IBPS Clerk – IBPS Clerk Mains 2016, Test - 2

Question 1

Read the following passage carefully and certain words in the passage are printed in bold letters to help you locate them easily while answering some of these questions.

The Indian economy is currently passing through a phase of relatively slow growth. However, this should not cloud the fact that over the nine-year period beginning 2005-06, the average annual growth rate was 7.7 per cent. Against this background, the relevant question is whether India has the capability to grow at 8 to 9 per cent in a sustained way. In short, what is the potential rate of growth of India?

Normally, potential growth is measured using trends with some filters. In one sense, these are backward-looking measures, since they depend on historically observed data. In the case of measuring capacity utilisation in manufacturing, the maximum capacity is very often taken as the maximum output achieved in the recent period. Perhaps, in the case of determining the potential rate of growth of the economy also, one can take the maximum growth rate achieved in the recent past as the lowest estimate of the potential. However, this assumption will be valid only if there is reason to believe that the maximum growth rate achieved in the recent past was not a one-off event and that the growth rate achieved was robust and replicable.

India achieved a growth rate of 9.5 per cent in 2005-06, followed by 9.6 per cent and 9.3 per cent in the subsequent two years. After declining a bit in the wake of international financial crisis, the growth rate went back to 8.9 per cent in 2010-11. In many ways the growth rate achieved in the high phase period of 2005- 06 to 2007-08 was robust. The domestic savings rate during this period averaged 34.9 per cent of GDP. Similarly, the gross capital formation rate averaged 36.2 per cent. The current account deficit (CAD) remained low with an average of 1.2 per cent of GDP. Agricultural growth during this period averaged 5 per cent, and the annual manufacturing growth rate was 11 per cent. The capital flows were large but as the CAD remained low, the accretion to reserves amounted to $144 billion. Inflation during the period averaged 5.2 per cent. The combined fiscal deficit of the Centre and States was 5.2 per cent of GDP, well below the stipulated 6 per cent. Thus on many dimensions the growth rate was robust.

Unlike in the 1980s when the pick-up in growth was accompanied by deterioration in fiscal deficit and current account, the sharp increase in growth between 2005-06 and 2007-08 happened with the stability parameters at desired levels. Also, a booming external environment provided good support.

To assess whether the high growth phase can be replicated, we need to understand the factors that led to the slowdown since 2011-12. Complicating the analysis of this period is the revision of national income numbers with a new base. The two sets of numbers present a somewhat differing picture. According to the earlier series, the growth rate of the Indian economy fell below 5 per cent in 2012-13 and 2013-14. But the new series shows a decline below 5 per cent only in 2012-For 2013-14, the new series records a growth rate of 6.6 per cent, as against 4.7 per cent according to the earlier estimate. For 2014-15 and 2015-16, there is only one set of numbers, that is, according to the new series. For both the years the growth rate is above 7 per cent. These are good growth rates under any circumstance, let alone the current global situation. Anyway, we have come down from the growth rate of 9-plus per cent which we had seen earlier.Three sets of reasons are attributed for the slowdown. First, the external environment had deteriorated sharply. The recovery from the crisis of 2008 was tepid. One country after another in the developed world came under pressure. Strangely, however, international commodity prices including crude oil prices remained high until a couple of years ago. All this had an adverse impact on developing countries, including India. However, it would be wrong to attribute the slowdown in India primarily to external factors. The domestic factors are the key. Second, there were severe supply bottlenecks. Agricultural production fell sharply in 2009-10 because of a severe drought. This triggered an inflation which lasted for several years thereafter. Coal output fell. Iron ore output fell, partly because of court decisions. The third set of reasons is basically non-economic which led collectively to a weakening of investment. A multitude of issues relating to scams and perceived delays in decision- making created an element of uncertainty in the minds of investors. New investments began to fall.

The rise in investment rate must be supported by a rise in the domestic saving rate. An increase in investment rate supported by a widening current account deficit is not sustainable and is fraught with serious consequences. Only a current account deficit in the region of 1 to 1.5 per cent is sustainable. Incremental capital output ratio is a catch-all variable which is influenced by a host of factors. Obviously, it depends on technology. It also depends upon the skill of the labour force which in turn depends on the quality of the education system. Another catch-all expression "ease of doing business" is also relevant (i.e.) bureaucratic hurdles which impede speedy execution of projects need to be removed. Thus improving the productivity of capital needs action on several fronts.

Making a prediction about the future is always hazardous. Many things can go wrong. The Indian economy in the recent past has shown that it has the resilience to grow at 8 to 9 per cent. Therefore achieving the required investment rate to support such a high growth is very much in the realm of possibility. However, we need to overcome the current phase of declining investment rate. Investment sentiment is influenced by non-economic factors as well. An environment of political and social cohesion is imperative. Equally, we can get the incremental capital- output ratio (ICOR) to a lower level. Raising the productivity of capital will require policy reforms including administrative reforms as well as firm-level improvements. The "potential" to grow at 8 to 9 per cent at least for a decade exists. We have to make it happen.

(The topic of the Passage asked in the exam was based on the economic changes in the last 50 years) In context of the given passage, which of the following is/are the reason for economic slowdown of India?

Accepted Answer

Domestic barriers like draught, inflation etc.

Answer

Jaunty recovery from the crisis of 2008

Answer

Court's verdict to stop production of coal

Answer

Various barriers introduced by the government.

Question 2

Read the following passage carefully and certain words in the passage are printed in bold letters to help you locate them easily while answering some of these questions.

The Indian economy is currently passing through a phase of relatively slow growth. However, this should not cloud the fact that over the nine-year period beginning 2005-06, the average annual growth rate was 7.7 per cent. Against this background, the relevant question is whether India has the capability to grow at 8 to 9 per cent in a sustained way. In short, what is the potential rate of growth of India?

Normally, potential growth is measured using trends with some filters. In one sense, these are backward-looking measures, since they depend on historically observed data. In the case of measuring capacity utilisation in manufacturing, the maximum capacity is very often taken as the maximum output achieved in the recent period. Perhaps, in the case of determining the potential rate of growth of the economy also, one can take the maximum growth rate achieved in the recent past as the lowest estimate of the potential. However, this assumption will be valid only if there is reason to believe that the maximum growth rate achieved in the recent past was not a one-off event and that the growth rate achieved was robust and replicable.

India achieved a growth rate of 9.5 per cent in 2005-06, followed by 9.6 per cent and 9.3 per cent in the subsequent two years. After declining a bit in the wake of international financial crisis, the growth rate went back to 8.9 per cent in 2010-11. In many ways the growth rate achieved in the high phase period of 2005- 06 to 2007-08 was robust. The domestic savings rate during this period averaged 34.9 per cent of GDP. Similarly, the gross capital formation rate averaged 36.2 per cent. The current account deficit (CAD) remained low with an average of 1.2 per cent of GDP. Agricultural growth during this period averaged 5 per cent, and the annual manufacturing growth rate was 11 per cent. The capital flows were large but as the CAD remained low, the accretion to reserves amounted to $144 billion. Inflation during the period averaged 5.2 per cent. The combined fiscal deficit of the Centre and States was 5.2 per cent of GDP, well below the stipulated 6 per cent. Thus on many dimensions the growth rate was robust.

Unlike in the 1980s when the pick-up in growth was accompanied by deterioration in fiscal deficit and current account, the sharp increase in growth between 2005-06 and 2007-08 happened with the stability parameters at desired levels. Also, a booming external environment provided good support.

To assess whether the high growth phase can be replicated, we need to understand the factors that led to the slowdown since 2011-12. Complicating the analysis of this period is the revision of national income numbers with a new base. The two sets of numbers present a somewhat differing picture. According to the earlier series, the growth rate of the Indian economy fell below 5 per cent in 2012-13 and 2013-14. But the new series shows a decline below 5 per cent only in 2012-For 2013-14, the new series records a growth rate of 6.6 per cent, as against 4.7 per cent according to the earlier estimate. For 2014-15 and 2015-16, there is only one set of numbers, that is, according to the new series. For both the years the growth rate is above 7 per cent. These are good growth rates under any circumstance, let alone the current global situation. Anyway, we have come down from the growth rate of 9-plus per cent which we had seen earlier.Three sets of reasons are attributed for the slowdown. First, the external environment had deteriorated sharply. The recovery from the crisis of 2008 was tepid. One country after another in the developed world came under pressure. Strangely, however, international commodity prices including crude oil prices remained high until a couple of years ago. All this had an adverse impact on developing countries, including India. However, it would be wrong to attribute the slowdown in India primarily to external factors. The domestic factors are the key. Second, there were severe supply bottlenecks. Agricultural production fell sharply in 2009-10 because of a severe drought. This triggered an inflation which lasted for several years thereafter. Coal output fell. Iron ore output fell, partly because of court decisions. The third set of reasons is basically non-economic which led collectively to a weakening of investment. A multitude of issues relating to scams and perceived delays in decision- making created an element of uncertainty in the minds of investors. New investments began to fall.

