VARC Test - 10

Direction: Read the following passage carefully and answer the questions given below it. Certain words have been printed in bold to help you locate them while answering some of the questions.

Every decade there are instances when financial markets react brainlessly to fads and swags. Investors go grazing passively from one place to another, following a leader, without scouting out the grass themselves. This is called herding. History has recorded the three most irrational herding phenomena that is unknown to many - the Dutch Tulip mania, the Mississippi Bubble and the South Sea Bubble. The pre-modern definition of a bubble, according to the Dictionary of Political Economy (1926) is “any unsound undertaking accompanied by a high degree of speculation.” Drawing it simplistically, a bubble is an upward price movement over an extended range which later implodes in the future. Very reasons of a bubble development are herding, irrational exuberance, self-delusion, and blindness. Here, market sentiment acts as a driving force and not the mental state of an investor. An excerpt from The Financial Times article will explain the perspective better. It says “When everyone rushes in the same direction, it is hard for financial speculators to stand aside and recall the lessons of past stampedes.” Now, whether these definitions can be applied to bitcoin is a million-dollar question. It is imperative to look at the history of early bubbles to track down what they actually implied about the behavior of the private capital in financial markets. One such epitome of market stress occurred in 1634-1637, called The Dutch Tulip mania. Till now, it stands as the decisive example of insanity and irrationality that materializes in the asset market. At the time of the tulip speculation, the Netherlands was a highly commercialized country with innovative financial markets. Its participation in innumerable risky ventures had proven so successful that the era was considered the golden age of the Netherlands. During that time, non-professionals and novices entered the tulip trade in large numbers. Currently, the same is being witnessed in the bitcoin market. A rising demand for tulip bulbs in France apparently drove the speculation. Soon enough, individual tulip bulb prices reached enormous levels. People from all classes hurriedly liquidated other assets to participate in the tulip market. the elite population adopted wearing tulips as a sign of affluence; elegantly stuffed on suit pockets and various hairdos. It was in their view, a kind of anarchy show, but in doing so, all the conventions and rules for virtuous and sober commercial conduct had been thrown into the wind. And just when the rising demand faded in the first week of February 1637, the tulip speculation collapsed and the tulip bulbs could not surpass the 10 percent mark of their peak prices. For example, Roi de Fleurs (Rare tulip) was sold at fl. 1000 in 1637 the peak of mania but was available at fl. 10 by 1722 (fl. is the Dutch guilder, the currency of the Netherlands from the 17th century until 2002). It was no longer considered rare. If we analyze crypto-currencies, there are so many names alternatively to bitcoin that are now available in the market, the rarity is over. If we dissect the facts further, one tulip bulb was equivalent to all of the combined: 2 bags of wheat, 4 lasts of rye, 4 well-fed oxen and pigs, 12 well-fed sheep, 4 tons of 8 guilder beer, 2 tons butter, 1000 pounds of cheese, 1 bed with accessories, 1 stack of clothes and 1 silver chalice. It’s unbelievable to accept this figure but it’s true. Today one bitcoin can probably buy all of the above and much more. The bitcoin bubble has been created due to excessive demand in the market and rising prices. It has created frenzy across the world and has driven people obnoxiously greedy. Also, it’s quite legit to say that there are chances that the government will want to control the monetary policy “manually”, which gives them the power to willfully control the wealth distribution system.

Direction: Read the following passage carefully and answer the questions given below it. Certain words have been printed in bold to help you locate them while answering some of the questions.

