Standard of Deferred Payment

    16. Which is the most liquid measure of money supply?

    (a) M1
     (b) M2
    (c) M3
    (d) M4

    Explanation:
    Liquidity means how quickly money can be used.
    M1 contains: 
    • Currency
    • Demand Deposits
    • Other Deposits with RBI 
    These are immediately available.

    Why is (a) Correct?
    M1 is called Narrow Money and is the most liquid measure of money supply.

    Exam Tip
    Highest Liquidity = M1

    17. The concept of narrow money refers to ______.

    (a) M1
     (b) M2
    (c) M3
    (d) M4

    Explanation
    Narrow Money includes only the most liquid forms of money.
    Formula:
    M1 = Currency + Demand Deposits + Other Deposits with RBI

    Why is (a) Correct?
    M1 contains money that is readily available for spending.

    Exam Tip
    Narrow Money = M1

    18. The concept of broad money refers to ______.

    (a) M1
    (b) M2
    (c) M3
     (d) M4

    Explanation:
    Broad Money includes: 
    • M1
    • Time Deposits with Banks 
    Formula:
    M3 = M1 + Time Deposits
    It is the most commonly used measure of money supply in India.

    Why is (c) Correct?
    M3 measures a wider money supply than M1 by including time deposits.

    Exam Tip
    Remember:
    • M1 = Narrow Money
    • M3 = Broad Money
    • M4 = Broad Money + Post Office Deposits
    19. What will cause interest rates to rise?

    (a) The rise in general level of prices
    (b) The rise in standard of living
    (c) The increase in demand for money
     (d) The increase in money supply

    Explanation:
    Interest rate is the price of borrowing money. When more people want to borrow money, the demand for money increases. If the supply of money remains the same, banks charge a higher interest rate.
    Example:
     Many people apply for home loans at the same time. Banks have limited funds, so loan interest rates may increase.

    Why is (c) Correct?
    More demand for money → Higher interest rate.

    Exam Tip
    Demand ↑ = Interest Rate ↑
    Money Supply ↑ = Interest Rate ↓

    20. The least profitable asset that the commercial banks possess is ______.

    (a) Cash in hand
     (b) Money at call
    (c) Bills discounted
    (d) Loans and advances

    Explanation:
    Banks earn profits mainly from loans and investments.
    Cash kept in the bank's vault earns no interest, so it is the least profitable asset.

    Why is (a) Correct?
    Cash provides liquidity but does not generate income.

    Exam Tip
    Cash = Safest Asset + Least Profitable Asset

    21. The most liquid asset, next to cash, possessed by the banks is ______.

    (a) Advances to customers
    (b) Money at call
     (c) Treasury bills
    (d) Inland bills

    Explanation
    Money at call (call money) can be recovered within 24 hours or on demand. Therefore, it is the most liquid asset after cash.

    Why is (b) Correct?
    Banks can quickly convert call money into cash whenever required.

    Exam Tip
    Liquidity Order:
    Cash → Call Money → Treasury Bills → Loans

    22. Maintaining a cash reserve ratio of 20% with primary deposits of Rs. 1,000, the total derivative deposits created by banks would be ______.

    (a) Rs. 2,500
    (b) Rs. 5,000
    (c) Rs. 4,000
     (d) Rs. 1,200

    Explanation
    Formula:
    Credit Multiplier = 1 / CRR
    CRR = 20% = 0.20
    Credit Multiplier = 1 ÷ 0.20 = 5
    Total Deposits = ₹1,000 × 5 = ₹5,000
    Derivative (Secondary) Deposits = Total Deposits − Primary Deposit
    = ₹5,000 − ₹1,000
    = ₹4,000

    Why is (c) Correct?
    The question asks for derivative deposits, not total deposits.

    Exam Tip
    Remember:
    • Total Deposit = Primary Deposit × Multiplier
    • Derivative Deposit = Total Deposit − Primary Deposit
    23. If the banking system has reserves of Rs. 500 crore and the reserve requirement is 20%, to what extent can the system support demand deposits?

    (a) Rs. 5,000 crore
    (b) Rs. 2,000 crore
    (c) Rs. 10,000 crore
    (d) Rs. 2,500 crore

    Explanation:
    Formula:
    Demand Deposits = Reserves ÷ CRR
    = ₹500 crore ÷ 0.20
    = ₹2,500 crore

    Why is (d) Correct?
    Banks can support demand deposits equal to five times their reserves when CRR is 20%.

    Exam Tip
    Demand Deposits = Reserves ÷ CRR
    Example:
    CRR = 20%
    Reserve = ₹500 crore
    Demand Deposit = ₹500 ÷ 0.20 = ₹2,500 crore

    24. When the commercial banks create credit they are actually increasing ______.

    (a) The national debt
    (b) The supply of money
     (c) The purchasing power of the rupee
    (d) The real wealth of the country

    Explanation
    Commercial banks create credit by giving loans. Instead of giving cash, banks credit the loan amount to the customer's account. This increases bank deposits, which are a part of the money supply.
    For example: 
    • A bank gives a loan of ₹5 lakh.
    • The amount is credited to the customer's account.
    • The customer can now use this money for payments.
    • Thus, the money supply increases. 
    Why is (b) Correct?
    Credit creation increases deposits in the banking system, which increases the money supply.

