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Mahendras has started special quizzes for IBPS & SBI Exam so that you can practice more and more to crack the examination. This IBPS & SBI Exam special quiz series will mold your preparations in the right direction and the regular practice of these quizzes will be really very helpful in scoring good marks in the Examination. Here we are providing you the important question of reasoning ability for the IBPS & SBI Exam.
1-10. Read the following passage carefully and answer the questions given below it. Certain words have been given in bold to help you locate them while answering some questions.
India's economy is growing much below its potential in the last two years. It clocked a growth of 6.2 per cent in 2011-12 and 5 per cent in 2012-13. There is consensus amongst policymakers, analysts and academicians that the remedy to the economic woes lies in reviving the 'investment cycle'. The tight monetary policy pursued by the RBI between March 2010 and April 2012 has been a deterrent to new investment activities.
However, the RBI points to the poor investment climate rather than interest rates as the chief reason for the lack of investment appetite. This line of reasoning derives credence from the fact that real interest rates in the last three years were much lower than in the boom years of 2004-08, when investment posted fast-paced growth. So, it is worth looking into whether investment climate has really deteriorated in the past three years.
First, what is 'investment climate'? Broadly, investment climate refers to all factors that influence investment decisions. A sound investment climate provides private firms with opportunities and incentives to invest. It is shaped by structural factors such as geographical features, market size and consumer preferences at one end and government policies that have a bearing on costs, risks and barriers to competition, at the other.
Nothing much can be done to change the structural features in the short to medium term. However, costs, risks and barriers to competition can be influenced by government policy. The manner in which a government addresses provision of public goods, infrastructure, and market failures have an important bearing on the costs a firm faces, apart from the time involved in complying with regulatory requirements.
In this context, poor contract enforcement can amount to over 25 per cent of sales or more than three times what firms typically pay in the form of taxes. In addition, firms attach a lot of importance to risks associated with protection of property rights, policy uncertainty, macro-economic instability and interpretation of laws. Further, the government can influence competitive pressure through its regulation of market entry and exit and its response to anti-competitive behaviour by firms. As such, improving the investment climate involves reducing unjustified costs, risks and barriers to competition.
1 Which of the following can be over one fourth of sales or over thrice the amount firms pay in the form of taxes?
01. Strong competitive forces
02. Poor contract enforcement
03. Poor infrastructure
04. Decreased buying power
05. Not mentioned in the passage
2 Choose the word most similar in meaning to the word given in bold, as used in the passage.
Tight
01. Stable
02. Established
03. Arduous
04. Upsetting
05. Strict
3 Choose the word most similar in meaning to the word given in bold, as used in the passage.
Sound
01. Wholesome
02. Substantial
03. Loyal
04. Favourable
05. Authoritative
4 Choose the word most similar in meaning to the word given in bold, as used in the passage
Consensus
01. Block
02. Consent
03. Deplore
04. Amateur
05. Living
5 Choose the word most similar in meaning to the word given in bold, as used in the passage.
Regulation
01. Vilification
02. Outcast
03. Control
04. Performance
05. Analysis
6 What is the reason behind India's poor economic growth in the recent years?
01. Dismal scenario on the investment aspect from Foreign Institutional Investors.
02. Decreasing returns and increasing competition have led to the failure of many organizations.
03. India's increased budget allocation to strengthen the defense sector.
04. Unfavourable monetary policy for new investment activities.
05. Not mentioned in the passage
7 Which of the following factors form the investment climate?
A. Consumer preferences
B. Economic stability of the buyer
C. Geographical features
D. Government policies
E. Market size
01. All except D
02. All except A
03. All except B
04. All except E
05. All of the above
8 Which of the following is FALSE according to the passage?
01. Improving the investment climate involves reducing unjustified costs, risks and barriers to competition.
02. India's economy recorded growth of 5 percent in 2011-12
03. Much cannot be done to change the structural features in the short to medium term.
04. A sound investment climate is shaped by structural factors.
05. The government can affect competitive pressure through its regulation of market entry and exit
9 How is the RBI's viewpoint, about the investment scenario, different from that of policymakers and analysts?
01. The RBI feels that changes in monetary policy are crucial to boost investment whereas others think whereas others feel this move would not bring about desired results.
02. According to the RBI, poor investment climate is responsible for poor investment not the interest rates.
03. According to the RBI, incentives should be provided to new investors for encouragement but others do not agree to it.
04. Savings should be encouraged to enable investment, according to the RBI, but others feel it will lower investment.
05. Their viewpoints are quite similar
10 What is meant by 'investment climate'?
01. Attitude of people towards investment
02. Possibilities of getting higher returns
03. Type of competition in the market
04. Availability of funds for the purpose of investment
05. Factors affecting investment decision
Answers:-
Q.1 (2)
Q.2 (5)
Q.3 (4)
Q.4 (3)
Q.5 (2)
Q.6 (5)
Q.7 (3)
Q.8 (2)
Q.9 (2)
Q.10 (5)
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