Every decade there are instances when financial markets react brainlessly to fads and swags. Investors go grazing passively from one place to another, following a leader, without scouting out the grass themselves. This is called herding. History has recorded the three most irrational herding phenomena that is unknown to many - the Dutch Tulip mania, the Mississippi Bubble and the South Sea Bubble. The pre-modern definition of a bubble, according to the Dictionary of Political Economy (1926) is “any unsound undertaking accompanied by a high degree of speculation.” Drawing it simplistically, a bubble is an upward price movement over an extended range which later implodes in the future. Very reasons of a bubble development are herding, irrational exuberance, self-delusion, and blindness. Here, market sentiment acts as a driving force and not the mental state of an investor. An excerpt from The Financial Times article will explain the perspective better. It says “When everyone rushes in the same direction, it is hard for financial speculators to stand aside and recall the lessons of past stampedes.” Now, whether these definitions can be applied to bitcoin is a million-dollar question. It is imperative to look at the history of early bubbles to track down what they actually implied about the behavior of the private capital in financial markets. One such epitome of market stress occurred in 1634-1637, called The Dutch Tulip mania. Till now, it stands as the decisive example of insanity and irrationality that materializes in the asset market. At the time of the tulip speculation, the Netherlands was a highly commercialized country with innovative financial markets. Its participation in innumerable risky ventures had proven so successful that the era was considered the golden age of the Netherlands. During that time, non-professionals and novices entered the tulip trade in large numbers. Currently, the same is being witnessed in the bitcoin market. A rising demand for tulip bulbs in France apparently drove the speculation. Soon enough, individual tulip bulb prices reached enormous levels. People from all classes hurriedly liquidated other assets to participate in the tulip market. the elite population adopted wearing tulips as a sign of affluence; elegantly stuffed on suit pockets and various hairdos. It was in their view, a kind of anarchy show, but in doing so, all the conventions and rules for virtuous and sober commercial conduct had been thrown into the wind. And just when the rising demand faded in the first week of February 1637, the tulip speculation collapsed and the tulip bulbs could not surpass the 10 percent mark of their peak prices. For example, Roi de Fleurs (Rare tulip) was sold at fl. 1000 in 1637 the peak of mania but was available at fl. 10 by 1722 (fl. is the Dutch guilder, the currency of the Netherlands from the 17th century until 2002). It was no longer considered rare. If we analyze crypto-currencies, there are so many names alternatively to bitcoin that are now available in the market, the rarity is over. If we dissect the facts further, one tulip bulb was equivalent to all of the combined: 2 bags of wheat, 4 lasts of rye, 4 well-fed oxen and pigs, 12 well-fed sheep, 4 tons of 8 guilder beer, 2 tons butter, 1000 pounds of cheese, 1 bed with accessories, 1 stack of clothes and 1 silver chalice. It’s unbelievable to accept this figure but it’s true. Today one bitcoin can probably buy all of the above and much more. The bitcoin bubble has been created due to excessive demand in the market and rising prices. It has created frenzy across the world and has driven people obnoxiously greedy. Also, it’s quite legit to say that there are chances that the government will want to control the monetary policy “manually”, which gives them the power to willfully control the wealth distribution system.

Direction: Read the following passage carefully and answer the questions given below it. Certain words have been printed in bold to help you locate them while answering some of the questions.

