Dear Readers,
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.
It is now a matter of time before interest rates are decided by a new monetary policy committee (MPC) rather than the Reserve Bank of India (RBI) governor acting on his own. The government announced the names of three economists who will be its nominees on the MPC. The central bank had earlier announced its three nominees as well. India will now be among the many countries where interest rates are set by a committee rather than an individual.
A lot now depends on how the MPC operates. There are several issues that need to be sorted out to ensure that the shift to the new system of deciding monetary policy is indeed worth it. First, all members of the MPC should have access to the same amount of information. What this means in practice is that the external members should have open access to the research done by central bank economists. Members of the old technical advisory committee have often in private complained about the lack of adequate data before meetings. An MPC secretariat may need to be set up for this.
Second, the group dynamics will matter. Experiments conducted by economists show that committees take better monetary policy decisions than individuals. Yet, we must not ignore the risks from groupthink. There is little use of a committee if everybody thinks alike, or at least toes the official line. RBI’s Governor will have a big role to play in ensuring that discussions are open. Mervyn King at the Bank of England often allowed himself to be outvoted in the MPC. It would be especially welcome if the RBI members do not habitually vote as a block in the meetings. And the governor should try not to use his casting vote at least in the initial years.
There should be a robust communications policy so that other participants in the economy have a clear sense of how MPC members are thinking about the economy. The US Federal Reserve provides dot plots on how various members of its rate-setting committee assess the trajectory of interest rates. The Indian central bank is not structured like its US counterpart. But there can be no doubt that the two major components of MPC meetings—the assessments of the state of the economy followed by the actual voting on interest rates—need to be communicated well.
Third, the government will also have to let an independent MPC emerge. Its first signal has been positive, if you consider the three economists it has appointed as its representatives on the committee. A successful MPC should be able to deal with two persistent problems. First, there is the over-dependence on the economic judgement of one individual.
Q1 Choose the word most OPPOSITE in meaning to the word given in bold, as used in the passage.
Trajectory
01. Curve
02. Direction
03. Movement
04. Palpable
05. Ameliorate
Q2 Choose the word most SIMILAR in meaning to the word given in bold, as used in the passage.
Outvoted
01. Allowed
02. Permit
03. Opposition
04. Appeal
05. Approve
Q3 Choose the most appropriate title for the passage.
01. How to make the monetary policy order
02. How to make the monitor policy committee work
03. Why to make the monitor policy commitment work
04. Where to make the monetary policy committee
05. How to make the monetary policy committee work
Q4 Which one of the following statements is TRUE according to the passage?
01. The group dynamics will not matter.
02. Experiments conducted by economist show that committees take better monetary policy decisions than individuals.
03. We must ignore the risks from groupthink.
04. There is a great use of a committee if everybody thinks alike, or at least toes the official line.
05. Governor will have a smallest role to play in ensuring that discussions are open.
Q5 Which one of the following statements is NOT TRUE according to the passage?
01. Mervyn King at the Bank of England often allowed himself to be outvoted in the MPC.
02. It would be especially welcome if the RBI members habitually vote as a block in the meetings.
03. The governor should try not to use his casting vote at least in the initial years.
04. There should be a robust communications policy so that other participants in the economy have a clear sense of how MPC members are thinking about the economy.
05. The US Federal Reserve provides dot plots on how various members of its rate-setting committee assess the trajectory of interest rates.
Q-6 There should be a robust communications policy so that other participants in the economy have a clear sense of-
01. how to avoid the increase intake of antioxidant foods
02. how MPC members are thinking about the economy
03. how MPC members are making about the economy
04. how MPC members are thinking about the politics
05. how MPC members are thinking about the infrastructure
Q-7 The government will have to let-
01. An independent MTC emerge
02. An incomprehensive MLC emerge
03. An important MRC emerge
04. An independent MPC emerge
05. An independent MlC emerge
Q-8 What have the members of the old technical advisory committee often in private complained about?
01. The lack of adequate knowledge before meetings
02. The lack of perfect raw material before meetings
03. The lack of adequate data before meetings
04. The lack of money before meetings
05. The lack of proper arrangement before meetings
Q-9 Choose the word which is most nearly the OPPOSITE in meaning as the word given in bold as used in the passage.
Adequate
01. Acceptable
02. Fair
03. Inept
04. Capable
05. Competent
Q10 Choose the word which is most nearly the OPPOSITE in meaning as the word given in bold as used in the passage.
Actual
01. Certain
02. Actual
03. Physical
04. Subastantial
05. Uncertain
Answers:-
Q.1 (3)
Q.2 (3)
Q.3 (5)
Q.4 (2)
Q.5 (2)
Q.6 (2)
Q.7 (4)
Q.8 (3)
Q.9 (3)
Q.10 (5)
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