The rise in investment rate must be supported by a rise in the domestic saving rate. An increase in investment rate supported by a widening current account deficit is not sustainable and is fraught with serious consequences. Only a current account deficit in the region of 1 to 1.5 per cent is sustainable. Incremental capital output ratio is a catch-all variable which is influenced by a host of factors. Obviously, it depends on technology. It also depends upon the skill of the labour force which in turn depends on the quality of the education system. Another catch-all expression "ease of doing business" is also relevant (i.e.) bureaucratic hurdles which impede speedy execution of projects need to be removed. Thus improving the productivity of capital needs action on several fronts.

Making a prediction about the future is always hazardous. Many things can go wrong. The Indian economy in the recent past has shown that it has the resilience to grow at 8 to 9 per cent. Therefore achieving the required investment rate to support such a high growth is very much in the realm of possibility. However, we need to overcome the current phase of declining investment rate. Investment sentiment is influenced by non-economic factors as well. An environment of political and social cohesion is imperative. Equally, we can get the incremental capital- output ratio (ICOR) to a lower level. Raising the productivity of capital will require policy reforms including administrative reforms as well as firm-level improvements. The "potential" to grow at 8 to 9 per cent at least for a decade exists. We have to make it happen.

(The topic of the Passage asked in the exam was based on the economic changes in the last 50 years) According to the given passage, what does 'ease of doing business imply?

Accepted Answer

Eliminating Red tapism

Answer

End of bureaucracy

Answer

Eliminating nepotism

Answer

Availability of funds

Question 3

Read the following passage carefully and certain words in the passage are printed in bold letters to help you locate them easily while answering some of these questions.

The Indian economy is currently passing through a phase of relatively slow growth. However, this should not cloud the fact that over the nine-year period beginning 2005-06, the average annual growth rate was 7.7 per cent. Against this background, the relevant question is whether India has the capability to grow at 8 to 9 per cent in a sustained way. In short, what is the potential rate of growth of India?

Normally, potential growth is measured using trends with some filters. In one sense, these are backward-looking measures, since they depend on historically observed data. In the case of measuring capacity utilisation in manufacturing, the maximum capacity is very often taken as the maximum output achieved in the recent period. Perhaps, in the case of determining the potential rate of growth of the economy also, one can take the maximum growth rate achieved in the recent past as the lowest estimate of the potential. However, this assumption will be valid only if there is reason to believe that the maximum growth rate achieved in the recent past was not a one-off event and that the growth rate achieved was robust and replicable.

India achieved a growth rate of 9.5 per cent in 2005-06, followed by 9.6 per cent and 9.3 per cent in the subsequent two years. After declining a bit in the wake of international financial crisis, the growth rate went back to 8.9 per cent in 2010-11. In many ways the growth rate achieved in the high phase period of 2005- 06 to 2007-08 was robust. The domestic savings rate during this period averaged 34.9 per cent of GDP. Similarly, the gross capital formation rate averaged 36.2 per cent. The current account deficit (CAD) remained low with an average of 1.2 per cent of GDP. Agricultural growth during this period averaged 5 per cent, and the annual manufacturing growth rate was 11 per cent. The capital flows were large but as the CAD remained low, the accretion to reserves amounted to $144 billion. Inflation during the period averaged 5.2 per cent. The combined fiscal deficit of the Centre and States was 5.2 per cent of GDP, well below the stipulated 6 per cent. Thus on many dimensions the growth rate was robust.

Unlike in the 1980s when the pick-up in growth was accompanied by deterioration in fiscal deficit and current account, the sharp increase in growth between 2005-06 and 2007-08 happened with the stability parameters at desired levels. Also, a booming external environment provided good support.

To assess whether the high growth phase can be replicated, we need to understand the factors that led to the slowdown since 2011-12. Complicating the analysis of this period is the revision of national income numbers with a new base. The two sets of numbers present a somewhat differing picture. According to the earlier series, the growth rate of the Indian economy fell below 5 per cent in 2012-13 and 2013-14. But the new series shows a decline below 5 per cent only in 2012-For 2013-14, the new series records a growth rate of 6.6 per cent, as against 4.7 per cent according to the earlier estimate. For 2014-15 and 2015-16, there is only one set of numbers, that is, according to the new series. For both the years the growth rate is above 7 per cent. These are good growth rates under any circumstance, let alone the current global situation. Anyway, we have come down from the growth rate of 9-plus per cent which we had seen earlier.Three sets of reasons are attributed for the slowdown. First, the external environment had deteriorated sharply. The recovery from the crisis of 2008 was tepid. One country after another in the developed world came under pressure. Strangely, however, international commodity prices including crude oil prices remained high until a couple of years ago. All this had an adverse impact on developing countries, including India. However, it would be wrong to attribute the slowdown in India primarily to external factors. The domestic factors are the key. Second, there were severe supply bottlenecks. Agricultural production fell sharply in 2009-10 because of a severe drought. This triggered an inflation which lasted for several years thereafter. Coal output fell. Iron ore output fell, partly because of court decisions. The third set of reasons is basically non-economic which led collectively to a weakening of investment. A multitude of issues relating to scams and perceived delays in decision- making created an element of uncertainty in the minds of investors. New investments began to fall.

The rise in investment rate must be supported by a rise in the domestic saving rate. An increase in investment rate supported by a widening current account deficit is not sustainable and is fraught with serious consequences. Only a current account deficit in the region of 1 to 1.5 per cent is sustainable. Incremental capital output ratio is a catch-all variable which is influenced by a host of factors. Obviously, it depends on technology. It also depends upon the skill of the labour force which in turn depends on the quality of the education system. Another catch-all expression "ease of doing business" is also relevant (i.e.) bureaucratic hurdles which impede speedy execution of projects need to be removed. Thus improving the productivity of capital needs action on several fronts.

Making a prediction about the future is always hazardous. Many things can go wrong. The Indian economy in the recent past has shown that it has the resilience to grow at 8 to 9 per cent. Therefore achieving the required investment rate to support such a high growth is very much in the realm of possibility. However, we need to overcome the current phase of declining investment rate. Investment sentiment is influenced by non-economic factors as well. An environment of political and social cohesion is imperative. Equally, we can get the incremental capital- output ratio (ICOR) to a lower level. Raising the productivity of capital will require policy reforms including administrative reforms as well as firm-level improvements. The "potential" to grow at 8 to 9 per cent at least for a decade exists. We have to make it happen.

(The topic of the Passage asked in the exam was based on the economic changes in the last 50 years) On what factors does incremental capital output ratio NOT depend?

Accepted Answer

Low fiscal deficit

Answer

Technology

Answer

Skilled labour

Answer

Better education system

Question 4

Read the following passage carefully and certain words in the passage are printed in bold letters to help you locate them easily while answering some of these questions.

The Indian economy is currently passing through a phase of relatively slow growth. However, this should not cloud the fact that over the nine-year period beginning 2005-06, the average annual growth rate was 7.7 per cent. Against this background, the relevant question is whether India has the capability to grow at 8 to 9 per cent in a sustained way. In short, what is the potential rate of growth of India?

Normally, potential growth is measured using trends with some filters. In one sense, these are backward-looking measures, since they depend on historically observed data. In the case of measuring capacity utilisation in manufacturing, the maximum capacity is very often taken as the maximum output achieved in the recent period. Perhaps, in the case of determining the potential rate of growth of the economy also, one can take the maximum growth rate achieved in the recent past as the lowest estimate of the potential. However, this assumption will be valid only if there is reason to believe that the maximum growth rate achieved in the recent past was not a one-off event and that the growth rate achieved was robust and replicable.

India achieved a growth rate of 9.5 per cent in 2005-06, followed by 9.6 per cent and 9.3 per cent in the subsequent two years. After declining a bit in the wake of international financial crisis, the growth rate went back to 8.9 per cent in 2010-11. In many ways the growth rate achieved in the high phase period of 2005- 06 to 2007-08 was robust. The domestic savings rate during this period averaged 34.9 per cent of GDP. Similarly, the gross capital formation rate averaged 36.2 per cent. The current account deficit (CAD) remained low with an average of 1.2 per cent of GDP. Agricultural growth during this period averaged 5 per cent, and the annual manufacturing growth rate was 11 per cent. The capital flows were large but as the CAD remained low, the accretion to reserves amounted to $144 billion. Inflation during the period averaged 5.2 per cent. The combined fiscal deficit of the Centre and States was 5.2 per cent of GDP, well below the stipulated 6 per cent. Thus on many dimensions the growth rate was robust.

Unlike in the 1980s when the pick-up in growth was accompanied by deterioration in fiscal deficit and current account, the sharp increase in growth between 2005-06 and 2007-08 happened with the stability parameters at desired levels. Also, a booming external environment provided good support.

