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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?
Most Upvoted Answer
High inflationif not followed by correspondingly increasing of lending...
A) "if not followed by correspondingly increasing of lending rates lead" This option has a subject-verb disagreement. The phrase "if not followed by correspondingly increasing of lending rates" should be followed by "leads" instead of "lead." Additionally, the phrase "correspondingly increasing of lending rates" could be rephrased more concisely as "corresponding increase in lending rates."
B) "when not followed by increase in lending rates can correspondingly lead" This option introduces the word "when" instead of "if," which slightly alters the conditional statement. It also uses "can correspondingly lead" to express the potential outcome. While grammatically correct, the wording could be more concise.
C) "if it is not correspondingly followed by increase in lending rates leads" This option adds the pronoun "it" before "is" but lacks parallelism in the verb form. The phrase "if it is not correspondingly followed by increase in lending rates" should be followed by "leads" instead of "lead."
D) "if not followed by corresponding increase in lending rates can lead" This option maintains the conditional statement and corrects the subject-verb agreement. The phrase "corresponding increase in lending rates" is more concise than the wording in option A. This option effectively conveys the intended meaning.
E) "not being followed by increase in corresponding lending rates can lead" This option introduces the phrase "not being followed by increase in corresponding lending rates" but lacks parallelism in the verb form. The phrase should be followed by "can lead" instead of "can lead."
Overall, option D is the most grammatically correct and effectively conveys the intended meaning. It maintains the conditional statement, corrects the subject-verb agreement, and uses concise wording.
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High inflationif not followed by correspondingly increasing of lending...
Explanation:
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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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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? for GMAT 2024 is part of GMAT preparation. The Question and answers have been prepared according to the GMAT exam syllabus. Information about 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? covers all topics & solutions for GMAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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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