Question:medium

In this era of global capital flows, so much money is now flowing through the world that no single country can fight inflation effectively by tightening its monetary policy.
If the above is true, which of the following could be most logically concluded?

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A single-tool failure (monetary policy failing to beat inflation) is itself evidence of limited economic control; look for the option that states this directly.
Updated On: Jul 10, 2026
  • Changes in the cash reserve ratio by the Reserve Bank of India will control the rate of inflation in India.
  • Countries' finance ministers have sufficient control over their respective economies.
  • Countries' finance ministers have insufficient control over their respective economies.
  • Inflation does not matter as long as incomes increase.
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The Correct Option is C

Solution and Explanation

Treat this as a strict "must follow" question: pick only the option that the given fact forces to be true, nothing extra. The fact given is that global money flows have grown so large that no country's monetary policy alone can beat inflation.

  1. Option A: Claims a specific tool (CRR changes by RBI) will control inflation in India. This directly contradicts the passage, which says monetary policy tightening cannot do this effectively anymore.
  2. Option B: Claims finance ministers still have enough grip on their economies. But losing the ability to control inflation through monetary policy is itself a loss of control, so this cannot be concluded.
  3. Option C: If the main lever (monetary policy) cannot manage a key economic outcome (inflation), then economic control is incomplete. This is a safe, direct restatement of the passage's implication in different words.
  4. Option D: Introduces a brand new idea (that rising incomes offset the importance of inflation), which the passage never mentions or implies.

Testing each option against the passage this way leaves only option C standing as a fair restatement of what must be true.

Let's summarize:

  • A "most logically concluded" question needs an option that adds nothing beyond the given fact.
  • Losing control over inflation through monetary policy means losing part of overall economic control, option C.
  • Options A and B fight the premise, and option D is unrelated.

The answer is option C.

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