To assess whether the high growth phase can be replicated, we need to understand the factors that led to the slowdown since 2011-12. Complicating the analysis of this period is the revision of national income numbers with a new base. The two sets of numbers present a somewhat differing picture. According to the earlier series, the growth rate of the Indian economy fell below 5 per cent in 2012-13 and 2013-14. But the new series shows a decline below 5 per cent only in 2012-For 2013-14, the new series records a growth rate of 6.6 per cent, as against 4.7 per cent according to the earlier estimate. For 2014-15 and 2015-16, there is only one set of numbers, that is, according to the new series. For both the years the growth rate is above 7 per cent. These are good growth rates under any circumstance, let alone the current global situation. Anyway, we have come down from the growth rate of 9-plus per cent which we had seen earlier.Three sets of reasons are attributed for the slowdown. First, the external environment had deteriorated sharply. The recovery from the crisis of 2008 was tepid. One country after another in the developed world came under pressure. Strangely, however, international commodity prices including crude oil prices remained high until a couple of years ago. All this had an adverse impact on developing countries, including India. However, it would be wrong to attribute the slowdown in India primarily to external factors. The domestic factors are the key. Second, there were severe supply bottlenecks. Agricultural production fell sharply in 2009-10 because of a severe drought. This triggered an inflation which lasted for several years thereafter. Coal output fell. Iron ore output fell, partly because of court decisions. The third set of reasons is basically non-economic which led collectively to a weakening of investment. A multitude of issues relating to scams and perceived delays in decision- making created an element of uncertainty in the minds of investors. New investments began to fall.

The rise in investment rate must be supported by a rise in the domestic saving rate. An increase in investment rate supported by a widening current account deficit is not sustainable and is fraught with serious consequences. Only a current account deficit in the region of 1 to 1.5 per cent is sustainable. Incremental capital output ratio is a catch-all variable which is influenced by a host of factors. Obviously, it depends on technology. It also depends upon the skill of the labour force which in turn depends on the quality of the education system. Another catch-all expression "ease of doing business" is also relevant (i.e.) bureaucratic hurdles which impede speedy execution of projects need to be removed. Thus improving the productivity of capital needs action on several fronts.

Making a prediction about the future is always hazardous. Many things can go wrong. The Indian economy in the recent past has shown that it has the resilience to grow at 8 to 9 per cent. Therefore achieving the required investment rate to support such a high growth is very much in the realm of possibility. However, we need to overcome the current phase of declining investment rate. Investment sentiment is influenced by non-economic factors as well. An environment of political and social cohesion is imperative. Equally, we can get the incremental capital- output ratio (ICOR) to a lower level. Raising the productivity of capital will require policy reforms including administrative reforms as well as firm-level improvements. The "potential" to grow at 8 to 9 per cent at least for a decade exists. We have to make it happen.

(The topic of the Passage asked in the exam was based on the economic changes in the last 50 years) On the basis of the given passage, which of the following options cannot be inferred?

Accepted Answer

(c) The Indian economy experienced a great robust throughout the previous decade.

Answer

(a) Corruption is one of the reasons for the economic slowdown of India

Answer

(b) There is a dissimilitude between the calculations based on new base and the previous one.

Answer

(d) Fiscal deficit below six percent is proviso

Question 5

Read the following passage carefully and certain words in the passage are printed in bold letters to help you locate them easily while answering some of these questions.

The Indian economy is currently passing through a phase of relatively slow growth. However, this should not cloud the fact that over the nine-year period beginning 2005-06, the average annual growth rate was 7.7 per cent. Against this background, the relevant question is whether India has the capability to grow at 8 to 9 per cent in a sustained way. In short, what is the potential rate of growth of India?

Normally, potential growth is measured using trends with some filters. In one sense, these are backward-looking measures, since they depend on historically observed data. In the case of measuring capacity utilisation in manufacturing, the maximum capacity is very often taken as the maximum output achieved in the recent period. Perhaps, in the case of determining the potential rate of growth of the economy also, one can take the maximum growth rate achieved in the recent past as the lowest estimate of the potential. However, this assumption will be valid only if there is reason to believe that the maximum growth rate achieved in the recent past was not a one-off event and that the growth rate achieved was robust and replicable.

India achieved a growth rate of 9.5 per cent in 2005-06, followed by 9.6 per cent and 9.3 per cent in the subsequent two years. After declining a bit in the wake of international financial crisis, the growth rate went back to 8.9 per cent in 2010-11. In many ways the growth rate achieved in the high phase period of 2005- 06 to 2007-08 was robust. The domestic savings rate during this period averaged 34.9 per cent of GDP. Similarly, the gross capital formation rate averaged 36.2 per cent. The current account deficit (CAD) remained low with an average of 1.2 per cent of GDP. Agricultural growth during this period averaged 5 per cent, and the annual manufacturing growth rate was 11 per cent. The capital flows were large but as the CAD remained low, the accretion to reserves amounted to $144 billion. Inflation during the period averaged 5.2 per cent. The combined fiscal deficit of the Centre and States was 5.2 per cent of GDP, well below the stipulated 6 per cent. Thus on many dimensions the growth rate was robust.

Unlike in the 1980s when the pick-up in growth was accompanied by deterioration in fiscal deficit and current account, the sharp increase in growth between 2005-06 and 2007-08 happened with the stability parameters at desired levels. Also, a booming external environment provided good support.

To assess whether the high growth phase can be replicated, we need to understand the factors that led to the slowdown since 2011-12. Complicating the analysis of this period is the revision of national income numbers with a new base. The two sets of numbers present a somewhat differing picture. According to the earlier series, the growth rate of the Indian economy fell below 5 per cent in 2012-13 and 2013-14. But the new series shows a decline below 5 per cent only in 2012-For 2013-14, the new series records a growth rate of 6.6 per cent, as against 4.7 per cent according to the earlier estimate. For 2014-15 and 2015-16, there is only one set of numbers, that is, according to the new series. For both the years the growth rate is above 7 per cent. These are good growth rates under any circumstance, let alone the current global situation. Anyway, we have come down from the growth rate of 9-plus per cent which we had seen earlier.Three sets of reasons are attributed for the slowdown. First, the external environment had deteriorated sharply. The recovery from the crisis of 2008 was tepid. One country after another in the developed world came under pressure. Strangely, however, international commodity prices including crude oil prices remained high until a couple of years ago. All this had an adverse impact on developing countries, including India. However, it would be wrong to attribute the slowdown in India primarily to external factors. The domestic factors are the key. Second, there were severe supply bottlenecks. Agricultural production fell sharply in 2009-10 because of a severe drought. This triggered an inflation which lasted for several years thereafter. Coal output fell. Iron ore output fell, partly because of court decisions. The third set of reasons is basically non-economic which led collectively to a weakening of investment. A multitude of issues relating to scams and perceived delays in decision- making created an element of uncertainty in the minds of investors. New investments began to fall.

The rise in investment rate must be supported by a rise in the domestic saving rate. An increase in investment rate supported by a widening current account deficit is not sustainable and is fraught with serious consequences. Only a current account deficit in the region of 1 to 1.5 per cent is sustainable. Incremental capital output ratio is a catch-all variable which is influenced by a host of factors. Obviously, it depends on technology. It also depends upon the skill of the labour force which in turn depends on the quality of the education system. Another catch-all expression "ease of doing business" is also relevant (i.e.) bureaucratic hurdles which impede speedy execution of projects need to be removed. Thus improving the productivity of capital needs action on several fronts.

Making a prediction about the future is always hazardous. Many things can go wrong. The Indian economy in the recent past has shown that it has the resilience to grow at 8 to 9 per cent. Therefore achieving the required investment rate to support such a high growth is very much in the realm of possibility. However, we need to overcome the current phase of declining investment rate. Investment sentiment is influenced by non-economic factors as well. An environment of political and social cohesion is imperative. Equally, we can get the incremental capital- output ratio (ICOR) to a lower level. Raising the productivity of capital will require policy reforms including administrative reforms as well as firm-level improvements. The "potential" to grow at 8 to 9 per cent at least for a decade exists. We have to make it happen.

(The topic of the Passage asked in the exam was based on the economic changes in the last 50 years) According to the given passage, which of the following option is the best reason which supports the author's conclusion that 'high growth is very much in the realm of possibility'?

Accepted Answer

None of these

Answer

Flourishing service, agricultural and manufacturing sectors of India.

Answer

Policy reforms introduced by the current government.

Answer

Increasing growth rate and investment rate

Answer

India's potential to grow at a high rate

Question 6

Read the following passage carefully and certain words in the passage are printed in bold letters to help you locate them easily while answering some of these questions.

The Indian economy is currently passing through a phase of relatively slow growth. However, this should not cloud the fact that over the nine-year period beginning 2005-06, the average annual growth rate was 7.7 per cent. Against this background, the relevant question is whether India has the capability to grow at 8 to 9 per cent in a sustained way. In short, what is the potential rate of growth of India?

Normally, potential growth is measured using trends with some filters. In one sense, these are backward-looking measures, since they depend on historically observed data. In the case of measuring capacity utilisation in manufacturing, the maximum capacity is very often taken as the maximum output achieved in the recent period. Perhaps, in the case of determining the potential rate of growth of the economy also, one can take the maximum growth rate achieved in the recent past as the lowest estimate of the potential. However, this assumption will be valid only if there is reason to believe that the maximum growth rate achieved in the recent past was not a one-off event and that the growth rate achieved was robust and replicable.

