Verbal Ability Test - 7

Directions for questions: The passage given below is followed by a set of questions. Choose the most appropriate answer to each question.

The function of capital markets is to facilitate an exchange of funds among all participants, and yet in practice we find that certain participants are not on par with others. Members of society have varying degrees of market strength in terms of information they bring to a transaction, as well as of purchasing power and credit worthiness, as defined by lenders. For example, within minority communities, capital markets do not properly fulfil their functions; they do not provide access to the aggregate flow of funds in the United States. The financial system does not generate the credit or investment vehicles needed for underwriting economic development in minority areas. The problem underlying this disfunction is found in a rationing mechanism affecting both the available alternatives for investment and the amount of financial resources. This creates a distributive mechanism penalizing members of minority groups because of their socio-economic differences from others. The existing system expresses definite socially based investment preferences that result from the previous allocation of income and that influence the allocation of resources for the present and future. The system tends to increase the inequality of income distribution. And, in the United States economy, a greater inequality of income distribution leads to a greater concentration of capital in certain types of investments.

Most traditional financial market analysis studies ignore financial markets' deficiencies in allocation because of analysts' inherent preferences for the simple model of perfect competition. Conventional financial analysis pays limited attention to issues of market structure and dynamics, relative costs of information, and problems of income distribution. Market participants act as entirely independent and homogeneous individuals with perfect foresight about capital market behaviour. Also it is assumed that each individual in the community at large has the same access to the market and the same opportunity to transact and to express the preference appropriate to his or her individual interest. Moreover, it is assumed that transaction costs for various types of financial instruments (stocks, bonds, etc.) are equally known and equally divided among all community members

Directions for questions: The passage given below is followed by a set of questions. Choose the most appropriate answer to each question.

The function of capital markets is to facilitate an exchange of funds among all participants, and yet in practice we find that certain participants are not on par with others. Members of society have varying degrees of market strength in terms of information they bring to a transaction, as well as of purchasing power and credit worthiness, as defined by lenders. For example, within minority communities, capital markets do not properly fulfil their functions; they do not provide access to the aggregate flow of funds in the United States. The financial system does not generate the credit or investment vehicles needed for underwriting economic development in minority areas. The problem underlying this disfunction is found in a rationing mechanism affecting both the available alternatives for investment and the amount of financial resources. This creates a distributive mechanism penalizing members of minority groups because of their socio-economic differences from others. The existing system expresses definite socially based investment preferences that result from the previous allocation of income and that influence the allocation of resources for the present and future. The system tends to increase the inequality of income distribution. And, in the United States economy, a greater inequality of income distribution leads to a greater concentration of capital in certain types of investments.

Most traditional financial market analysis studies ignore financial markets' deficiencies in allocation because of analysts' inherent preferences for the simple model of perfect competition. Conventional financial analysis pays limited attention to issues of market structure and dynamics, relative costs of information, and problems of income distribution. Market participants act as entirely independent and homogeneous individuals with perfect foresight about capital market behaviour. Also it is assumed that each individual in the community at large has the same access to the market and the same opportunity to transact and to express the preference appropriate to his or her individual interest. Moreover, it is assumed that transaction costs for various types of financial instruments (stocks, bonds, etc.) are equally known and equally divided among all community members.

Directions for questions: The passage given below is followed by a set of questions. Choose the most appropriate answer to each question.

The function of capital markets is to facilitate an exchange of funds among all participants, and yet in practice we find that certain participants are not on par with others. Members of society have varying degrees of market strength in terms of information they bring to a transaction, as well as of purchasing power and credit worthiness, as defined by lenders. For example, within minority communities, capital markets do not properly fulfil their functions; they do not provide access to the aggregate flow of funds in the United States. The financial system does not generate the credit or investment vehicles needed for underwriting economic development in minority areas. The problem underlying this disfunction is found in a rationing mechanism affecting both the available alternatives for investment and the amount of financial resources. This creates a distributive mechanism penalizing members of minority groups because of their socio-economic differences from others. The existing system expresses definite socially based investment preferences that result from the previous allocation of income and that influence the allocation of resources for the present and future. The system tends to increase the inequality of income distribution. And, in the United States economy, a greater inequality of income distribution leads to a greater concentration of capital in certain types of investments.

