English Reading Comprehension for SBI Clerk/PO 2018 (Day-85)

Dear Readers, Here we have given Practice English Reading Comprehension quiz and questions for SBI Clerk/PO 2018 Exams with detailed explanation. Candidates those who are preparing for Upcoming Bank Exams can make use of it.

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Direction (1-10): Read the passage carefully and answer the following questions.

Spectacular economic growth over the past three decades has made India a global economic powerhouse. The Indian economy is now the third largest in the world by purchasing power parity after China and the United States.

The surging economic growth has improved living conditions of its citizens, but these improvements were not uniformly distributed among India’s diverse population. Despite being among the richest countries in the world, India has attracted negative attention in recent years as the second most unequal country in the world, after Russia.

Income inequality is the unequal distribution of household or individual income across the various participants in an economy. It is often presented as the percentage of income related to a percentage of the population.

Income inequality has become increasingly evident since the 1980s when 30 to 35% of national income went to the top 10% of earners. Since then, the percent of income going to the top 10% has increased to 50% creating a huge disparity between high earners and low earners.

The problem of inequality in the distribution of income and wealth has gained much importance in India.

There are many reasons attributed to this unequal distribution of income and resources in India. Poor policies by the government top the list of why there is high inequality in income distribution in India. It can also be said that unemployment and underemployment are the reasons for low level of income of the majority of Indian people. Low la­bour productivity implies low rate of economic growth which is the main cause of poverty and economic inequality. In fact, inequality, poverty and unemployment are inter­related.

Another cause of income  inequality is inflation. During inflation, few profit earners gain and most wages earners lose. This is exactly what happens in India.

Since wages have lagged behind prices, profits have increased. This has cre­ated more and more inequality. Moreover, during inflation, money income increases no doubt but real income falls. And this leads to a fall in the standard of living of the poor people since their purchasing power falls.

Money income is that part of your salary that is paid out in cash. It is your income in actual currency terms unadjusted for what is termed as inflation. Inflation refers to the increase in the general price of goods and services, more technically known as the Consumer Price Index or CPI. Real income is simply inflation-adjusted income.

 A consumer price index (CPI) measures changes in the price level of market basket of consumer goods and services purchased by households. The most common use of the CPI is as an indicator of the economy’s price level, and perhaps even more importantly, as a means of estimating the rate of inflation. Together with the unemployment rate, the CPI-based inflation rate provides economists, business leaders, and government policy makers with two readily available (as in monthly), indicators of business cycle activity. Rising inflation rates and falling unemployment rates are the hallmark of business-cycle expansions. Falling inflation rates and rising unemployment rates are the signs of business-cycle contractions. CPI also viewed as an indicator of the effectiveness of government economic policy.

No doubt, inequality has increased due to rise in prices. During inflation workers in the or­ganised sector get higher wages which partly off­set the effect of price rise. But wages and salaries of workers in unorganised sectors (such as agri­culture and small-scale and cottage industries) do not increase. So their real income (purchase in­come) falls. This is how inequality in the distri­bution of income increases between the two ma­jor sectors of the economy — organised and un­organised.

Inequalities in personal income has also resulted from inequality in professional competence, knowledge and training. The sort of inequalities has also its root in the unequal distribution of wealth and private property. Children belonging to higher or elite class of society have easy access to higher and professional education which the children of lower strata of society cannot even dream.

On the other hand, credit policies of commercial and development banks and other financial institutions are silently favouring the big producers, the large companies and large scale enterprises are having easy access in the capital market for raising adequate quantity of equity capital. All these have resulted concentration of capital in the hands of few large industrial houses.

This is also true that various measures have been adopted by the Government to reduce in­equality in the distribution of income. Like, the payment of bonus (called annual payment) has been made compulsory in every industry. In order to reduce the income inequalities, the control of monopolies is considered as an important step. Under the present regime of liberalization of the industrial sector, the monopoly trends are likely to be strengthened further and thereby economic disparities may aggravate further. Designing the tax structure has been considered as an important tool in the hands of government to reduce the unequal distribution of wealth in a country like India. Moreover, various self-employment projects have been taken both in rural and urban areas to solve the growing unemployment problem.