India achieved a growth rate of 9.5 per cent in 2005-06, followed by 9.6 per cent and 9.3 per cent in the subsequent two years. After declining a bit in the wake of international financial crisis, the growth rate went back to 8.9 per cent in 2010-11. In many ways the growth rate achieved in the high phase period of 2005- 06 to 2007-08 was robust. The domestic savings rate during this period averaged 34.9 per cent of GDP. Similarly, the gross capital formation rate averaged 36.2 per cent. The current account deficit (CAD) remained low with an average of 1.2 per cent of GDP. Agricultural growth during this period averaged 5 per cent, and the annual manufacturing growth rate was 11 per cent. The capital flows were large but as the CAD remained low, the accretion to reserves amounted to $144 billion. Inflation during the period averaged 5.2 per cent. The combined fiscal deficit of the Centre and States was 5.2 per cent of GDP, well below the stipulated 6 per cent. Thus on many dimensions the growth rate was robust.

Unlike in the 1980s when the pick-up in growth was accompanied by deterioration in fiscal deficit and current account, the sharp increase in growth between 2005-06 and 2007-08 happened with the stability parameters at desired levels. Also, a booming external environment provided good support.

To assess whether the high growth phase can be replicated, we need to understand the factors that led to the slowdown since 2011-12. Complicating the analysis of this period is the revision of national income numbers with a new base. The two sets of numbers present a somewhat differing picture. According to the earlier series, the growth rate of the Indian economy fell below 5 per cent in 2012-13 and 2013-14. But the new series shows a decline below 5 per cent only in 2012-For 2013-14, the new series records a growth rate of 6.6 per cent, as against 4.7 per cent according to the earlier estimate. For 2014-15 and 2015-16, there is only one set of numbers, that is, according to the new series. For both the years the growth rate is above 7 per cent. These are good growth rates under any circumstance, let alone the current global situation. Anyway, we have come down from the growth rate of 9-plus per cent which we had seen earlier.Three sets of reasons are attributed for the slowdown. First, the external environment had deteriorated sharply. The recovery from the crisis of 2008 was tepid. One country after another in the developed world came under pressure. Strangely, however, international commodity prices including crude oil prices remained high until a couple of years ago. All this had an adverse impact on developing countries, including India. However, it would be wrong to attribute the slowdown in India primarily to external factors. The domestic factors are the key. Second, there were severe supply bottlenecks. Agricultural production fell sharply in 2009-10 because of a severe drought. This triggered an inflation which lasted for several years thereafter. Coal output fell. Iron ore output fell, partly because of court decisions. The third set of reasons is basically non-economic which led collectively to a weakening of investment. A multitude of issues relating to scams and perceived delays in decision- making created an element of uncertainty in the minds of investors. New investments began to fall.

The rise in investment rate must be supported by a rise in the domestic saving rate. An increase in investment rate supported by a widening current account deficit is not sustainable and is fraught with serious consequences. Only a current account deficit in the region of 1 to 1.5 per cent is sustainable. Incremental capital output ratio is a catch-all variable which is influenced by a host of factors. Obviously, it depends on technology. It also depends upon the skill of the labour force which in turn depends on the quality of the education system. Another catch-all expression "ease of doing business" is also relevant (i.e.) bureaucratic hurdles which impede speedy execution of projects need to be removed. Thus improving the productivity of capital needs action on several fronts.

Making a prediction about the future is always hazardous. Many things can go wrong. The Indian economy in the recent past has shown that it has the resilience to grow at 8 to 9 per cent. Therefore achieving the required investment rate to support such a high growth is very much in the realm of possibility. However, we need to overcome the current phase of declining investment rate. Investment sentiment is influenced by non-economic factors as well. An environment of political and social cohesion is imperative. Equally, we can get the incremental capital- output ratio (ICOR) to a lower level. Raising the productivity of capital will require policy reforms including administrative reforms as well as firm-level improvements. The "potential" to grow at 8 to 9 per cent at least for a decade exists. We have to make it happen.

(The topic of the Passage asked in the exam was based on the economic changes in the last 50 years) On the basis of your reading, choose an appropriate title for the passage.

Accepted Answer

Can India grow fast: An introspection

Answer

The Indian economy: The phase of sluggish growth.

Answer

India's potential

Answer

India's promising past results.

Question 7

Choose the word/group of words which is MOST SIMILAR in meaning to the word/group of words printed in bold as used in the passage. ACCRETION

Accepted Answer

Accumulation

Answer

Adherence

Answer

Approval

Answer

Devaluation

Question 8

Choose the word/group of words which is MOST SIMILAR in meaning to the word/group of words printed in bold as used in the passage. IMPEDE

Accepted Answer

Delay

Answer

Violate

Answer

Defer

Answer

Taint

Question 9

Read the following passage carefully and answer the questions given below it. Certain words have been printed in bold to help you to locate them while answering some of the questions.

Brexit has evoked a spate of comments. These comments fall into broadly two categories. The first set of comments focusses on the short-term and medium- term impact of Brexit on the U.K., Europe and the rest of the world including India. The second goes into the reasons behind this decision of the British. Globalisation has been interpreted in many ways. In broad terms, globalisation denotes the free movement of goods, services, capital, funds, ideas, technology and people across countries. Many people think globalisation is a recent phenomenon. This is not true. This has been going on for centuries. What has made it unique in recent times is the speed of the movement. Great Britain and many other countries in Europe have reached the present level of economic development only because of this free movement. In both demographic and geographic terms, Britain is a small country. It is not the size of the domestic market that determined its growth. London could not have emerged as the financial centre of the world but for the free flow of capital.

The gamut of financial services offered by London is geared to meet world demand and not that of Britain alone. Even after the exit from the EU, Britain cannot remain as an isolated island. It has to be part of an international trade regime which allows for free trade. What then could have motivated a little more than 50 per cent of the population to come out of the EU? It has something to do with the nature of the relationship within the EU. The EU has evolved over the last seven decades. From a loose arrangement, it has become a tight bureaucratic organisation with its jurisdiction extending to multifarious activities. When the euro was created as a common currency, Britain opted out of it. The European Central Bank sets a common monetary policy stance for all member countries. This itself has been a source of irritation to many member countries. This came out prominently at the time of the Greek crisis. With the loss of one instrument of control - namely, the exchange rate variation - the entire burden of adjustment had to be through employment and output changes. As one commentator put it, the EU has moved up its aspiration from the idea of 'common' market to 'single' market. It is this transition which half of Britain has resented. The complex set of regulations emanating from Brussels has made at least a section of the British people feel that they have lost 'independence'. Some of the elite of Britain who voted to 'leave' feel this way. They think that control has moved to unelected bureaucrats in Brussels. What has induced the 'non-elite' to vote for Brexit was the EU's migration policy. The free movement of people has been the last straw that broke the camel's back. The low-paid jobs in the U.K. have been taken over by migrants predominantly from Eastern Europe. In an economy which has been growing slowly (even though the U.K. is a better performer than other European countries in recent years), this has come as a shock. The spirit of 'nationalism' still runs high. The poor in Britain feel that they have been cheated by the migrants. Absorbing migrants is not new for Britain. The Asian and African migrants constitute a significant proportion of the population. All this happened when the economy was strong and growing. But this is not the situation now, and the resentment is in one sense natural. However, looked at globally, the poor in the countries from which people migrate have benefited. The British have also gained to the extent that the free movement of people has enabled highly skilled professionals to find positions all over Europe. The 'leave' vote thus was motivated by two considerations: one, the degree of integration that the EU was trying to impose, and two, the migration policy which allowed a free movement of people across countries. Globalisation is not really the devil. If the EU arrangement had been restricted only to free movement of goods, services, capital and funds, it could not have led to any deep resentment. It is the attempt at greater economic integration that has been interpreted as a loss of sovereignty and resented. Globalisation, with its emphasis on efficiency (since goods and services will get produced at the least cost centres), can lead to greater inequality theoretically.

Within a country also, the more efficient including professionals gain disproportionately. This situation gets worse if economies are growing slowly. The U.S. has always prided itself on saying that the system they have is 'people's capitalism'. Inequalities do not matter much when economies are growing strongly and when new entrants to the labour force find employment easily. Countervailing measures are needed to take care of the adverse impact of globalisation. For this reason, we cannot throw the baby out with the bathwater. The developed countries face a serious dilemma. They have reached a stage in their development when further growth will be slow. This will have implications for absorbing the labour that gets added to the market. Complicating the situation is technological development which is increasingly labour-saving. New technologies have a twofold impact. First, they reduce the demand for labour in general. Second, in particular they make unskilled and semi-skilled work redundant. They demand new skills for which retraining may be needed. Distribution of income has thus become an issue which needs to be dealt with directly. Brexit is not a blow against globalisation per se. Labour does not stand in the same category as capital, even though both are factors of production. Migration hurts when the economy is at a low ebb. Britain, along with other developed countries, faces a basic problem of coping with a growth potential which is far lower than the growth rate they had seen before 2008. To what aspect this article is devoted by the author?

Accepted Answer

Motivation behind the vote against greater economic integration.