Every decade there are instances when financial markets react brainlessly to fads and swags. Investors go grazing passively from one place to another, following a leader, without scouting out the grass themselves. This is called herding. History has recorded the three most irrational herding phenomena that is unknown to many - the Dutch Tulip mania, the Mississippi Bubble and the South Sea Bubble. The pre-modern definition of a bubble, according to the Dictionary of Political Economy (1926) is “any unsound undertaking accompanied by a high degree of speculation.” Drawing it simplistically, a bubble is an upward price movement over an extended range which later implodes in the future. Very reasons of a bubble development are herding, irrational exuberance, self-delusion, and blindness. Here, market sentiment acts as a driving force and not the mental state of an investor. An excerpt from The Financial Times article will explain the perspective better. It says “When everyone rushes in the same direction, it is hard for financial speculators to stand aside and recall the lessons of past stampedes.” Now, whether these definitions can be applied to bitcoin is a million-dollar question. It is imperative to look at the history of early bubbles to track down what they actually implied about the behavior of the private capital in financial markets. One such epitome of market stress occurred in 1634-1637, called The Dutch Tulip mania. Till now, it stands as the decisive example of insanity and irrationality that materializes in the asset market. At the time of the tulip speculation, the Netherlands was a highly commercialized country with innovative financial markets. Its participation in innumerable risky ventures had proven so successful that the era was considered the golden age of the Netherlands. During that time, non-professionals and novices entered the tulip trade in large numbers. Currently, the same is being witnessed in the bitcoin market. A rising demand for tulip bulbs in France apparently drove the speculation. Soon enough, individual tulip bulb prices reached enormous levels. People from all classes hurriedly liquidated other assets to participate in the tulip market. the elite population adopted wearing tulips as a sign of affluence; elegantly stuffed on suit pockets and various hairdos. It was in their view, a kind of anarchy show, but in doing so, all the conventions and rules for virtuous and sober commercial conduct had been thrown into the wind. And just when the rising demand faded in the first week of February 1637, the tulip speculation collapsed and the tulip bulbs could not surpass the 10 percent mark of their peak prices. For example, Roi de Fleurs (Rare tulip) was sold at fl. 1000 in 1637 the peak of mania but was available at fl. 10 by 1722 (fl. is the Dutch guilder, the currency of the Netherlands from the 17th century until 2002). It was no longer considered rare. If we analyze crypto-currencies, there are so many names alternatively to bitcoin that are now available in the market, the rarity is over. If we dissect the facts further, one tulip bulb was equivalent to all of the combined: 2 bags of wheat, 4 lasts of rye, 4 well-fed oxen and pigs, 12 well-fed sheep, 4 tons of 8 guilder beer, 2 tons butter, 1000 pounds of cheese, 1 bed with accessories, 1 stack of clothes and 1 silver chalice. It’s unbelievable to accept this figure but it’s true. Today one bitcoin can probably buy all of the above and much more. The bitcoin bubble has been created due to excessive demand in the market and rising prices. It has created frenzy across the world and has driven people obnoxiously greedy. Also, it’s quite legit to say that there are chances that the government will want to control the monetary policy “manually”, which gives them the power to willfully control the wealth distribution system.

Direction: Read the following passage carefully and answer the questions given below it. Certain words have been printed in bold to help you locate them while answering some of the questions.

Every decade there are instances when financial markets react brainlessly to fads and swags. Investors go grazing passively from one place to another, following a leader, without scouting out the grass themselves. This is called herding. History has recorded the three most irrational herding phenomena that is unknown to many - the Dutch Tulip mania, the Mississippi Bubble and the South Sea Bubble. The pre-modern definition of a bubble, according to the Dictionary of Political Economy (1926) is “any unsound undertaking accompanied by a high degree of speculation.” Drawing it simplistically, a bubble is an upward price movement over an extended range which later implodes in the future. Very reasons of a bubble development are herding, irrational exuberance, self-delusion, and blindness. Here, market sentiment acts as a driving force and not the mental state of an investor. An excerpt from The Financial Times article will explain the perspective better. It says “When everyone rushes in the same direction, it is hard for financial speculators to stand aside and recall the lessons of past stampedes.” Now, whether these definitions can be applied to bitcoin is a million-dollar question. It is imperative to look at the history of early bubbles to track down what they actually implied about the behavior of the private capital in financial markets. One such epitome of market stress occurred in 1634-1637, called The Dutch Tulip mania. Till now, it stands as the decisive example of insanity and irrationality that materializes in the asset market. At the time of the tulip speculation, the Netherlands was a highly commercialized country with innovative financial markets. Its participation in innumerable risky ventures had proven so successful that the era was considered the golden age of the Netherlands. During that time, non-professionals and novices entered the tulip trade in large numbers. Currently, the same is being witnessed in the bitcoin market. A rising demand for tulip bulbs in France apparently drove the speculation. Soon enough, individual tulip bulb prices reached enormous levels. People from all classes hurriedly liquidated other assets to participate in the tulip market. the elite population adopted wearing tulips as a sign of affluence; elegantly stuffed on suit pockets and various hairdos. It was in their view, a kind of anarchy show, but in doing so, all the conventions and rules for virtuous and sober commercial conduct had been thrown into the wind. And just when the rising demand faded in the first week of February 1637, the tulip speculation collapsed and the tulip bulbs could not surpass the 10 percent mark of their peak prices. For example, Roi de Fleurs (Rare tulip) was sold at fl. 1000 in 1637 the peak of mania but was available at fl. 10 by 1722 (fl. is the Dutch guilder, the currency of the Netherlands from the 17th century until 2002). It was no longer considered rare. If we analyze crypto-currencies, there are so many names alternatively to bitcoin that are now available in the market, the rarity is over. If we dissect the facts further, one tulip bulb was equivalent to all of the combined: 2 bags of wheat, 4 lasts of rye, 4 well-fed oxen and pigs, 12 well-fed sheep, 4 tons of 8 guilder beer, 2 tons butter, 1000 pounds of cheese, 1 bed with accessories, 1 stack of clothes and 1 silver chalice. It’s unbelievable to accept this figure but it’s true. Today one bitcoin can probably buy all of the above and much more. The bitcoin bubble has been created due to excessive demand in the market and rising prices. It has created frenzy across the world and has driven people obnoxiously greedy. Also, it’s quite legit to say that there are chances that the government will want to control the monetary policy “manually”, which gives them the power to willfully control the wealth distribution system.

