Reading Comprehension for SBI Clerk Prelims Set – 52

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Reading Comprehension for IBPS Clerk Mains. Welcome to the www.letsstudytogether.co online English section. If you are preparing for SBI Clerk 2018 exam, you will come across a section on the English language. Here we are providing you Reading Comprehension for SBI Clerk Prelims & Mains and Syndicate PO based on the latest pattern of your daily practice.

Reading Comprehension for IBPS Clerk Mains will help you learn concepts on important topics in English Section.This “High Level Reading Comprehension” is also important for other banking exams such as IBPS PO, IBPS Clerk, SBI Clerk, IBPS RRB Officer, IBPS RRB Office Assistant, IBPS SO, SBI SO and other competitive exams.

 Reading Comprehension for SBI Clerk : Set – 51


Directions: Read the following passage carefully and answer the questions. Certain words are in bold to help you locate them while answering some of the questions.
Anyone who shops knows the cost of food is on the rise. Our grocery bills rise because the prices of key staple are on an upward trend that shows no sign of abating. When food suddenly costs more, those who can least afford it get hit hardest. On average, Canadians spend less than ten percent of their income on food. However, people living in poverty spend 50 percent and the poorest as much as 75 percent of their income on food. When prices mushroom, these people must do without, and it is women who most frequently eat last and least.The current global food situation is very serious and hence, we need to understand the reasons for such a dramatic increase in food prices in a short period.
It is argued that increases in energy costs are resulting in cost push inflation but the contribution of energy costs to overall costs in agriculture may not explain the huge increase in food prices.
Related to the current elevated energy prices, there has been a diversion of corn and edible oils to bio-fuels, which is significantly influenced by policy mandates. Very clearly this diversion to bio-fuels is a policy induced new reality, which coincided with price escalation in precisely those products and hence, is noteworthy.
The financialization of commodity trade and current extraordinary conditions in global financial markets could have influenced the spurt in prices. The recent reductions in interest rates in the U.S. and the injection of liquidity have resulted in investors seeking new avenues such as commodity markets, in view of the turbulence in financial markets and the low returns in treasuries. The relatively easy liquidity and low interest rates, by themselves, make holding of inventories attractive and thus induce greater volatility in commodity markets. The weakening of the U.S. dollar is also advanced as a reason for the recent volatility in commodity markets, including food items. It is evident that thisphenomenon is now also coinciding with the across the board rise in food prices.
In brief, while there are demand and supply side pressures on food items, there is considerable merit in the argument that the recent extraordinary increases in food prices are closely linked to public policy responses to high energy costs in advanced economies, and the turbulence in financial markets and financial institutions. It is said that the impact of such policy induced diversion of food to bio-fuels is significant at this juncture and reflects a preference to fill the fuel tanks of automobiles rather than fill the empty stomachs of people. Similarly, it is sometimes held that the weight accorded to financial stability in public policy may now be at the expense of stability in real sector – especially of sensitive commodities like food. At the same time, there is a general consensus that public policy in regard to food in many economies around the world has not provided adequate incentive to farmers to increase the supply of food and other agricultural products to comfortably match the growing demand over the medium term.

1.The passage lays emphasis on which of the following theme(s)?

(A) The abysmally throwaway prices offered for food commodities.
(B) The worldwide acute shortage of food commodities.
(C) Promoting the use of bio-fuel for automobiles.

A. A only

B. B only

C. C only

D. All the three

E. None of these

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B. B only

2.In what way are bio-fuels responsible for the increasing cost of food?

(A) It is a policy mandated to use bio-fuel in place of petroleum products especially in developing countries.
(B) Certain food commodities are being used for manufacturing alternative fuels.
(C) The low cost of bio-fuels has created fluctuation in prices of other agricultural commodities.

A. A only

B. B only

C. C only

D. A and B only

E. None of these

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B. B only. Refer the third paragraph

3.Which of the following situation(s) has/have prompted investors to look towards commodity markets?

