# :: clerk english language :: ce test 118

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1.

Direction (Q. 1 - 10): Read the following passage carefully and answer the questions that follow:
Acting with unusual speed, the European Union has come up with an unprecedented $750-billion rescue package to combat the fast-spreading debt crisis that has engulfed Europe. Another$321 billion is to be provided by the International Monetary Fund. On the day the package was announced, financial markets across the world bounced back, sharply reversing the steep declines of the previous three days. In India, the benchmark stock indices staged one of the biggest one-day rallies seen over the previous year. Since then, the stock markets have moderated, as it came to be felt that this huge package will only provide a breather and not address the basic causes that brought about the crisis in the first place. The  urgent task is to check the rapid spread of contagion. The crisis that had its origins in Greece's fiscal problems has spread to the rest of Europe, although only three other countries—Portugal, Spain and Ireland, all with high levels of public indebtedness— are seen to be particularly vulnerable. The fears that the troubles in Europe would morph into another global crisis seem exaggerated. However, in the United States and many other developed countries, the European crisis might choke the already feeble recovery.
There are some similarities between the latest crisis and the previous one. Both had their origins in what were unlikely sources. The US sub-prime housing market was hardly a familiar name even to bankers in many developing countries. Greece, with just2.5 percent ofthe euro zone's GDP, was least expected to threaten the euro and the monetary union or export its problems to many parts of the world. As in the previous crisis, the globalisation of financial markets has meant Greece's domestic problems rattling markets across the world. Private capital has stopped flowing into countries with strained finances. The euro has sunk to a 14-month low and the bond markets, reflecting the uncertainty, are quoting at increased spreads. Financial markets and governments will be looking for positive cues in the wake ofthe massive package. It is not clear in what shape the euro and the monetary union will emerge after the crisis. Euro-sceptics are having a field day, pointing out, among others, the relative inflexibility ofthe euro mechanism to tackle a crisis such as the one in Greece. In India, the crisis in Europe has, apart from having its impact on stock prices, raised question marks on the private sector's overseas borrowing. And once again, the crisis has shown the fickle nature of foreign portfolio money managers.

Which of the following statements is/are true in the context of the passage ?
A. The rescue passage had a direct bearing on the financial markets.
B. The Greek crisis could not remain confined to its domestic market alone.
C Portugal, Spain and Ireland are more vulnerable to the debt crisis.

Only C
Only A
Only B
All the above

2.

Greek crisis is basically__________ a .

monetary crisis
general economic crisis
trust deficit
debt crisis

3.

Globalisation of financial markets has its own contradiction in terms of__________.

affecting private capital flow
affecting bond market
affecting the credibility of euro
All the above

4.

The author has suggested that an urgent task is to contain the speed of contagion. What does it mean ?

The debt crisis has to be stopped from spreading to other countries.
There is an urgent need of reforming the entire financial market.
India should be wary of this
The European Union should seek cooperation from other economic blocs.

5.

What impact does Greek debt crisis have on India ?

India should stop borrowing from multilateral institutions.
India should withdraw from the WTO
Private sectors overseas borrowings are not safe.
India will experience a similar crisis soon

6.

What amount of GDP does Greece have as a percentage of euro zone GDP ?

3.5
4.6
2.5
5.0

7.

Greek debt crisis would have bad impact on the economies of the developed countries in terms of

worsening their balance of payment
their efforts to recover from global financial crisis
rasing the rate of unemployment
spawning inflationary tendencies

8.

According to the author, there are some similarities between the Greek debt crisis and the earlier financial crisis. Which of the followings is one of these ?

Both were the handiwork of speculators.
Both have their origin in Europe.
Both have their origin in the Asian-European zone.
Both have their origins in unlikely sources

9.

Recovery package to help Greece tide overthe debt crisis will engender the hopes of__________.

financial markets
governments
public
Both(l)and(2)

10.

Which of the following will better explain the meaning of the phrase 'reversing the steep declines of as used in the passage ?

effecting a change
worsened
sidetracked
containing the negative trend