XAT 2017 — VARC Question 4
Read the following paragraphs and answer the question that follows:
The current trend indicates that food and vegetable inflations continue to be pain points. Food inflation rose to 7.79 percent in June from 7.47 percent, and vegetable inflation rose to 14.74 percent from 10.85 percent. In the weeks ahead, the volatile food inflation will determine the course of overall inflation.
For RBI too, the trend is a concern since under the current agreement with the government, if the inflation exceeds 11 percent it will have to explain to the government why it could not be contained (the lower limit is 2 percent).
Which of the following options is the most appropriate?
Answer & solution
- A
The first paragraph states a cause and the second illustrates the effect.
The first paragraph provides information and the second highlights potential application of the information.
- C
The first paragraph is an assertion and the second provides an illustration of that assertion.
- D
The first paragraph highlights inflation conditions and the second hints at RBI’s inefficiency in managing the situation.
- E
The first paragraph highlights pain points and the second contains a remedy for them.
The first paragraph talks about food inflation and vegetable inflation rising and also gives the food inflation statistics indicating an overwhelming impact on overall inflation. The second paragraph talks about how this data concerns RBI. For RBI this data i.e. trend is a concern since if the trend continues, RBI will have to explain to the government. The information given in first paragraph appears to be relevant to RBI. This relation is vindicated by option 2. Options 1 is wrong since there is no cause and effect relationship between the two paragraphs. Option 3 is wrong, since no assertion is made in the first paragraph Option 4 is incorrect as nowhere in the passage is it mentioned that RBI has been inefficient in containing the inflation. Second paragraph only says that the rising inflation is a concern. Similarly, option 5 can be eliminated as RBI itself is concerned about the inflation so there is no question of remedy.
Hence the correct answer is option 2.