Most traditional financial market analysis studies ignore financial markets' deficiencies in allocation because of analysts' inherent preferences for the simple model of perfect competition. Conventional financial analysis pays limited attention to issues of market structure and dynamics, relative costs of information, and problems of income distribution. Market participants act as entirely independent and homogeneous individuals with perfect foresight about capital market behaviour. Also it is assumed that each individual in the community at large has the same access to the market and the same opportunity to transact and to express the preference appropriate to his or her individual interest. Moreover, it is assumed that transaction costs for various types of financial instruments (stocks, bonds, etc.) are equally known and equally divided among all community members

The public sector is at the cross roads ever since the launch of economic reforms programme in India. The pendulum has been swinging between survival and surrender. It is the result of a confluence of several factors: a shift in global economic environment, the emergence of the market economy and myths surrounding the performance of the public sector. So virulent has been the onslaught that it is becoming axiomatic that by the very concept, the public sector is inefficient and resource waster whereas private enterprise is resource efficient.

The reform programme in India commenced with the policy of restricting the public sector supported by greater public participation. With the passage of time, the process of liberalization has shifted to privatization in a disguised form couched as strategic role. In the wake of the recent hot pursuit of the wholesale privatization programme a lively and poignant debate has emerged. It provides a golden opportunity to introspect and revisit the issue. At the very outset, it must be made clear that in the worldwide liberalized economic environment and very high stake of the state in most public sector undertakings disinvestment policy seeks to differentiate closed or bankrupt enterprises from the private sector, a fact deliberately overlooked by the champions of privatization. These undertakings need immediate attention.

They are an unnecessary drain on the public exchequer. A high priority area for the disinvestment programme ought to be these enterprises but under one or the other argument these remain unattended, may be it involves a tough task. If these cannot be sold lock, stock and barrel asset stripping is the only option. Obviously the government cannot realise good price from these assets but their disposal will help to stop the drain. If the assets are depreciated or become obsolete, then there is no point in holding on to them indefinitely and take to softer option of selling the vibrant and highly profit-making organisations to reduce the budgetary deficit. Non performers exist both in public and private sectors.

Why condemn the public sector as a whole? Better option will be closure or privatization of loss-making and nonviable units, supporting PSU's which could be turned around and made to become healthy and viable and providing autonomy to the boards of PSU's which are performing well and have potential to be globally competitive be welcomed. With public participation in the PSU's there will be a good dose of accountability in the system. What needs to be reviewed are some basic issues: the priorities allocated to the enterprises selected for disinvestment, a .comprehensive road map delineating the route, the modes and modalities, timing and its consequences. These basic issues require greater discussion and participative decision-making. In any event, the disinvestment programme in respect of the closed and non-revivable units is a must if the drain of further resources is to be prevented.

Let it be understood that PSU's are a big repository of value and it will take quite some time for privatization programme to materialise despite the desire to expedite the process. Until then if a vacuum emerges attended by uncertainty, it will do a great harm to the investments which were made with such great dedication although desired now. The government has withdrawn a budgetary support over the last decade. If some support is extended, it is largely directed to closed or losing enterprise which have no fortune.

The public sector is at the cross roads ever since the launch of economic reforms programme in India. The pendulum has been swinging between survival and surrender. It is the result of a confluence of several factors: a shift in global economic environment, the emergence of the market economy and myths surrounding the performance of the public sector. So virulent has been the onslaught that it is becoming axiomatic that by the very concept, the public sector is inefficient and resource waster whereas private enterprise is resource efficient.