Answer

Impact of Brexit on U.K and Europe.

Answer

Impact of globalization.

Answer

The implications of Brexit on the migration in Britain.

Question 10

Read the following passage carefully and answer the questions given below it. Certain words have been printed in bold to help you to locate them while answering some of the questions.

Brexit has evoked a spate of comments. These comments fall into broadly two categories. The first set of comments focusses on the short-term and medium- term impact of Brexit on the U.K., Europe and the rest of the world including India. The second goes into the reasons behind this decision of the British. Globalisation has been interpreted in many ways. In broad terms, globalisation denotes the free movement of goods, services, capital, funds, ideas, technology and people across countries. Many people think globalisation is a recent phenomenon. This is not true. This has been going on for centuries. What has made it unique in recent times is the speed of the movement. Great Britain and many other countries in Europe have reached the present level of economic development only because of this free movement. In both demographic and geographic terms, Britain is a small country. It is not the size of the domestic market that determined its growth. London could not have emerged as the financial centre of the world but for the free flow of capital.

The gamut of financial services offered by London is geared to meet world demand and not that of Britain alone. Even after the exit from the EU, Britain cannot remain as an isolated island. It has to be part of an international trade regime which allows for free trade. What then could have motivated a little more than 50 per cent of the population to come out of the EU? It has something to do with the nature of the relationship within the EU. The EU has evolved over the last seven decades. From a loose arrangement, it has become a tight bureaucratic organisation with its jurisdiction extending to multifarious activities. When the euro was created as a common currency, Britain opted out of it. The European Central Bank sets a common monetary policy stance for all member countries. This itself has been a source of irritation to many member countries. This came out prominently at the time of the Greek crisis. With the loss of one instrument of control - namely, the exchange rate variation - the entire burden of adjustment had to be through employment and output changes. As one commentator put it, the EU has moved up its aspiration from the idea of 'common' market to 'single' market. It is this transition which half of Britain has resented. The complex set of regulations emanating from Brussels has made at least a section of the British people feel that they have lost 'independence'. Some of the elite of Britain who voted to 'leave' feel this way. They think that control has moved to unelected bureaucrats in Brussels. What has induced the 'non-elite' to vote for Brexit was the EU's migration policy. The free movement of people has been the last straw that broke the camel's back. The low-paid jobs in the U.K. have been taken over by migrants predominantly from Eastern Europe. In an economy which has been growing slowly (even though the U.K. is a better performer than other European countries in recent years), this has come as a shock. The spirit of 'nationalism' still runs high. The poor in Britain feel that they have been cheated by the migrants. Absorbing migrants is not new for Britain. The Asian and African migrants constitute a significant proportion of the population. All this happened when the economy was strong and growing. But this is not the situation now, and the resentment is in one sense natural. However, looked at globally, the poor in the countries from which people migrate have benefited. The British have also gained to the extent that the free movement of people has enabled highly skilled professionals to find positions all over Europe. The 'leave' vote thus was motivated by two considerations: one, the degree of integration that the EU was trying to impose, and two, the migration policy which allowed a free movement of people across countries. Globalisation is not really the devil. If the EU arrangement had been restricted only to free movement of goods, services, capital and funds, it could not have led to any deep resentment. It is the attempt at greater economic integration that has been interpreted as a loss of sovereignty and resented. Globalisation, with its emphasis on efficiency (since goods and services will get produced at the least cost centres), can lead to greater inequality theoretically.

Within a country also, the more efficient including professionals gain disproportionately. This situation gets worse if economies are growing slowly. The U.S. has always prided itself on saying that the system they have is 'people's capitalism'. Inequalities do not matter much when economies are growing strongly and when new entrants to the labour force find employment easily. Countervailing measures are needed to take care of the adverse impact of globalisation. For this reason, we cannot throw the baby out with the bathwater. The developed countries face a serious dilemma. They have reached a stage in their development when further growth will be slow. This will have implications for absorbing the labour that gets added to the market. Complicating the situation is technological development which is increasingly labour-saving. New technologies have a twofold impact. First, they reduce the demand for labour in general. Second, in particular they make unskilled and semi-skilled work redundant. They demand new skills for which retraining may be needed. Distribution of income has thus become an issue which needs to be dealt with directly. Brexit is not a blow against globalisation per se. Labour does not stand in the same category as capital, even though both are factors of production. Migration hurts when the economy is at a low ebb. Britain, along with other developed countries, faces a basic problem of coping with a growth potential which is far lower than the growth rate they had seen before 2008. What has been the reason for the infuriation of the member countries of European Union?

Accepted Answer

The increase in the EU's propensity towards single market.

Answer

Technological development which is increasingly labour-saving.

Answer

Britain's refusal to accept euro as its currency even after common monetary policy stance for all the members.

Answer

The migration policy which allowed a free movement of people across countries.

Question 11

Read the following passage carefully and answer the questions given below it. Certain words have been printed in bold to help you to locate them while answering some of the questions.

Brexit has evoked a spate of comments. These comments fall into broadly two categories. The first set of comments focusses on the short-term and medium- term impact of Brexit on the U.K., Europe and the rest of the world including India. The second goes into the reasons behind this decision of the British. Globalisation has been interpreted in many ways. In broad terms, globalisation denotes the free movement of goods, services, capital, funds, ideas, technology and people across countries. Many people think globalisation is a recent phenomenon. This is not true. This has been going on for centuries. What has made it unique in recent times is the speed of the movement. Great Britain and many other countries in Europe have reached the present level of economic development only because of this free movement. In both demographic and geographic terms, Britain is a small country. It is not the size of the domestic market that determined its growth. London could not have emerged as the financial centre of the world but for the free flow of capital.

The gamut of financial services offered by London is geared to meet world demand and not that of Britain alone. Even after the exit from the EU, Britain cannot remain as an isolated island. It has to be part of an international trade regime which allows for free trade. What then could have motivated a little more than 50 per cent of the population to come out of the EU? It has something to do with the nature of the relationship within the EU. The EU has evolved over the last seven decades. From a loose arrangement, it has become a tight bureaucratic organisation with its jurisdiction extending to multifarious activities. When the euro was created as a common currency, Britain opted out of it. The European Central Bank sets a common monetary policy stance for all member countries. This itself has been a source of irritation to many member countries. This came out prominently at the time of the Greek crisis. With the loss of one instrument of control - namely, the exchange rate variation - the entire burden of adjustment had to be through employment and output changes. As one commentator put it, the EU has moved up its aspiration from the idea of 'common' market to 'single' market. It is this transition which half of Britain has resented. The complex set of regulations emanating from Brussels has made at least a section of the British people feel that they have lost 'independence'. Some of the elite of Britain who voted to 'leave' feel this way. They think that control has moved to unelected bureaucrats in Brussels. What has induced the 'non-elite' to vote for Brexit was the EU's migration policy. The free movement of people has been the last straw that broke the camel's back. The low-paid jobs in the U.K. have been taken over by migrants predominantly from Eastern Europe. In an economy which has been growing slowly (even though the U.K. is a better performer than other European countries in recent years), this has come as a shock. The spirit of 'nationalism' still runs high. The poor in Britain feel that they have been cheated by the migrants. Absorbing migrants is not new for Britain. The Asian and African migrants constitute a significant proportion of the population. All this happened when the economy was strong and growing. But this is not the situation now, and the resentment is in one sense natural. However, looked at globally, the poor in the countries from which people migrate have benefited. The British have also gained to the extent that the free movement of people has enabled highly skilled professionals to find positions all over Europe. The 'leave' vote thus was motivated by two considerations: one, the degree of integration that the EU was trying to impose, and two, the migration policy which allowed a free movement of people across countries. Globalisation is not really the devil. If the EU arrangement had been restricted only to free movement of goods, services, capital and funds, it could not have led to any deep resentment. It is the attempt at greater economic integration that has been interpreted as a loss of sovereignty and resented. Globalisation, with its emphasis on efficiency (since goods and services will get produced at the least cost centres), can lead to greater inequality theoretically.

Within a country also, the more efficient including professionals gain disproportionately. This situation gets worse if economies are growing slowly. The U.S. has always prided itself on saying that the system they have is 'people's capitalism'. Inequalities do not matter much when economies are growing strongly and when new entrants to the labour force find employment easily. Countervailing measures are needed to take care of the adverse impact of globalisation. For this reason, we cannot throw the baby out with the bathwater. The developed countries face a serious dilemma. They have reached a stage in their development when further growth will be slow. This will have implications for absorbing the labour that gets added to the market. Complicating the situation is technological development which is increasingly labour-saving. New technologies have a twofold impact. First, they reduce the demand for labour in general. Second, in particular they make unskilled and semi-skilled work redundant. They demand new skills for which retraining may be needed. Distribution of income has thus become an issue which needs to be dealt with directly. Brexit is not a blow against globalisation per se. Labour does not stand in the same category as capital, even though both are factors of production. Migration hurts when the economy is at a low ebb. Britain, along with other developed countries, faces a basic problem of coping with a growth potential which is far lower than the growth rate they had seen before 2008. Which of the following is one of the reasons for major section of British people to vote against European Union?

