Passage
Direction for Reading Comprehension: The passages given here are followed by some questions that have four answer choices; read the passage carefully and pick the option whose answer best aligns with the passage
Few realise that the government of China, governing an empire of some 60 million people during the Tang dynasty (618–907), implemented a complex financial system that recognised grain, coins and textiles as money. . . . Coins did have certain advantages: they were durable, recognisable and provided a convenient medium of exchange, especially for smaller transactions. However, there were also disadvantages. A continuing shortage of copper meant that government mints could not produce enough coins for the entire empire, to the extent that for most of the dynasty’s history, coins constituted only a tenth of the money supply. One of the main objections to calls for taxes to be paid in coin was that peasant producers who could weave cloth or grow grain – the other two major currencies of the Tang –would not be able to produce coins, and therefore would not be able to pay their taxes. . . .
As coins had advantages and disadvantages, so too did textiles. If in circulation for a long period of time, they could show signs of wear and tear. Stained, faded and torn bolts of textiles had less value than a brand new bolt. Furthermore, a full bolt had a particular value. If consumers cut textiles into smaller pieces to buy or sell something worth less than a full bolt, that, too, greatly lessened the value of the textiles. Unlike coins, textiles could not be used for small transactions; as [an official] noted, textiles could not “be exchanged by the foot and the inch” . . .
But textiles had some advantages over coins. For a start, textile production was widespread and there were fewer problems with the supply of textiles. For large transactions, textiles weighed less than their equivalent in coins since a string of coins . . . could weigh as much as 4 kg. Furthermore, the dimensions of a bolt of silk held remarkably steady from the third to the tenth century: 56 cm wide and 12 m long . . . The values of different textiles were also more stable than the fluctuating values of coins. . . .
The government also required the use of textiles for large transactions. Coins, on the other hand, were better suited for smaller transactions, and possibly, given the costs of transporting coins, for a more local usage. Grain, because it rotted easily, was not used nearly as much as coins and textiles, but taxpayers were required to pay grain to the government as a share of their annual tax obligations, and official salaries were expressed in weights of grain. . . .
In actuality, our own currency system today has some similarities even as it is changing in front of our eyes. . . . We have cash – coins for small transactions like paying for parking at a meter, and banknotes for other items; cheques and debit/credit cards for other, often larger, types of payments. At the same time, we are shifting to electronic banking and making payments online. Some young people never use cash [and] do not know how to write a cheque . . .
Question for CAT 2020 Reading Comprehension Questions- 7
Try yourself:According to the passage, the modern currency system shares all the following features with that of the Tang, EXCEPT that:
Explanation
This is an easy passage to read, but some of the questions have very close choices. This question asks to pick a choice that modern currency does not share with the currencies of the Tang era. You must remember that this is an EXCEPT question, and the feature not shared will become the right choice. 1 is a feature shared by both modern and Tang currencies. Last paragraph tells us about modern currencies, whereas the opening tells us about the Tang currencies. Choice 3 also is a feature shared by both, the bolt of silk lost value because of wear and tear. Now many might feel that the last paragraph does not speak anything about modern currencies losing value over time. But this is implied as common knowledge. The idea of inflation suggests that currency value my not always be the same always. The value of Rs 100 was greater 20 years ago than it is today. Thus 3 is a feature shared by both modern and Tang currencies. 4 is also a feature shared by both because in the modern times we use coins for smaller payments, currency for bigger payments, and electronic methods for still bigger payments. This was true of Tang era as well, as can be seen in the first and second paragraphs. The currencies during the Tang era were static: we had coins, fabric and grains to make payments; there is no transformation implied in these during that era, whereas in the modern times because of technology the currency system is undergoing transformation, as the last paragraph shows. The author says: it is changing in front of our eyes.
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Question for CAT 2020 Reading Comprehension Questions- 7
Try yourself:When discussing textiles as currency in the Tang period, the author uses the words “steady” and “stable” to indicate all of the following EXCEPT:
Explanation
To answer this question, we must look for the word “steady and stable” and examine the context in which the words have been used. These words have come in the third paragraph. The para says “dimensions of a bolt of silk held steady” hereby dimension, the author implies measurement. Thus 1 is correct, but it goes out because it is an except question. The idea of supply can also be inferred from the first sentence of the third paragraph of the passage. The values of different textiles were more stable because the textiles would not have deteriorated over time. The Passage tells us that the value of textiles depended on the quality of the textile. So stable value means stable quality. The reliability of transportation is not the question here. It is the cost of the transportation that the passage highlights (second last para). Thus 1 is the best choice.
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Question for CAT 2020 Reading Comprehension Questions- 7
Try yourself:During the Tang period, which one of the following would not be an economically sound decision for a small purchase in the local market that is worth one-eighth of a bolt of cloth?
Explanation
This is a slightly tricky question, but we have to pick the choice that is not economically a sound decision. So the right choice must imply some sort of a loss. Option 1 says that payment was done with a faded bolt of the same value.... since the faded bolt will further deteriorate, using it to pay makes sense. 1 goes out. Making payment in grains would be the most economical way as grains would rot easily, so the payer will gain while the payee will not. Here we have to answer for the payer. Thus both 2 and 3 are economical. 3 is also an economical way because coins, the passage says, lost value over time, but a piece of fabric from a new bolt is not likely to lose value over time, and so would be economically not a wise decision to make payment.
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Question for CAT 2020 Reading Comprehension Questions- 7
Try yourself:In the context of the passage, which one of the following can be inferred with regard to the use of currency during the Tang era?
Explanation
The answer to the earlier questions helps us answer this question. If in the earlier question we eliminated choices that modern currencies shared with the currencies of the Tang era, then it implies that currency usage during the Tang era was similar to currency usage of modern times. There is no evidence for choice 1. Copper coins were difficult to mint, the passage says, but that doesn’t mean that copper coins were more valuable. Choice 4 is opposite of what is stated in the passage.
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