The reform programme in India commenced with the policy of restricting the public sector supported by greater public participation. With the passage of time, the process of liberalization has shifted to privatization in a disguised form couched as strategic role. In the wake of the recent hot pursuit of the wholesale privatization programme a lively and poignant debate has emerged. It provides a golden opportunity to introspect and revisit the issue. At the very outset, it must be made clear that in the worldwide liberalized economic environment and very high stake of the state in most public sector undertakings disinvestment policy seeks to differentiate closed or bankrupt enterprises from the private sector, a fact deliberately overlooked by the champions of privatization. These undertakings need immediate attention.

They are an unnecessary drain on the public exchequer. A high priority area for the disinvestment programme ought to be these enterprises but under one or the other argument these remain unattended, may be it involves a tough task. If these cannot be sold lock, stock and barrel asset stripping is the only option. Obviously the government cannot realise good price from these assets but their disposal will help to stop the drain. If the assets are depreciated or become obsolete, then there is no point in holding on to them indefinitely and take to softer option of selling the vibrant and highly profit-making organisations to reduce the budgetary deficit. Non performers exist both in public and private sectors.

Why condemn the public sector as a whole? Better option will be closure or privatization of loss-making and nonviable units, supporting PSU's which could be turned around and made to become healthy and viable and providing autonomy to the boards of PSU's which are performing well and have potential to be globally competitive be welcomed. With public participation in the PSU's there will be a good dose of accountability in the system. What needs to be reviewed are some basic issues: the priorities allocated to the enterprises selected for disinvestment, a .comprehensive road map delineating the route, the modes and modalities, timing and its consequences. These basic issues require greater discussion and participative decision-making. In any event, the disinvestment programme in respect of the closed and non-revivable units is a must if the drain of further resources is to be prevented.

Let it be understood that PSU's are a big repository of value and it will take quite some time for privatization programme to materialise despite the desire to expedite the process. Until then if a vacuum emerges attended by uncertainty, it will do a great harm to the investments which were made with such great dedication although desired now. The government has withdrawn a budgetary support over the last decade. If some support is extended, it is largely directed to closed or losing enterprise which have no fortune.

The public sector is at a crossroads ever since the launch of the economic reforms programme in India. The pendulum has been swinging between survival and surrender. It is the result of a confluence of several factors: a shift in the global economic environment, the emergence of the market economy and myths surrounding the performance of the public sector. So virulent has been the onslaught that it is becoming axiomatic that by the very concept, the public sector is inefficient and resource waster whereas private enterprise is resource-efficient.

The reform programme in India commenced with the policy of restricting the public sector supported by greater public participation. With the passage of time, the process of liberalization has shifted to privatization in a disguised form couched as a strategic role. In the wake of the recent hot pursuit of the wholesale privatization programme, a lively and poignant debate has emerged. It provides a golden opportunity to introspect and revisit the issue. At the very outset, it must be made clear that in the worldwide liberalized economic environment and very high stake of the state in most public sector undertakings disinvestment policy seeks to differentiate closed or bankrupt enterprises from the private sector, a fact deliberately overlooked by the champions of privatization. These undertakings need immediate attention.

They are an unnecessary drain on the public exchequer. A high priority area for the disinvestment programme ought to be these enterprises but under one or the other argument these remain unattended, maybe it involves a tough task. If these cannot be sold lock, stock and barrel asset stripping is the only option. Obviously, the government cannot realise good price from these assets but their disposal will help to stop the drain. If the assets are depreciated or become obsolete, then there is no point in holding on to them indefinitely and take to the softer option of selling the vibrant and highly profit-making organisations to reduce the budgetary deficit. Non-performers exist both in the public and private sectors.