Accepted Answer

The jurisdiction enjoyed by the unelected officials in Brussels.

Answer

Low wages due to the abundance of labour force migrating from Asian countries to the Britain.

Answer

Slow economic growth and incompetence of the new technologies because of which they are becoming more financially weak.

Answer

The spirit of nationalism among the some sections of British people.

Question 12

Read the following passage carefully and answer the questions given below it. Certain words have been printed in bold to help you to locate them while answering some of the questions.

Brexit has evoked a spate of comments. These comments fall into broadly two categories. The first set of comments focusses on the short-term and medium- term impact of Brexit on the U.K., Europe and the rest of the world including India. The second goes into the reasons behind this decision of the British. Globalisation has been interpreted in many ways. In broad terms, globalisation denotes the free movement of goods, services, capital, funds, ideas, technology and people across countries. Many people think globalisation is a recent phenomenon. This is not true. This has been going on for centuries. What has made it unique in recent times is the speed of the movement. Great Britain and many other countries in Europe have reached the present level of economic development only because of this free movement. In both demographic and geographic terms, Britain is a small country. It is not the size of the domestic market that determined its growth. London could not have emerged as the financial centre of the world but for the free flow of capital.

The gamut of financial services offered by London is geared to meet world demand and not that of Britain alone. Even after the exit from the EU, Britain cannot remain as an isolated island. It has to be part of an international trade regime which allows for free trade. What then could have motivated a little more than 50 per cent of the population to come out of the EU? It has something to do with the nature of the relationship within the EU. The EU has evolved over the last seven decades. From a loose arrangement, it has become a tight bureaucratic organisation with its jurisdiction extending to multifarious activities. When the euro was created as a common currency, Britain opted out of it. The European Central Bank sets a common monetary policy stance for all member countries. This itself has been a source of irritation to many member countries. This came out prominently at the time of the Greek crisis. With the loss of one instrument of control - namely, the exchange rate variation - the entire burden of adjustment had to be through employment and output changes. As one commentator put it, the EU has moved up its aspiration from the idea of 'common' market to 'single' market. It is this transition which half of Britain has resented. The complex set of regulations emanating from Brussels has made at least a section of the British people feel that they have lost 'independence'. Some of the elite of Britain who voted to 'leave' feel this way. They think that control has moved to unelected bureaucrats in Brussels. What has induced the 'non-elite' to vote for Brexit was the EU's migration policy. The free movement of people has been the last straw that broke the camel's back. The low-paid jobs in the U.K. have been taken over by migrants predominantly from Eastern Europe. In an economy which has been growing slowly (even though the U.K. is a better performer than other European countries in recent years), this has come as a shock. The spirit of 'nationalism' still runs high. The poor in Britain feel that they have been cheated by the migrants. Absorbing migrants is not new for Britain. The Asian and African migrants constitute a significant proportion of the population. All this happened when the economy was strong and growing. But this is not the situation now, and the resentment is in one sense natural. However, looked at globally, the poor in the countries from which people migrate have benefited. The British have also gained to the extent that the free movement of people has enabled highly skilled professionals to find positions all over Europe. The 'leave' vote thus was motivated by two considerations: one, the degree of integration that the EU was trying to impose, and two, the migration policy which allowed a free movement of people across countries. Globalisation is not really the devil. If the EU arrangement had been restricted only to free movement of goods, services, capital and funds, it could not have led to any deep resentment. It is the attempt at greater economic integration that has been interpreted as a loss of sovereignty and resented. Globalisation, with its emphasis on efficiency (since goods and services will get produced at the least cost centres), can lead to greater inequality theoretically.

Within a country also, the more efficient including professionals gain disproportionately. This situation gets worse if economies are growing slowly. The U.S. has always prided itself on saying that the system they have is 'people's capitalism'. Inequalities do not matter much when economies are growing strongly and when new entrants to the labour force find employment easily. Countervailing measures are needed to take care of the adverse impact of globalisation. For this reason, we cannot throw the baby out with the bathwater. The developed countries face a serious dilemma. They have reached a stage in their development when further growth will be slow. This will have implications for absorbing the labour that gets added to the market. Complicating the situation is technological development which is increasingly labour-saving. New technologies have a twofold impact. First, they reduce the demand for labour in general. Second, in particular they make unskilled and semi-skilled work redundant. They demand new skills for which retraining may be needed. Distribution of income has thus become an issue which needs to be dealt with directly. Brexit is not a blow against globalisation per se. Labour does not stand in the same category as capital, even though both are factors of production. Migration hurts when the economy is at a low ebb. Britain, along with other developed countries, faces a basic problem of coping with a growth potential which is far lower than the growth rate they had seen before 2008. Which of the following statement is false regarding the impact of globalization?

Which of the following statement is false regarding the impact of globalization? (i) Globalization that stresses on productivity leads to inequality.

(ii) Globalization has been attributed as the primary reason for the loss of supremacy in British people by the author.

(iii) Globalization is a major factor which helped London in becoming a financial center of the World.

Accepted Answer

Only (ii)

Answer

Both (ii) and (iii)

Answer

Only (iii)

Answer

Both (i) and (ii)

Question 13

Read the following passage carefully and answer the questions given below it. Certain words have been printed in bold to help you to locate them while answering some of the questions.

Brexit has evoked a spate of comments. These comments fall into broadly two categories. The first set of comments focusses on the short-term and medium- term impact of Brexit on the U.K., Europe and the rest of the world including India. The second goes into the reasons behind this decision of the British. Globalisation has been interpreted in many ways. In broad terms, globalisation denotes the free movement of goods, services, capital, funds, ideas, technology and people across countries. Many people think globalisation is a recent phenomenon. This is not true. This has been going on for centuries. What has made it unique in recent times is the speed of the movement. Great Britain and many other countries in Europe have reached the present level of economic development only because of this free movement. In both demographic and geographic terms, Britain is a small country. It is not the size of the domestic market that determined its growth. London could not have emerged as the financial centre of the world but for the free flow of capital.

The gamut of financial services offered by London is geared to meet world demand and not that of Britain alone. Even after the exit from the EU, Britain cannot remain as an isolated island. It has to be part of an international trade regime which allows for free trade. What then could have motivated a little more than 50 per cent of the population to come out of the EU? It has something to do with the nature of the relationship within the EU. The EU has evolved over the last seven decades. From a loose arrangement, it has become a tight bureaucratic organisation with its jurisdiction extending to multifarious activities. When the euro was created as a common currency, Britain opted out of it. The European Central Bank sets a common monetary policy stance for all member countries. This itself has been a source of irritation to many member countries. This came out prominently at the time of the Greek crisis. With the loss of one instrument of control - namely, the exchange rate variation - the entire burden of adjustment had to be through employment and output changes. As one commentator put it, the EU has moved up its aspiration from the idea of 'common' market to 'single' market. It is this transition which half of Britain has resented. The complex set of regulations emanating from Brussels has made at least a section of the British people feel that they have lost 'independence'. Some of the elite of Britain who voted to 'leave' feel this way. They think that control has moved to unelected bureaucrats in Brussels. What has induced the 'non-elite' to vote for Brexit was the EU's migration policy. The free movement of people has been the last straw that broke the camel's back. The low-paid jobs in the U.K. have been taken over by migrants predominantly from Eastern Europe. In an economy which has been growing slowly (even though the U.K. is a better performer than other European countries in recent years), this has come as a shock. The spirit of 'nationalism' still runs high. The poor in Britain feel that they have been cheated by the migrants. Absorbing migrants is not new for Britain. The Asian and African migrants constitute a significant proportion of the population. All this happened when the economy was strong and growing. But this is not the situation now, and the resentment is in one sense natural. However, looked at globally, the poor in the countries from which people migrate have benefited. The British have also gained to the extent that the free movement of people has enabled highly skilled professionals to find positions all over Europe. The 'leave' vote thus was motivated by two considerations: one, the degree of integration that the EU was trying to impose, and two, the migration policy which allowed a free movement of people across countries. Globalisation is not really the devil. If the EU arrangement had been restricted only to free movement of goods, services, capital and funds, it could not have led to any deep resentment. It is the attempt at greater economic integration that has been interpreted as a loss of sovereignty and resented. Globalisation, with its emphasis on efficiency (since goods and services will get produced at the least cost centres), can lead to greater inequality theoretically.

Within a country also, the more efficient including professionals gain disproportionately. This situation gets worse if economies are growing slowly. The U.S. has always prided itself on saying that the system they have is 'people's capitalism'. Inequalities do not matter much when economies are growing strongly and when new entrants to the labour force find employment easily. Countervailing measures are needed to take care of the adverse impact of globalisation. For this reason, we cannot throw the baby out with the bathwater. The developed countries face a serious dilemma. They have reached a stage in their development when further growth will be slow. This will have implications for absorbing the labour that gets added to the market. Complicating the situation is technological development which is increasingly labour-saving. New technologies have a twofold impact. First, they reduce the demand for labour in general. Second, in particular they make unskilled and semi-skilled work redundant. They demand new skills for which retraining may be needed. Distribution of income has thus become an issue which needs to be dealt with directly. Brexit is not a blow against globalisation per se. Labour does not stand in the same category as capital, even though both are factors of production. Migration hurts when the economy is at a low ebb. Britain, along with other developed countries, faces a basic problem of coping with a growth potential which is far lower than the growth rate they had seen before 2008. . What is the peril of migration?

