SSC CGL 2024 Tier-I · 17 September 2024, Shift 1 · General Awareness · Question 2 of 98

Text as printed on a candidate's response sheet for this shift; answer per SSC's tentative key as marked on that sheet. Solution last reviewed 6 September 2026.

Where this paper and its answers come from

SSC does not publish CGL question papers or a public answer key. The questions and options here are reproduced as printed on a candidate's own response sheet for this shift — the Commission's text, unchanged. Each answer is SSC's tentative key as marked on that sheet; SSC allowed challenges to it and never publishes a final key. The solutions are written by UnlockIAS.

If GNP is 16% higher than the last year and the rate of inflation is 9%, production in the economy has grown by:

(a)5%
(b)7%
(c)4%
(d)6%

Answer

Why

Correct — B. 'Production in the economy' means real output, so strip the price rise out of the value figure.

Nominal GNP growth = 16%
Inflation = 9%
Real growth = 16 − 9 = 7%

The 16% mixes two things: more goods produced, and each good costing more. Removing the 9% price component leaves the part that is genuinely extra output.

Why the others are wrong

(a)
5% — 5% needs an inflation rate of 11%. The stem prints 9%, and nothing in it licenses changing that figure.
(c)
4% — 4% comes from subtracting 9 from a nominal figure of 13. The stem says GNP is 16% higher, so the subtraction starts at 16.
(d)
6% — 6% is the trap for the over-precise. Exact deflation gives about 6.4%, which rounds this way, but the relation SSC is testing is the standard approximation, nominal minus inflation.

Concept

Any income aggregate can be measured at current prices (nominal) or at constant prices (real).

A nominal figure can rise for two unrelated reasons: more physical goods were made, and each good sold dearer. Only the first is growth in production.

Inflation measures the second. Take it out and what remains is the change in real output, which is what the question asks for. The formal instrument is the GNP deflator, the ratio of nominal to real output.

Exact deflation gives 1.16 ⁄ 1.09 − 1 ≈ 6.4%. That is nearer option (d)'s 6% than it is to 7%, and it is why (d) is on the list.

SSC is testing the textbook approximation, real growth ≈ nominal growth − inflation, so subtract and take 7%.

Key facts

Real growth is approximated by nominal growth minus the rate of inflation.
Nominal output is measured at current prices and real output at constant prices.
The GNP deflator is the ratio of nominal GNP to real GNP, multiplied by 100.
National income in Indian usage is NNP at factor cost.

Study next

GDP deflator compared with the Consumer Price Index as a measure of inflationNational income aggregates: GDP, GNP, NNP and national income at factor costNominal and real interest rates and the Fisher relation

Common traps

Adding the two rates instead of subtracting gives 25%, so check the direction before computing.
Reaching for exact deflation gives about 6.4% and pushes you onto option (d).

The same nominal-versus-real distinction turns up as a definition rather than a sum.

Which aggregate equals national income is asked on 24 Sep 2024, 16:00, GA Q.8, and which pair of terms do NOT mean the same thing, where the answer is real GDP and the GDP deflator, on 26 Sep 2024, 16:00, GA Q.13.

Related PYQs

No directly related past PYQ was found.