Why condemn the public sector as a whole? A better option will be closure or privatization of loss-making and nonviable units, supporting PSU's which could be turned around and made to become healthy and viable and providing autonomy to the boards of PSU's which are performing well and have the potential to be globally competitive be welcomed. With public participation in the PSU's, there will be a good dose of accountability in the system. What needs to be reviewed are some basic issues: the priorities allocated to the enterprises selected for disinvestment, a .comprehensive road map delineating the route, the modes and modalities, timing and its consequences. These basic issues require greater discussion and participative decision-making. In any event, the disinvestment programme in respect of the closed and non-revivable units is a must if the drain of further resources is to be prevented.
Let it be understood that PSU's are a big repository of value and it will take quite some time for the privatization programme to materialise despite the desire to expedite the process. Until then if a vacuum emerges attended by uncertainty, it will do great harm to the investments which were made with such great dedication although desired now. The government has withdrawn budgetary support over the last decade. If some support is extended, it is largely directed to closed or losing enterprise which has no fortune.

The public sector is at the cross roads ever since the launch of economic reforms programme in India. The pendulum has been swinging between survival and surrender. It is the result of a confluence of several factors: a shift in global economic environment, the emergence of the market economy and myths surrounding the performance of the public sector. So virulent has been the onslaught that it is becoming axiomatic that by the very concept, the public sector is inefficient and resource waster whereas private enterprise is resource efficient.

The reform programme in India commenced with the policy of restricting the public sector supported by greater public participation. With the passage of time, the process of liberalization has shifted to privatization in a disguised form couched as strategic role. In the wake of the recent hot pursuit of the wholesale privatization programme a lively and poignant debate has emerged. It provides a golden opportunity to introspect and revisit the issue. At the very outset, it must be made clear that in the worldwide liberalized economic environment and very high stake of the state in most public sector undertakings disinvestment policy seeks to differentiate closed or bankrupt enterprises from the private sector, a fact deliberately overlooked by the champions of privatization. These undertakings need immediate attention.

They are an unnecessary drain on the public exchequer. A high priority area for the disinvestment programme ought to be these enterprises but under one or the other argument these remain unattended, may be it involves a tough task. If these cannot be sold lock, stock and barrel asset stripping is the only option. Obviously the government cannot realise good price from these assets but their disposal will help to stop the drain. If the assets are depreciated or become obsolete, then there is no point in holding on to them indefinitely and take to softer option of selling the vibrant and highly profit-making organisations to reduce the budgetary deficit. Non performers exist both in public and private sectors.

Why condemn the public sector as a whole? Better option will be closure or privatization of loss-making and nonviable units, supporting PSU's which could be turned around and made to become healthy and viable and providing autonomy to the boards of PSU's which are performing well and have potential to be globally competitive be welcomed. With public participation in the PSU's there will be a good dose of accountability in the system. What needs to be reviewed are some basic issues: the priorities allocated to the enterprises selected for disinvestment, a .comprehensive road map delineating the route, the modes and modalities, timing and its consequences. These basic issues require greater discussion and participative decision-making. In any event, the disinvestment programme in respect of the closed and non-revivable units is a must if the drain of further resources is to be prevented.

Let it be understood that PSU's are a big repository of value and it will take quite some time for privatization programme to materialise despite the desire to expedite the process. Until then if a vacuum emerges attended by uncertainty, it will do a great harm to the investments which were made with such great dedication although desired now. The government has withdrawn a budgetary support over the last decade. If some support is extended, it is largely directed to closed or losing enterprise which have no fortune.

Directions for questions: The passage given below is followed by a set of questions. Choose the most appropriate answer to each question.

We must question the assumption that for profit health care institutions are obligated to provide free care for people who cannot afford to pay for it. Supermarkets, after all, are not expected to donate food to the hungry, and real estate developers are not expected to let people live rent-free in their housing. Yet food and housing, like health care, are necessities. If there is a basic right to health care, it is reasonable to think there are such rights to food and shelter. Whose obligation is it to secure adequate health care for those without it? There are several reasons to believe that the obligation rests with the federal government. First, the obligation to secure a just distribution of benefits and burdens across society is a general societal obligation. Second, the federal government is the institution society employs to meet society-wide distributive requirements. It has the capacities to finance a hugely expensive program for guaranteed adequate health care. The government's taxing power also allows the burden of financing health care to be spread across society and not to depend on the vagaries of how wealthy or poor a state or local area may be. The government also has the power to coordinate health care programs across local and state boundaries.