Direction: Read the following passage carefully and answer the questions given below it. Certain words have been printed in bold to help you locate them while answering some of the questions.

Every decade there are instances when financial markets react brainlessly to fads and swags. Investors go grazing passively from one place to another, following a leader, without scouting out the grass themselves. This is called herding. History has recorded the three most irrational herding phenomena that is unknown to many - the Dutch Tulip mania, the Mississippi Bubble and the South Sea Bubble. The pre-modern definition of a bubble, according to the Dictionary of Political Economy (1926) is “any unsound undertaking accompanied by a high degree of speculation.” Drawing it simplistically, a bubble is an upward price movement over an extended range which later implodes in the future. Very reasons of a bubble development are herding, irrational exuberance, self-delusion, and blindness. Here, market sentiment acts as a driving force and not the mental state of an investor. An excerpt from The Financial Times article will explain the perspective better. It says “When everyone rushes in the same direction, it is hard for financial speculators to stand aside and recall the lessons of past stampedes.” Now, whether these definitions can be applied to bitcoin is a million-dollar question. It is imperative to look at the history of early bubbles to track down what they actually implied about the behavior of the private capital in financial markets. One such epitome of market stress occurred in 1634-1637, called The Dutch Tulip mania. Till now, it stands as the decisive example of insanity and irrationality that materializes in the asset market. At the time of the tulip speculation, the Netherlands was a highly commercialized country with innovative financial markets. Its participation in innumerable risky ventures had proven so successful that the era was considered the golden age of the Netherlands. During that time, non-professionals and novices entered the tulip trade in large numbers. Currently, the same is being witnessed in the bitcoin market. A rising demand for tulip bulbs in France apparently drove the speculation. Soon enough, individual tulip bulb prices reached enormous levels. People from all classes hurriedly liquidated other assets to participate in the tulip market. the elite population adopted wearing tulips as a sign of affluence; elegantly stuffed on suit pockets and various hairdos. It was in their view, a kind of anarchy show, but in doing so, all the conventions and rules for virtuous and sober commercial conduct had been thrown into the wind. And just when the rising demand faded in the first week of February 1637, the tulip speculation collapsed and the tulip bulbs could not surpass the 10 percent mark of their peak prices. For example, Roi de Fleurs (Rare tulip) was sold at fl. 1000 in 1637 the peak of mania but was available at fl. 10 by 1722 (fl. is the Dutch guilder, the currency of the Netherlands from the 17th century until 2002). It was no longer considered rare. If we analyze crypto-currencies, there are so many names alternatively to bitcoin that are now available in the market, the rarity is over. If we dissect the facts further, one tulip bulb was equivalent to all of the combined: 2 bags of wheat, 4 lasts of rye, 4 well-fed oxen and pigs, 12 well-fed sheep, 4 tons of 8 guilder beer, 2 tons butter, 1000 pounds of cheese, 1 bed with accessories, 1 stack of clothes and 1 silver chalice. It’s unbelievable to accept this figure but it’s true. Today one bitcoin can probably buy all of the above and much more. The bitcoin bubble has been created due to excessive demand in the market and rising prices. It has created frenzy across the world and has driven people obnoxiously greedy. Also, it’s quite legit to say that there are chances that the government will want to control the monetary policy “manually”, which gives them the power to willfully control the wealth distribution system.

