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The Mint Opinion

These Questions Completely based on Single “The Hindu” Editorial. The purpose to start this is to make you read the same paragraph again and again to understand the different types of questions like comprehension, cloze test, sentence arrangement, sentence improvement, vocab, antonyms, synonyms, fillers (all based on single paragraph) etc. reading this paragraph while practicing these questions will help you understand “The Hindu” Editorial Deeply which will help you in Every exam.


The Hindu: 08 August 2019

RBI’s Goldilocks cut: On repo rate cut

The government must now unleash measures to boost growth

Faced with slowing GDP growth and encouraged by benign inflationary trends, the Reserve Bank of India (RBI) has delivered a Goldilocks cut of 35 basis points in the benchmark repo rate. Though a rate cut was a foregone conclusion ahead of the monetary policy announcement, the expectation was of either a 25 or 50 basis points one. Given the extent of the slowdown in the economy, the Monetary Policy Committee (MPC) deemed the former as too low but taking into account factors such as the turbulence in the global financial markets and the rupee’s fall in the last few days, the latter was seen as too high. In the event, the MPC settled on a median and unconventional 35 basis point cut, which keeps the powder dry for further cuts this financial year. With this, the RBI has cut rates in four consecutive policy announcements beginning February this year, aggregating to a total of 110 basis points. But the transmission by banks to lenders has not been even a third of this. The central bank says that banks have passed on just 29 basis points which is poor indeed. One factor inhibiting transmission was the tight liquidity conditions until June when the RBI flooded the market — in fact, the last two months the central bank has had to absorb excess liquidity floating around. There is, therefore, reason to hope that transmission from hereon would be quicker.

The repo rate at 5.40% is now at a nine-year low and is headed lower in the next few months and could well settle at 5% or very close to that by the time this rate cutting cycle plays out. Supporting this theory is the fact that inflation is projected to be benign for the next one year. Growth, on the other hand, is expected to be weak and the MPC has revised downwards the projected GDP growth rate for this fiscal to 6.9% from 7% earlier, with downside risks. Even this appears optimistic given the current impulses in the economy and it is very likely that GDP growth this fiscal will be closer to 6.5%. With the latest cut, the RBI has signified that it is willing to do the heavy lifting. But this alone will not suffice as cost of capital is just one aspect that determines investment. The government has to play its part too in boosting growth. Arguably, the space for fiscal concessions is limited given the overall revenue scenario, but the government can certainly push for further reforms to incentivise investment without impacting its fiscal arithmetic. The slowdown now is part cyclical — which can be addressed by a rate cut — and part structural, for which reforms are an absolute necessity. Therefore, unless the government responds with its own measures, the RBI’s efforts to support growth may go in vain.

Directions (1-3) Choose the similar meaning

Q1. Foregone

a)cherry           b) modification   c) waive          d) cede        e) both c & d 

Q2. Benchmark

a) adjustment    b) sanguine        c)yardstick     d)all             e) None

Q3. Inhibiting

a)impede          b) renounce        c)buoyant      d)all           e) None

Directions: (4-5) choose the opposite meaning

Q4. Optimistic

a)memorize       b)pessimistic       c)revoke         d)all             e) None

Q5. Concessions

a)novel              b)cheerful         c) recantation   d)all              e) None

Direction (6-7): Which of the following phrases given below each sentence should replace the phrase printed in bold letters to make the sentence meaningfully correct. Choose the best option among the five given alternatives that reflect the correct use of phrase in the context of the grammatically correct sentence. If the sentence is correct as it is, mark “No Error” as your answer.

Q6. Given the extent of the slowdown in the economy, the Monetary Policy Committee (MPC) deemed the former as to low but taking into account factors 

a) too low                       

b) as to low               

c) as too low 

d) as too lowest               

e) None

Q7. Though a rate cut was a foregone conclusion ahead of the monetary policy announcement, the expectation was of either a 25 and 50 basis points one.

a) either a 25 or 50             

b) either 25 and 50                 

c) both a 25 or 50 

d) either a 25 not 50               

e) None

Directions (8-10): In the passage given below there are blanks which are numbered from 8 to 10. They are to be filled with the options given below the passage against each of the respective numbers. Find out the appropriate word in each case which can most suitably complete the sentence without altering its meaning. If none of the words given in options fits in, mark ‘None of these’ as your answer choice.

With this, the RBI has cut rates in four ……8…….. policy announcements beginning February this year, aggregating to a total of 110 basis points. But the ……9…… by banks to lenders has not been even a third of this. The central bank says that banks have passed on just 29 basis points which is poor…….10……. 

Q8. 

a)novel     

b) dispatch         

c) consecutive     

d) all         

e) None

Q9. 

a)engine     

b)transmission         

c)uninterrupted       

d) all       

e) None

Q10. 

a) conveyance     

b) unbroken         

c) indeed     

d) all       

e) None

Directions (11-12): Read each of the following sentences to find out if there is any grammatical error in it. The error, if any, will be in one part of the sentence. The number (A, B, C or d) of this part is your answer. If there is no error in the statement, then mark option (e) as your answer choice.

