Directions (91-100) : Read the following passage carefully and answer the questions. Certain words/phrases are given in bold to help you locate them while answering some of the questions.

Brazil does not look like an economy on the verge of overheating. The IMF expects it to shrink by 3% this year, and 1% next (The country has not suffered two straight years of contraction since 1930-31). 1.2 m jobs vanished in September, unemployment has reached 7.6%, up from 4.9% a year ago. Those still in work are finding it harder to make ends meet real (ie. adjusted for inflation) wages are down 4.3% year-on-year. Despite the weak economy, inflation is nudging double digits. The central bank recently conceded that it will miss its 4.5% inflation target next year. Markets don’t expect it to be met before 2019. If fast-rising prices are simply a passing effect of the Brazilian real (R$) recent fall, which has pushed up the cost of imported goods, then they are not too troubling. But some ‘economists have a more alarming explanation: that Brazil’s budgetary woes are so extreme that they have undermined the central bank's power to fight inflation-a phenomenon known, as fiscal dominance.

The immediate causes of Brazil’s troubles are external: the weak world economy, and China’s faltering appetite for oil and iron are in particular, have enfeebled both exports and investment. But much of the country’s pain is self-inflicted. The president could have used the commodity windfall from the first term in 2011-14 to trim the bloated state, which swallows 36% of GDP in taxes despite offering few decent public services in return. Instead handouts, subsidised loans and costly tax breaks for favoured industries were splurged on. These fuelled a consumption boom, and with it inflation, while hiding the economy’s underlying weaknesses: thick red tape, impenetrable taxes, an unskilled workforce and shoddy infrastructure. The government’s profligacy also left the public finances in tatters. The primary balance (before interest payments) went from a surplus of 3.1% of GDP in 2011 to a forecast deficit of 0.9% this year. In the same period public debt has swollen to 65% of GDP, an increase of 13 percentage points. That is lower than in many rich countries, but Brazil pays much higher interest on its debt. It will spend 8.5% of GDP this year servicing it, more than any other big country. In September it lost its investment-grade credit rating.

Stagflation of the sort Brazil is experiencing presents central bankers with a dilemma. Raising interest rates to quell inflation might push the economy deeper into recession; lowering them to faster growth might send inflation spiralling out of control. ‘ Between October last year and July this year, the country’s rate-setters seemed to prioritise price stability, raising the l benchmark Selic rate by three percentage points, to 14.25%, where it remains. The alluring real rates of almost 5% ought to have made the Brazilian Real attractive to investors. Instead, the currency has weakened and rising inflation despite higher interest rates, combined with a doubling of debt-servicing costs in the past three years has led to the diagnosis of fiscal dominance. The cost of servicing Brazil’s debts has become so high, that rates have to be set to keep it manageable rather than to rein in prices. That, in turn, leads to a vicious circle of a falling currency and rising inflation. There is no question. however, that Brazilian monetary policy is at best hobbled. State-owned banks have extended nearly half the country's credit at low. Subsidised rates that bear little relation to the Selic-at a cost of more than 40 billion R$ ($10 billion) a year to the taxpayer. As private banks have cut lending in the past year, public ones have continued to expand their loan books. All this hampers monetary policy and if left unchecked, this spurt of lending may itself threaten price stability. 

Choose the word which is most opposite in meaning to the word SPURT given in bold as used in the passage.


A) Swell

B) Drop

C) Stream

D) Leak

E) Glush

Correct Answer:
B) Drop


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Similar Questions
1). Choose the word which is most nearly the same in meaning to the word FUELLED given in bold as used in the passage.
A). Patrolled
B). Publicised
C). Convinced
D). Reproduced
E). Stimulated
-- View Answer
2). Which of the following describes the global perception of Brazil's economy?
A). The economy is strong and need of more government investments in industries like oil.
B). The economy is overheating because of a massive commodities boom.
C). It is a political volatile country which is experiencing financial stability at present.
D). It is a good destination for investment with low interest rates.
E). None of the given options describes the global perception of Brazil's economy.
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3). Which of the following is the central idea of the passage ?
A). Brazil's central bank has managed to control inflation despite the lack of government support.
B). The state of Brazil's public finances prevents the central bank from implementing sound monetary policy.
C). Brazil's economy has strong fundamentals and will soon recover from a temporary slowdown.
D). A series of innovative and robust financial measures is helping Brazil recover its economic health.
E). Brazil is in its worst recession since 1930 as it is overexposed to economies like China which are in trouble.
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4). According to the passage, which of the following is/are a factor(s) that has/have impacted Brazil's economy ? (A) Weakening of Brazil's currency (B) Drop in demand for oil (C) Economic sanctions against it by the IMF
A). Only (A)
B). Only (B)
C). All (A), (B) and (C)
D). Only (A) and (B)
E). None of (A), (B) and (C)
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5). Which of the following is true in the context of the passage ?
A). Brazil has capitalised on its commodity windfall by raising taxes and strengthening its economy.
B). Brazil has been unfairly downgraded by investment credit rating agencies.
C). It is advisable for Brazils' central bank to immediately lower interest rates to control inflation.
D). Lowering interest rates is the only way to stabilise the economy and attract foreign investment.
E). None of the given options is true in the context of the passage.
-- View Answer


6). What do the statements regarding Brazil's GDP, quoted in p the passage, convey?
A). Brazil invests a substantial part of its GDP in infrastructure unnecessarily.
B). The economy is unbalanced with debt outweighing GDP.
C). Brazil's economy is stronger than many developed countries at present.
D). Its GDP has been gradually improving despite the Government's policies.
E). Other than those given as options.
-- View Answer
7). Choose the word which is most nearly the same in meaning to the word CONCEDED given in bold as used in the passage.
A). Imposed penalty
B). Defeated by
C). Deprived of
D). Admitted to
E). Contributed to
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8). The civic body has working/ towards ensuring zero waste dumping/ from fish markets by scientifically processing/ leftovers from these areas.
A). The civic body has working
B). towards ensuring zero waste dumping
C). from fish markets by scientifically processing
D). leftovers from these areas
E). No error
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9). Scientists have created/ the blackest material ever made,/ Which is as dark that it can absorb/ almost all light that hits it.
A). Scientists have created
B). the blackest material ever made,
C). which is as dark that it can absorb
D). almost all light that hits it.
E). No error
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10). The European Union is keen on/ seeking cooperation from/ Indian Universities in order to welcome/ more students to tap the resources available abroad.
A). The European Union is keen on
B). seeking cooperation from
C). Indian Universities in order to welcome
D). more students to tap the resources available abroad.
E). No error
-- View Answer