Finally, various types of transfer payments (such as unemploy­ment, compensation, soft loans, pensions to free­dom fighters, concessions to senior citizens, etc.) have been made for improving the welfare of cer­tain weaker sections of the society.

 

1) According to the passage, what has not been promoting the economic inequalities in the country?

a) inequalities in Professional Knowledge and Training

b) growing Unemployment

c) inflationary rise in prices

d) private ownership of industries and trade

e) credit Policy of Banks and Financial Institutions

2) According to the passage, which of the followings will not be counted as the function of the Consumer Price Index (CPI)?

a) helps in estimating the inflation rate

b) helps in calculating domestic savings of the country

c) estimates the changes in the price of goods & services purchased by households

d) indicator of business activity

e) estimates the usefulness of government policies

3) According to the passage, what has been considered as a most effective measure through which government can control the unequal distribution of income and wealth in the country?

a) self employment programmes

b) effective taxation policy

c) control over monopolies in the economy

d) transfer payments

e) upliftment of the rural poor

4) According to the passage, which of the followings has been pointed out as one of the major causes of economic (income) inequalities in the country?

a) underemployment

b) tax evasion

c) faulty government policies

d) new agricultural strategy

e) inflation

5) Which of the following statements is true in the context of the passage?

a) falling inflation rates and rising unemployment rates are the signs of business-cycle expansion.

b) money income is that part of your salary that is paid out in cash.

c) illiteracy, poverty and unemployment are inter­related

d) None of the above

e) All are true

6) Find the incorrect statement on the basis of the given passage?

a) real income is simply inflation-adjusted income

b) the payment of bonus has been made compulsory in every industry

c) common use of the CPI is as an indicator of the economy’s price level

d) during inflation, wages and salaries of workers in organized sectors do not increase

e) all are correct

7) Choose the word which as same meaning as the word surging

a) retreating

b) declining

c) moribund

d) waning

e) swelling

8) Choose the word which as same meaning as the word off­set

a) disparity

b) disproportion

c) recompense

d) unevenness

e) inconsistency

9) Choose the word which as opposite meaning as the word aggravate

a) worsen

b) intensify

c) exacerbate

d) assuage

e) exaggerate

10) Choose the word which as opposite meaning as the word contraction

a) retrenchment

b) curb

c) augmentation

d) cutback

e) economizing

Answers:

1. Correct Answer is: d)

According to the passage, private ownership of industries and trade has not been promoting the income equality in the country as this factor has not been explained in the passage.

2. Correct Answer is: b)

According to the passage, CPI does not help in calculating the domestic savings as it is not given in the passage.

3. Correct Answer is: b)

It is mentioned in the passage that effective tax structure is the most important tool through which government can control the economic inequalities in the country

4. Correct Answer is: c)

It is clearly mentioned in the passage that poor government policies are one of the major causes of economic inequalities in the country.

5. Correct Answer is: b)

According to the passage, true statement is “money income is that part of your salary that is paid out in cash.”

6. Correct Answer is: d)

It is clearly mentioned in the passage, that during inflation, workers in the organized sector get higher wages but wages and salaries of workers in unorganized sectors (such as agri­culture and small-scale and cottage industries) do not increase.

7. Correct Answer is: e)

The meaning of “surging” is “swelling / flourishing”.

8. Correct Answer is: c)

The meaning of “off­set” is “compensate / balance /recompense”.

9. Correct Answer is: d)

The meaning of “aggravate” is “make worse / intensify” and its opposite is “assuage / alleviate”.

10. Correct Answer is: c)

The meaning of “contraction” is “reduction / curb” and its opposite is “augmentation / increase /expansion”.

Daily Practice Test Schedule | Good Luck

Topic Daily Publishing Time
Daily News Papers & Editorials 8.00 AM
Current Affairs Quiz 9.00 AM
Quantitative Aptitude “20-20” 11.00 AM
Vocabulary (Based on The Hindu) 12.00 PM
General Awareness “20-20” 1.00 PM
English Language “20-20” 2.00 PM
Reasoning Puzzles & Seating 4.00 PM
Daily Current Affairs Updates 5.00 PM
Data Interpretation / Application Sums (Topic Wise) 6.00 PM
Reasoning Ability “20-20” 7.00 PM
English Language (New Pattern Questions) 8.00 PM

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