Q11. There is(a)/ therefore, reason(b)/ to hope that transmission(c)/ from hereon would be quicker(d)/(e)/

a) a              b) b                 c) c                     d) d                   e) e

Q12. Therefore, untill(a)/ the government responds(b)/ with its own measures,(c)/ the RBI’s efforts to support growth may go in vain(d)/(e)/

a) a              b) b                 c) c                     d) d                   e) e

Directions (13-15): Rearrange the following sentences (a), (b), (c), (d), and (e) in the proper sequence to form a meaningful paragraph and then answer the questions given below.

a) But this alone will not suffice as cost of capital is just one aspect that determines investment. 

b) Even this appears optimistic given the current impulses in the economy and it is very likely that GDP growth this fiscal will be closer to 6.5%. 

c) With the latest cut, the RBI has signified that it is willing to do the heavy lifting.   

d) Supporting this theory is the fact that inflation is projected to be benign for the next one year. 

e) Growth, on the other hand, is expected to be weak and the MPC has revised downwards the projected GDP growth rate for this fiscal to 6.9% from 7% earlier, with downside risks. 

Q13. Which is the Second step after rearrangement?

a) A          b) B           c) C           d) D          e) E  

Q14. Which is the Third step after rearrangement?

a) A         b) B            c) C           d) D          e) E

Q15. Which is the Fourth step after rearrangement?

a) A        b) B             c) C          d) D           e) E

Directions (16-17): In each of the following sentences, there is a blank space. Below each such sentence, there are four options with one word each. Fill up the blank with the word that makes the sentence grammatically and contextually correct. If none of the four words is your answer, choose option (e) as your answer choice.

Q16. Arguably, the space for fiscal concessions is limited given the overall revenue ………., but the government can certainly push for further reforms to incentivise investment without impacting its fiscal arithmetic. 

a) denoting       

b) especially       

c) scenario     

d) All       

e) None

Q17. In the event, the MPC settled on a ………..and unconventional 35 basis point cut, which keeps the powder dry for further cuts this financial year. 

a) median         

b) goldilocks         

c) scheme       

d) All     

e) None

Directions (18-20): Answer the questions given below based on the passage.

Q18. According to RBI how much basis points other banks have passed?

a)25            b)29          c)35           d)All         e) None

Q19. According to passage how RBI efforts for growth can be fruitless?

a) Government’s investment should be increase     

b) government should intro its measures   

c) GDP growth this fiscal should be closer to 6.5%         

d) All   

e) None

Q20. Which of the following statements is/are true in context of the passage above?

(I)  repo rate at 5.40% is now at a nine-year low   

(II)  MPC lowerd the GDP growth by 7%.  

(III) MPC settled on a median and unconventional 25 basis point cut

a) Only (I)       

b) Both (I) and (II)     

c) Both (II) and (III)     

d) All are incorrect   

e) None

 

Answers With Explanation

 

Ans.1, d it means go without (something desirable).

 

Ans.2, c it means a standard or point of reference against which things may be compared.

 

Ans.3, a it means hinder, restrain, or prevent (an action or process).

 

Ans.4, b Optimistic means hopeful and confident about the future. Pessimistic means tending to see the worst aspect of things or believe that the worst will happen.

 

Ans.5, c concession means a thing that is granted, especially in response to demands. Recantation to withdraw or repudiate (a statement or belief) formally and publicly

 

Ans.6, c To is a preposition with several meanings, including “toward” and “until.”

Too is an adverb that can mean “excessively” or “also.”

Gill’s having chicken. I’ll probably have chicken too.

 

Ans.7, a Either … or … is used as a conjunction. It is used to express alternatives and or a choice between two (and sometimes more) things. It is used a verb in singular form (Sometimes you will hear it used in the plural form though it is not grammatically correct).

Either you or John has to finish the report before 5pm.

You can have either the red shirt or the blue shirt. 

 

Ans.8, c it means following each other continuously.

 

Ans.9, b it means the action or process of transmitting something or the state of being transmitted.

 

Ans.10, c it means used to emphasize a statement or response confirming something already suggested.

 

Ans.11, b The adverb therefore should be used with caution, as it is often at the center of run-on sentences. Therefore is not conventionally considered a conjunction, so it cannot fuse two independent clauses into a single sentence the way conjunctions like and, but, and because can.

For ex: The players were my heroes, therefore, my dad was my hero because he was the coach. 

 

Ans.12, a The word “until” is a conjunction that is used to refer to the time that took place or passed before an event or incident. 

The word “unless,” on the other hand, is a conjunction that is used to refer to a condition which makes the event or incident that precedes it impossible. 

Example : Unless you let him have the dog, he will not go away

 

Ans.13, e is correct. Because correct sequence is DEBCA.

 

Ans.14, b is correct.

 

Ans.15, c is correct.

 

Ans.16, c it means a written outline of a film, novel, or stage work giving details of the plot and individual scenes.

 

Ans.17, a it means denoting or relating to a value or quantity lying at the midpoint of a frequency distribution of observed values or quantities, such that there is an equal probability of falling above or below it.

 

Ans.18, b according to passage b is correct.

 

Ans.19, b according to passage b is correct.

 

Ans.20, a according to passage a is correct.

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