Accepted Answer

None of these.

Answer

Complications in the technological development.

Answer

Increase in the inequality in the economies growing at a faster rate like Britain.

Answer

Redundant semi-skilled and skilled work in general.

Answer

Disbursement of salary is becoming a major issue because of increased number of labour.

Question 14

Choose the word/group of words which is MOST SIMILAR in meaning to the word/ group of words printed in bold as used in the passage. EVOKED

Accepted Answer

Elicit

Answer

Aplomb

Answer

Subdue

Answer

Extinguish

Question 15

Choose the word/group of words which is MOST SIMILAR in meaning to the word/ group of words printed in bold as used in the passage. SPATE

Accepted Answer

Deluge

Answer

Meristematic

Answer

Paradox

Answer

Sparse

Question 16

In each of the following sentence there are three blank spaces. Below each sentence there are five options and each option consists of three words which can be filled up in the blanks in the sentence to make the sentence grammatically correct. Indian Cricket has seen many_________captains.But Dhoni was certainly a/an___________one in many ways. As skipper, he mainly focused on cultivating team spirit and creating __________ for young players.

Accepted Answer

Stalwart, extraordinary, opportunities.

Answer

exceptional, diminutive, chances

Answer

sturdy, serendipitous, chances

Answer

stout, robust, opportunity

Question 17

In each of the following sentence there are three blank spaces. Below each sentence there are five options and each option consists of three words which can be filled up in the blanks in the sentence to make the sentence grammatically correct. Pakistani's Defense Minister Khwaja Muhammad Asif, for all practical purposes, recently ______ Israel with a ________nuclear attack, in response to a fake news report that the Israelis had said they would use nuclear __________against Pakistan if it sent ground troops to Syria.

Accepted Answer

threatened, retaliatory, weapons

Answer

Jeopardized, reciprocating , armor

Answer

admonished, riposte , weapon

Answer

rebuked , counter , armament

Question 18

In each of the following sentence there are three blank spaces. Below each sentence there are five options and each option consists of three words which can be filled up in the blanks in the sentence to make the sentence grammatically correct. The line seems to be a direct ______ to the establishment of a caliphate. But those who know the context of Faiz the poet, the man and his work correctly interpret it as a communist vision of life, with the _______ of the _________ prevailing.

Accepted Answer

Invocation, dictatorship , proletariat

Answer

Commendation, democracy, precariat

Answer

Intercession, autonomy , rabble

Answer

Citation, anarchism , bourgeoisie

Question 19

In each of the following sentence there are three blank spaces. Below each sentence there are five options and each option consists of three words which can be filled up in the blanks in the sentence to make the sentence grammatically correct. News and social media companies have a moral __________ to ensure that they do not, directly or otherwise, deliberately _________the facts to their audiences and pass them off for news. If it is a post-truth world we ________ this becomes especially important.

Accepted Answer

responsibility, misrepresent, inhabit

Answer

obligation, distort, desire

Answer

commitment, tarnish, denounce

Answer

purport, besmirch ,stigmatize

Question 20

In each of the following sentence there are three blank spaces. Below each sentence there are five options and each option consists of three words which can be filled up in the blanks in the sentence to make the sentence grammatically correct. Activists in the country have long protested its __________ society that essentially ________ women from travelling, marrying or attending college without permission from a male relative, who is called their__________.

Accepted Answer

patriarchal, prohibits, guardian.

Answer

benevolent , forbid, steward

Answer

Pre- Adamite, prevent, custodian

Answer

pre-eminent, restrict, protector

Answer

venerable, condemns, manciple.

Question 21

Five statements are given below, labelled a, b, c, d and e. Among these, four statements are in logical order and form a coherent paragraph. From the given options, choose the option that does not fit into the theme of the paragraph.

Accepted Answer

(d) sustainability is at the core of the "New Urban Agenda". A substantial portion is dedicated to various "transformative commitments for sustainable urban development"

Answer

(a) This can be seen in the growing importance cities are receiving in the distinct "worlds" of government, business, think tanks, academia and civil society.

Answer

(b) After years of ambivalence, urbanization is increasingly being embraced, or at least acknowledged, in India.

Answer

(c) Each of these "worlds" is populated by experts in specific "fields" within the urban realm such as planning, environment, transport, housing, finance and health.

Question 22

Five statements are given below, labelled a, b, c, d and e. Among these, four statements are in logical order and form a coherent paragraph. From the given options, choose the option that does not fit into the theme of the paragraph.

Accepted Answer

Therefore, one should not be surprised that the Indian corporate sector has kept its calls for lower interest rates and a competitive exchange rate on an auto-replay mode.

Answer

It is often said that the urgent and the immediate are not the same as important.

Answer

Indeed, they are in conflict with one another.

Answer

All the urgent and the immediate commentary on the decision by the newly constituted monetary policy committee (MPC) of the Reserve Bank of India (RBI) has already come out.

Question 23

Five statements are given below, labelled a, b, c, d and e. Among these, four statements are in logical order and form a coherent paragraph. From the given options, choose the option that does not fit into the theme of the paragraph.

Accepted Answer

It is also worth mentioning that most of them were seen as leaders of dominant farming communities or caste groups that benefited from rising profitability and price support.

Answer

Notwithstanding the good monsoon this year after back-to-back drought years, most commentators agree that the rural economy and the agricultural sector may not be out of distress.

Answer

Recent attempts by Rahul Gandhi to mobilize farmers during his Kisan Yatra might not revive the fortunes of the Congress party in Uttar Pradesh, but they did contribute to bringing the issues of farmers and agriculture to the political mainstream

Answer

Given that almost half of the total workers in the country are still engaged in farming and the majority of households in rural areas are still dependent on agriculture, directly or indirectly, issues confronting the farming community are naturally an important electoral plank.

Question 24

Five statements are given below, labelled a, b, c, d and e. Among these, four statements are in logical order and form a coherent paragraph. From the given options, choose the option that does not fit into the theme of the paragraph.

Accepted Answer

Dyn is a part of the backbone of the Internet, since it is one of the companies that provides domain name services or DNS to Internet users, and translates simple English-based commands like "livemint.com" typed into a browser into the actual numeric addresses that the Internet's computers use to identify each website.

Answer

Security firm Flashpoint has said that it believes that seemingly innocuous items such as video recorders, webcams, closed-circuit security cameras and the like were taken over by malware, and then, without their owners' knowledge, were used to help execute the massive cyber attack

Answer

This outage was astonishing in its ferocity, especially since it co-opted the much vaunted Internet of Things (IoT) into the attack.

Answer

It claims that hundreds of thousands of such devices were co-opted into the attack by being infected with malware.

Question 25

Five statements are given below, labelled a, b, c, d and e. Among these, four statements are in logical order and form a coherent paragraph. From the given options, choose the option that does not fit into the theme of the paragraph.

Accepted Answer

This is the endlessly fascinating question Conway's game raises, and this is why it was and remains today a much discussed favourite among mathematicians and computer scientists.

Answer

The mathematician Richard K. Guy is arguably best known for discovering a glider.Assuming that's an intriguing-enough opening, let me explain. In 1970, the British mathematician John Conway invented a board game called, simply, "Life".

Answer

Life happens on a grid of squares that stretch in every direction (imagine an infinite chessboard). Each square, or cell, is either alive or dead (or call it black or white, filled or empty).

Answer

Now, this is not a game in the conventional sense: there's no way to "win", nor do you play against an opponent. In fact, Life doesn't even need a player as it proceeds. You just set up an initial state and then watch what happens

Answer

To start, you choose a certain number of cells to be live-at random, or in a pattern, whatever. Each cell now evolves according to a set of rules that considers its eight neighbours (left, right, above, below, and on the four corners).

Question 26

In each of the following sentences four options are given. You are needed to identify the best way of writing the sentence in context of the correct usage of standard written English. The entire cast and crew of the film, enjoyed splashing in the pool, bathing in the ocean, and, particularly, to sun bathe on the shore.

Accepted Answer

The entire cast and crew of the film, enjoyed swimming in the pool, bathing in the ocean, and, particularly, sun bathing on the shore.

Answer

The entire cast and crew of the film, enjoyed splashing in the pool, bathing in the ocean, particularly to sun bathing on the shore.

Answer

(a) The entire cast and crew of the film, enjoyed splashing in the pool, to have a bath in the ocean, and, particularly, to sun bathe on the shore

Answer

The entire cast and crew of the film, enjoyed swimming in the pool to bathe in the ocean, and, particularly sun bathing on the shore.

Question 27

In each of the following sentences four options are given. You are needed to identify the best way of writing the sentence in context of the correct usage of standard written English. No officer had ought to be put into a situation where he was to choose between his love for his family and the responsibilities accompanying his duty.