    Exam Tip
    Commercial Banks Create Credit = Increase Money Supply

    25. Commercial bank is an institution ______.

    (a) Dealing in securities
    (b) Providing credit
     (c) Helping farmers and small industrialists
    (d) Providing money to the government

    Explanation:
    A commercial bank accepts deposits and provides loans and advances to individuals and businesses. Providing credit is its main function.
    Examples: 
    • Home Loans
    • Education Loans
    • Business Loans
    • Vehicle Loans 
    Why is (b) Correct?
    The primary function of a commercial bank is to provide credit to the economy.

    Exam Tip
    Commercial Bank = Accept Deposits + Provide Credit

    26. Banks perform the function of ______.

    (a) Receiving deposits
    (b) Lending money
    (c) Agency services
    (d) All of the above

    Explanation:
    Commercial banks perform several important functions:
    Primary Functions 
    • Accepting deposits
    • Lending money 
    Secondary Functions 
    • Agency services (collecting cheques, paying bills, fund transfer)
    • Utility services (locker facility, ATM, internet banking) 
    Why is (d) Correct?
    Banks perform all these functions, making option (d) the correct answer.

    Exam Tip
    Remember the three major functions: 
    • Accept Deposits
    • Give Loans
    • Agency Services 
    27. Agency functions are ______.

    (a) Carried out by the Reserve Bank of India
    (b) Carried out by the commercial banks
    (c) Not carried out by the commercial bank
    (d) Carried out by the government of india

    Explanation:
    Agency functions     are services that commercial banks perform on behalf of their customers. In these functions, the bank acts as an agent for the customer and carries out various financial transactions.
    Some common agency functions are: 
    • Collection of cheques, bills and dividends
    • Payment of electricity, water and telephone bills
    • Payment of insurance premiums
    • Collection of interest and dividends
    • Purchase and sale of shares and securities
    • Fund transfer services
    • Standing instructions (e.g., monthly EMI or SIP payments) 
    Since these services are provided by commercial banks, the correct answer is Option (b).

    Why is Option (b) Correct?
    Commercial banks act as agents for their customers and perform financial services on their behalf. Therefore, agency functions are carried out by commercial banks.

    Exam Tip
    "ABC Rule"
    A → Agency Functions
    B → Bank (Commercial Bank)
    C → Customer
    Agency Functions = Commercial Bank works on behalf of the Customer.

    28. Which of the following is NOT a function of the commercial bank?

    (a) The provision of safe deposit facilities
    (b) The provision of a cheque system
    (c) Lending loans to private firms
    (d) Acting as a lender of last resort

    Explanation:
    Commercial banks perform several important functions such as accepting deposits, providing loans, cheque facilities, locker (safe deposit) facilities, and agency services.
    However, acting as the "Lender of Last Resort" is the function of the Reserve Bank of India (RBI), not commercial banks.
    The RBI provides emergency financial assistance to commercial banks when they face a shortage of funds.

    Why is Option (d) Correct?
    The RBI is known as the Lender of Last Resort because it lends money to commercial banks during financial emergencies.

    Exam Tips
    • Commercial Bank: Deposits, Loans, Locker, Cheques
    • RBI: Currency Issue, Monetary Policy, Lender of Last Resort
    29.Which of the following is NOT a function of the Central Bank?

    (a) Credit control
    (b) Credit creation
    (c) Exchange control
    (d) Government Bank

    Explanation:
    The Central Bank (RBI) controls the country's money supply and regulates the banking system. Its functions include: 
    • Credit Control
    • Exchange Control
    • Banker to the Government
    • Banker's Bank
    • Currency Issue 
    Credit creation is mainly done by commercial banks by giving loans and advances.

    Why is Option (b) Correct?
    Commercial banks create credit by granting loans, whereas the RBI controls the amount of credit in the economy.

    Exam Tips
    Remember this comparison:

    Commercial Banks              Central Bank (RBI)
    Creates Credit                        Controls Credit
    Accepts Public Deposits        Does not accept deposits from the general public
    Provides Loans                      Regulates Banks
    Customer Banking                Monetary Policy

    30.The Central Bank does NOT perform the function of ______.

    (a) The banker to the Government
    (b) Accepting deposits from commercial banks
    (c) Accepting deposits from the general public
    (d) Acting as a clearing house

    Explanation:
    The Reserve Bank of India (RBI) is the Central Bank of India.
    It performs important functions such as: 
    • Banker to the Government
    • Banker's Bank
    • Accepting deposits from commercial banks
    • Acting as a clearing house
    • Issuing currency
    • Controlling credit 
    However, it does not accept deposits from the general public. This function is performed by commercial banks like SBI, HDFC Bank, ICICI Bank, etc.

    Why is Option (c) Correct?
    The RBI deals mainly with the Government and commercial banks, not with individual customers. People open savings and current accounts in commercial banks, not in the RBI.

    Exam Tips
    "RBI = Bank of Banks, Not Bank of People"
    • General Public → Commercial Banks
    • Commercial Banks → RBI

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