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High inflation if not followed by correspondingly increasing of lending rates lead to devaluation of currency.
  • a)
    if not followed by correspondingly increasing of lending rates lead
  • b)
    when not followed by increase in lending rates can correspondingly lead
  • c)
    if it is not correspondingly followed by increase in lending rates leads
  • d)
    if not followed by corresponding increase in lending rates can lead
  • e)
    not being followed by increase in corresponding lending rates can lead
Correct answer is option 'D'. Can you explain this answer?
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Verified Answer
High inflationif not followed by correspondingly increasing of lending...
Meaning Analysis
This sentence shows the condition under which the high inflation leads to devaluation of currency.
This question tests your knowledge of subject verb number agreement, usage of adverbs vs. adjectives, and pronoun reference.

Error Analysis
The original sentence has two errors:
1: SV-Number – The subject – high inflation – should have singular verb – leads
2: Modifier – The modifier “correspondingly” modifies the noun “increasing of lending rates”. Thus, this should be written as an adjective instead of as an adverb. Thus ‘corresponding increase of lending rates’ is the correct expression.
Answer Choices
A
if not followed by correspondingly increasing of lending rates lead
This choice has two errors – SV-number and usage of adverb when adjective should be used as explained in error analysis.
B
when not followed by increase in lending rates can correspondingly lead
This choice has two errors:
1: Meaning – the use of word "when" changes the intended meaning since now it implies that whenever high inflation is not followed by increase in lending rates, the effect will take place. This is not the intended meaning since the original sentence mentions this as a condition
2: Use of correspondingly – Per the original sentence "corresponding" should be used with “increasing of lending rate”. This is so because per the condition, there should be relative increase in lending rate based on the high inflation and not any increase. However, in this choice, it is used with the verb "lead", and hence no longer communicates this meaning.
C
if it is not correspondingly followed by increase in lending rates leads
This choice has 2 errors
1: Awkward construction - Due to the use of pronoun "it" the sentence has a very awkward and imprecise construction.
2: Use of correspondingly – This choice uses correspondingly in incorrect manner as in choice B.
D
if not followed by corresponding increase in lending rates can lead
Correct
E
not being followed by increase in corresponding lending rates can lead
This choice is awkward in construction and uses corresponding in incorrect manner as in Choice C.
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Most Upvoted Answer
High inflationif not followed by correspondingly increasing of lending...
Explanation:

The correct answer is option 'D': "if not followed by corresponding increase in lending rates can lead". Let's break down the sentence to understand why this is the correct answer.

Key Points:
- High inflation
- Not followed by a corresponding increase in lending rates
- Leads to devaluation of currency

Analysis:
- High inflation refers to a situation where the general level of prices for goods and services is rising, and the purchasing power of currency is decreasing.
- When there is high inflation, it is usually expected that lending rates will increase. This is because lenders will demand higher interest rates to compensate for the decreased value of money due to inflation.
- However, if high inflation is not followed by a corresponding increase in lending rates, it can lead to devaluation of the currency.
- Devaluation of currency refers to a decrease in the value of a country's currency relative to other currencies. It can happen due to various factors, including inflation.

Explanation of the Options:
a) "if not followed by correspondingly increasing of lending rates lead" - This option is grammatically incorrect. It should be "leads" instead of "lead".
b) "when not followed by increase in lending rates can correspondingly lead" - This option is grammatically incorrect. It should be "leads" instead of "lead".
c) "if it is not correspondingly followed by increase in lending rates leads" - This option is grammatically incorrect. It should be "can lead" instead of "leads".
d) "if not followed by corresponding increase in lending rates can lead" - This option is grammatically correct and conveys the intended meaning. It states that if high inflation is not followed by a corresponding increase in lending rates, it can lead to the devaluation of the currency.
e) "not being followed by increase in corresponding lending rates can lead" - This option is grammatically incorrect. It should be "can lead" instead of "lead".

Conclusion:
Option 'D' is the correct answer because it is grammatically correct and accurately conveys the cause and effect relationship between high inflation, the absence of a corresponding increase in lending rates, and the devaluation of the currency.
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Read the passage and answer the question given below.Is it possible to decrease inflation without causing a recession and its concomitant increase in unemployment? The orthodox answer is “no.” whether they support the “inertia” theory of inflation (that today’s inflation rate is caused by yesterday’s inflation, the state of the economic cycle, and external influences such as import prices) or the “rational expectations” theory (that inflation is caused by workers’ and employers’ expectations, coupled with a lack of credible monetary and fiscal policies), most economists agree that tight monetary and fiscal policies, which cause recessions, are necessary to decelerate inflation. They point out that in the 1980’s, many European countries and the United States conquered high (by these countries’ standards) inflation, but only by applying tight monetary and fiscal policies that sharply increased unemployment. Nevertheless, some governments’ policymakers insist that direct controls on wages and prices, without tight monetary and fiscal policies, can succeed in decreasing inflation. Unfortunately, because this approach fails to deal with the underlying causes of inflation, wage and price controls eventually collapse, the hitherto-repressed inflation resurfaces, and in the meantime, though the policymakers succeed in avoiding a recession, a frozen structure of relative prices imposes distortions that do damage to the economy’s prospects for long-term growth.Q. Which of the following, if true, would most strengthen the author’s conclusion about the use of wage and price controls?

Irrespective of the general state of the economy, paying less for the same thing appeals to most consumers, who seem to have an intuitive dislike for inflation. But much as we may like to pay less, a sustained decline in prices, deflation, may not be in our best interests. Deflation, in fact, is considered to be a bigger evil than inflation, and evokes strong action by policymakers who would try everything possible to prop up prices. Deflation often results from a slowdown in which reduction in demand vis--vis supply causes prices to dip. With a sharp decline in prices, consumers tend to postpone purchases in the belief that prices will head further lower. This adds to the pressure on businesses, which in addition to a fall in prices also see an accumulation of inventory. Production cuts are hence resorted to, resulting in factory closures and consequent layoffs or salary cuts. With unemployment increasing, income levels in the economy fall, leading to further cuts in consumer spending and more pressure on prices. A vicious cycle emerges; the cascade effect is felt across sectors; and the economy goes into defeatist mode.To prevent deflations and to tackle the downward spiral caused by them, governments resort to large-scale spending, undertaking massive projects to increase employment, incomes, and prices and pumping in huge sums of money to propel demand. For instance, in the aftermath of the financial market crash in 2008, the US government undertook big-ticket stimulus measures and QE (quantitative easing) to revive the economy.However, not all dips in prices are bad. A fall in prices of goods and services due to technological innovations and increased competition could actually benefit both the consumers and the producers. Such a situation is very different from deflation, which affects prices across the economy on a sustained basis (mainly due to decreasing demand or liquidity problems) and which should indeed be considered a red flag.Which of the following statements would the author most likely agree with?

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High inflationif not followed by correspondingly increasing of lending rates leadto devaluation of currency.a)if not followed by correspondingly increasing of lending rates leadb)when not followed by increase in lending rates can correspondingly leadc)if it is not correspondingly followed by increase in lending rates leadsd)if not followed by corresponding increase in lending rates can leade)not being followed by increase in corresponding lending rates can leadCorrect answer is option 'D'. Can you explain this answer?
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