(A) Low interest rates in the U.S.
(B) Easy liquidity
(C) Volatility in commodity prices

A. A and B only

B. B and C only

C. A and C only

D. All the three

E. None of these

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A. A and B only. Referring the fourth paragraph.

4.Which of the following shows a cause-effect relationship between its two components?

A. Reduction in interest rates and abundance of food commodities

B. Reduction in energy prices and increase in food commodity prices.

C. Turbulence in financial markets and escalation in production of food commodities.

D. Dipping of U.S. dollar value and volatility in commodity markets

E. Injection of liquidity and the drop in investor confidence.

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D. Dipping of U.S. dollar value and volatility in commodity markets. Refers to the fourth paragraph of the passage

5.Which of the following can be inferred from the passage?

(A) At present the demand for food items exceeds the supply.
(B) Fuel production has been given higher priority than caring for the millions who are starving.
(C) Farmers have not been motivated to increase their production of food.

A. A and B only

B. B and C only

C. A and C only

D. None of these

E. All A, B & C

Show Correct Answers

The given passage highlights that at present, the demand for food items is higher as compared to the supply of food items. Also, the preference has shifted from filling the empty stomach to filling the fuel tank of automobiles. Furthermore, farmers are not provided with adequate incentives to increase the supply of food and agricultural products. So option E is correct answer. 

6.Which of the following can be a remedy for the global situation mentioned in the passage?

(A) Reducing the production of cars and thereby the demand for energy.
(B) Inducing farmers to increase their food and other agricultural products.
(C) Increasing the prices of food items to compensate farmers for their losses.

A. A only

B. A and B only

C. B only

D. B and C only

E. None of these

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C. B only

According to the passage, the current global situation is very serious and food prices are increasing drastically. To overcome the escalation in food prices, farmers should be motivated and provided with adequate incentives to increase the supply of food and agricultural products. Hence Option B is the correct answer.

7.Which of the following statements is TRUE in the context of the passage?

A. Commodity markets have become erratic due to easy liquidity and low interest rate.

B. Governments of many countries have begun paying better prices for food commodities to ensure their farmers are taken care of.

C. Farmers in developing countries have to compulsorily produce a certain quantity of bio-fuels annually.

D. The financialization of commodity trade has resulted in a dip in prices of food products.

E. The weakening of other currencies against the US dollar has resulted in high fuel prices.

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A. Commodity markets have become erratic due to easy liquidity and low interest rate. 

According to the fourth paragraph of the passage, the relatively easy liquidity and reduction in interest rates have resulted in erratic behavior of commodity markets

8.Which of the following statements is FALSE in the context of the passage?

(A) Unusual conditions in global financial markets have aggravated the food price.
(B) The policy induced diversion of food to bio-fuels does not reflect that preference has been given to fueling vehicles and not to feeding the hungry.
(C) The weight accorded to financial stability in public policy will be at the cost of stability in the real sector.

A. A and B only

B. B and C only

C. B only

D. C only

E. None of these

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C. B only, In the passage, ‘no government would prefer to fill the fuel tanks of automobiles rather than filling the stomach of the people’ is false as per the last paragraph of the passage. 

9.Which of the following best explains the phrase this phenomenon as used in the fourth paragraph of the passage?

A. Volatility in commodity markets which has led to hoarding

B. Escalation in food prices caused by high interest rates

C. Easy liquidity because of lack of investment in America

D. Weakening of the US dollar and consequent variability in commodity markets

E. Fluctuation in energy prices and outdated public policy

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D. Weakening of the US dollar and consequent variability in commodity markets

‘This phenomenon’ mentioned in the fourth paragraph of the passage refers to weakening of the U.S. dollar and subsequent fluctuation in commodity markets. 

10.Choose the word which is MOST OPPOSITE in meaning to the word given in bold as used in the passage. VOLATILITY 

A. agitation

B. effervescence

C. optimism

D. disparity

E. steady

Show Correct Answers

 

‘Volatility’ means tendency to change in a sudden way. ‘Steady’ is opposite in meaning to the given word. 


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