This would reduce inefficiencies that allow people to fall between the cracks of the patchwork of local and state programs, and ensure that there are not great differences in the minimum of health care guaranteed to all in different locales. If we are one society, then the level of health care needed for all citizens should not vary in different areas because of political and economic contingencies. It is worth noting that food stamp programs and housing subsidies, also aimed at basic necessities, similarly are largely a federal responsibility. These are reasons for the federal government having the obligation to guarantee access to health care. It could provide this care itself, or it could supply vouchers to be used in the health care marketplace. How access should be secured—and to what extent market mechanisms ought to be utilized—is a separate question.

Directions for questions: The passage given below is followed by a set of questions. Choose the most appropriate answer to each question.

We must question the assumption that for profit health care institutions are obligated to provide free care for people who cannot afford to pay for it. Supermarkets, after all, are not expected to donate food to the hungry, and real estate developers are not expected to let people live rent-free in their housing. Yet food and housing, like health care, are necessities. If there is a basic right to health care, it is reasonable to think there are such rights to food and shelter. Whose obligation is it to secure adequate health care for those without it? There are several reasons to believe that the obligation rests with the federal government. First, the obligation to secure a just distribution of benefits and burdens across society is a general societal obligation. Second, the federal government is the institution society employs to meet society-wide distributive requirements. It has the capacities to finance a hugely expensive program for guaranteed adequate health care. The government's taxing power also allows the burden of financing health care to be spread across society and not to depend on the vagaries of how wealthy or poor a state or local area may be. The government also has the power to coordinate health care programs across local and state boundaries.

This would reduce inefficiencies that allow people to fall between the cracks of the patchwork of local and state programs, and ensure that there are not great differences in the minimum of health care guaranteed to all in different locales. If we are one society, then the level of health care needed for all citizens should not vary in different areas because of political and economic contingencies. It is worth noting that food stamp programs and housing subsidies, also aimed at basic necessities, similarly are largely a federal responsibility. These are reasons for the federal government having the obligation to guarantee access to health care. It could provide this care itself, or it could supply vouchers to be used in the health care marketplace. How access should be secured—and to what extent market mechanisms ought to be utilized—is a separate question.

Directions for questions: The passage given below is followed by a set of questions. Choose the most appropriate answer to each question.

We must question the assumption that for profit health care institutions are obligated to provide free care for people who cannot afford to pay for it. Supermarkets, after all, are not expected to donate food to the hungry, and real estate developers are not expected to let people live rent-free in their housing. Yet food and housing, like health care, are necessities. If there is a basic right to health care, it is reasonable to think there are such rights to food and shelter. Whose obligation is it to secure adequate health care for those without it? There are several reasons to believe that the obligation rests with the federal government. First, the obligation to secure a just distribution of benefits and burdens across society is a general societal obligation. Second, the federal government is the institution society employs to meet society-wide distributive requirements. It has the capacities to finance a hugely expensive program for guaranteed adequate health care. The government's taxing power also allows the burden of financing health care to be spread across society and not to depend on the vagaries of how wealthy or poor a state or local area may be. The government also has the power to coordinate health care programs across local and state boundaries.

This would reduce inefficiencies that allow people to fall between the cracks of the patchwork of local and state programs, and ensure that there are not great differences in the minimum of health care guaranteed to all in different locales. If we are one society, then the level of health care needed for all citizens should not vary in different areas because of political and economic contingencies. It is worth noting that food stamp programs and housing subsidies, also aimed at basic necessities, similarly are largely a federal responsibility. These are reasons for the federal government having the obligation to guarantee access to health care. It could provide this care itself, or it could supply vouchers to be used in the health care marketplace. How access should be secured—and to what extent market mechanisms ought to be utilized—is a separate question.