Accepted Answer

No officer should be put into a situation where he has to choose between his love for his family and the responsibilities accompanying his duty.

Answer

No officer would be put in a situation where he have to choose between his love for family and the responsibilities accompanying his duty.

Answer

No officer had ought to be put into a situation in which he has to choose between his love for his family and the responsibilities accompanying his duty.

Answer

No officer ought to be put into a situation in which he has to choose between his love for this family and the responsibilities accompanying his duty.

Question 28

In each of the following sentences four options are given. You are needed to identify the best way of writing the sentence in context of the correct usage of standard written English. Being a realist, the detective could not accept the statement of the accused that UFOs had caused the disturbance.

Accepted Answer

No error

Answer

Being a realist that he was, the detective could not accept the statement of the accused that UFOs had caused the disturbance.

Answer

Since he was a realist, the detective could not accept the statement of the accused that UFOs had caused the disturbance.

Answer

Being that he was a realist, the detective could not accept the statement of the accused that UFOs had caused the disturbance.

Answer

Realist that he was, the detective could not accept the statement of the accused that UFOs had caused the disturbance.

Question 29

In each of the following sentences four options are given. You are needed to identify the best way of writing the sentence in context of the correct usage of standard written English. If we cooperate together by dividing up the booty, we shall be able to work together smoothly in the future.

Accepted Answer

If we cooperate with each other by dividing the booty, we shall be able to work together smoothly in the future.

Answer

If we cooperate with one other by dividing up the booty, we will be able to work smoothly together in future.

Answer

If we cooperate by dividing up the booty, we shall be able to work together smoothly in the future.

Answer

If we cooperate by dividing up the booty together, we shall be able to work together smoothly in the future.

Question 30

Which of the words/phrases (a), (b), (c) and (d) given below should replace the words/phrases given in bold in the following sentences to make it meaningful and grammatically correct. If the sentence is correct as it is and 'No correction is required', mark (e) as the answer. A very stout, ridged, hairy stem, the petioled leaves compounded of three broadly ovate, lobed and saw-edged divisions, downy on the underside, and the great umbels, which sometimes measure a foot across, all bear out the general impression of a Hercules of the fields.

Accepted Answer

None of these

Answer

bracken, comprised, flower, bear out

Answer

stemmed, composited, cluster, borne off

Answer

axis, consist, species, bore

Answer

rooted, embraced, flora, bear

Question 31

Which of the words/phrases (a), (b), (c) and (d) given below should replace the words/phrases given in bold in the following sentences to make it meaningful and grammatically correct. If the sentence is correct as it is and 'No correction is required', mark (e) as the answer. The judge charged him with a penalty rather than a prison sentence yet it was his first misdemeanour.

Accepted Answer

let him off, fine, since, offence.

Answer

indicted him, penance, as, mistake

Answer

freed him, sanctions, because , fault

Answer

vindicated him off, penalty, even though, wrongdoing

Question 32

Which of the words/phrases (a), (b), (c) and (d) given below should replace the words/phrases given in bold in the following sentences to make it meaningful and grammatically correct. If the sentence is correct as it is and 'No correction is required', mark (e) as the answer. Following the footsteps of many of his predecessors, he promptly accorded his election "capitulation" as a/ an infraction on the divinely granted prerogatives of the Holy See.

Accepted Answer

example, repudiated , infringement, bestowed

Answer

pavement, adhered, dereliction, bequeath

Answer

ideals, abjured, preservation, conferred

Answer

specimen, forbeared, contravention, entrusted

Question 33

Which of the words/phrases (a), (b), (c) and (d) given below should replace the words/phrases given in bold in the following sentences to make it meaningful and grammatically correct. If the sentence is correct as it is and 'No correction is required', mark (e) as the answer. 'We perceive data science and data engineering looming as job roles this year. In harmony with the current trend, technical roles such as software developer and non-technical role such as digital marketing took top two spots as the most popular job wholes,' Aspiring Minds Co- Founder and CEO Himanshu Aggarwal said.

Accepted Answer

see, emerging, In line with, categories

Answer

notice, receding, In step with, levels

Answer

recognize, dawning , In compliance with, searches

Answer

cloak, appearing, In accordance with, types

Question 34

Which of the words/phrases (a), (b), (c) and (d) given below should replace the words/phrases given in bold in the following sentences to make it meaningful and grammatically correct. If the sentence is correct as it is and 'No correction is required', mark (e) as the answer. The EU inquired to the crisis by implementing a series of financial relief mechanisms, such as the European Financial Stability Fund and the European Stability Mechanism, to furnish emergency loans to those countries most affected by advancing interest rates.

Accepted Answer

responded, support, provide, skyrocketing

Answer

reacted, sustain, divest, mounting

Answer

rebutted, aid, deliver, plummeting, escalating

Answer

excavated, support, disburse, spiraling

Question 35

Sentences given in each question, when properly sequenced form a coherent paragraph. Each sentence is labeled with a letter. Choose the most logical order of sentences amongst the five choices given to construct a paragraph. (a) The newspaper man, the flower seller, the milkman, the sweeper, they are all privy to the chatting and sharing of news that the elderly find comforting.

(b) When we remove them from their homes, it is not only the family that they are being removed from, but all those other people that they see every day and whose joys and woes become their own.

(c) In our system of living, the elderly at home have a circle of acquaintances, and friends. The loneliness of the discarded elderly is manifold.

(d) When we forcibly remove people from surroundings they have been part of for decades we put an un-mendable tear in the fabric of their lives.

Accepted Answer

DECAB

Answer

ABDCE

Answer

ECADB

Answer

DBAEC

Question 36

Sentences given in each question, when properly sequenced form a coherent paragraph. Each sentence is labeled with a letter. Choose the most logical order of sentences amongst the five choices given to construct a paragraph. (a) Some of the worst cancers aren't detected by screening.

(b) The only way to be sure is to look at the results of randomized trials comparing cancer deaths in screened and unscreened people.

(c) So how can we be confident that getting a screening test regularly is a good idea?

(d) Even when screening "works" in such trials, the size of the benefit observed is surprisingly low: Generally, regular screening reduces fatalities from various cancers between 15 percent and 25 percent.

(e) They appear suddenly, between regular screenings, and are difficult to treat because they are so aggressive.

Accepted Answer

AECBD

Answer

DBAEC

Answer

ADBEC

Answer

ACBED

Question 37

Read each of the following four sentences to find out whether there is any grammatical mistake/error in it. Choose the sentence with no grammatical error as the correct answer. If all of the given sentences are grammatically incorrect, mark (e) as an answer.

Accepted Answer

Every modern society depends on the trust in the skills and ethics of a variety of institutions such as schools and colleges, hospital and markets.

Answer

John Wanamaker, founder of the stores that bear his name, once confessed, I learnt 30 year ago that it is foolish to scold.

Answer

Whether rich or poor, American or Indian, we all have the same emotions deep with us.

Answer

This research indicate that we can no longer avoid significant warning during this century.

Question 38

Read each of the following four sentences to find out whether there is any grammatical mistake/error in it. Choose the sentence with no grammatical error as the correct answer. If all of the given sentences are grammatically incorrect, mark (e) as an answer.

Accepted Answer

Many of us have learnt not to make a public display of our emotions, particularly when they are negative.

Answer

Though Indians have been increasingly taking up corner office in the international companies, Rahul is the first Indian to lead one of the top four accounting firms globally.

Answer

Democracy was suspended not because it came under existential threat but because it has become an obstacle to political ambitions trotted out as the nation's solution.

Answer

A virtual takeover of a bankrupt civil society by a coterie of individuals whom cornered tremendous power by being able to represent the state.

Question 39

Read each of the following four sentences to find out whether there is any grammatical mistake/error in it. Choose the sentence with no grammatical error as the correct answer. If all of the given sentences are grammatically incorrect, mark (e) as an answer.

Accepted Answer

Our emission standards are one-tenth that of global averages and far more stringent than even Europe.

Answer

India has decided do away with the practice of put each imported food consignment through lab checks and switch to the international norm of random and risk based inspections.

Answer

SP Sumit singh , along with Devesh Panday and DSP Hasan, headed separate terms that include cops from six police stations and investigators from the district police crime cell.

Answer

The university has received about 500 applicants for the course, out of them 50 will be shortlisted for the programme.

Question 40

Read each of the following four sentences to find out whether there is any grammatical mistake/error in it. Choose the sentence with no grammatical error as the correct answer. If all of the given sentences are grammatically incorrect, mark (e) as an answer.

Accepted Answer

Fasting not only deoxifies the system but also gives a person training in endurance, a spirit of acceptance and self control.

Answer

The Reserve bank of India lifted the ban upon imports of gold coins and medallions by banks and trading houses.

Answer

President Pranab Mukherjee inaugurated Indian international trade fair 2016 in Pragati maiden in new Delhi.

Answer

Three Indian, two women and one man were among the shortlisted 100 applicants whom were chosen for one-way trip to mars under one mission.

IBPS Clerk – IBPS Clerk Mains 2016, Test - 2

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