Direction: Read the following passage carefully and answer the questions given below it. Certain words have been printed in bold to help you locate them while answering some of the questions.

Every decade there are instances when financial markets react brainlessly to fads and swags. Investors go grazing passively from one place to another, following a leader, without scouting out the grass themselves. This is called herding. History has recorded the three most irrational herding phenomena that is unknown to many - the Dutch Tulip mania, the Mississippi Bubble and the South Sea Bubble. The pre-modern definition of a bubble, according to the Dictionary of Political Economy (1926) is “any unsound undertaking accompanied by a high degree of speculation.” Drawing it simplistically, a bubble is an upward price movement over an extended range which later implodes in the future. Very reasons of a bubble development are herding, irrational exuberance, self-delusion, and blindness. Here, market sentiment acts as a driving force and not the mental state of an investor. An excerpt from The Financial Times article will explain the perspective better. It says “When everyone rushes in the same direction, it is hard for financial speculators to stand aside and recall the lessons of past stampedes.” Now, whether these definitions can be applied to bitcoin is a million-dollar question. It is imperative to look at the history of early bubbles to track down what they actually implied about the behavior of the private capital in financial markets. One such epitome of market stress occurred in 1634-1637, called The Dutch Tulip mania. Till now, it stands as the decisive example of insanity and irrationality that materializes in the asset market. At the time of the tulip speculation, the Netherlands was a highly commercialized country with innovative financial markets. Its participation in innumerable risky ventures had proven so successful that the era was considered the golden age of the Netherlands. During that time, non-professionals and novices entered the tulip trade in large numbers. Currently, the same is being witnessed in the bitcoin market. A rising demand for tulip bulbs in France apparently drove the speculation. Soon enough, individual tulip bulb prices reached enormous levels. People from all classes hurriedly liquidated other assets to participate in the tulip market. the elite population adopted wearing tulips as a sign of affluence; elegantly stuffed on suit pockets and various hairdos. It was in their view, a kind of anarchy show, but in doing so, all the conventions and rules for virtuous and sober commercial conduct had been thrown into the wind. And just when the rising demand faded in the first week of February 1637, the tulip speculation collapsed and the tulip bulbs could not surpass the 10 percent mark of their peak prices. For example, Roi de Fleurs (Rare tulip) was sold at fl. 1000 in 1637 the peak of mania but was available at fl. 10 by 1722 (fl. is the Dutch guilder, the currency of the Netherlands from the 17th century until 2002). It was no longer considered rare. If we analyze crypto-currencies, there are so many names alternatively to bitcoin that are now available in the market, the rarity is over. If we dissect the facts further, one tulip bulb was equivalent to all of the combined: 2 bags of wheat, 4 lasts of rye, 4 well-fed oxen and pigs, 12 well-fed sheep, 4 tons of 8 guilder beer, 2 tons butter, 1000 pounds of cheese, 1 bed with accessories, 1 stack of clothes and 1 silver chalice. It’s unbelievable to accept this figure but it’s true. Today one bitcoin can probably buy all of the above and much more. The bitcoin bubble has been created due to excessive demand in the market and rising prices. It has created frenzy across the world and has driven people obnoxiously greedy. Also, it’s quite legit to say that there are chances that the government will want to control the monetary policy “manually”, which gives them the power to willfully control the wealth distribution system.

Direction: ​Read the following passage and answer the question given below. Some words may be highlighted read carefully.

Indian economy is directly related to the volatile price of oil. At an international meeting of ministers a few weeks ago, the Prime Minister urged the ministers to reduce the cost of energy to help the global economy recover. The minister also called for a review of payment terms, advising the partial use of the rupee instead of the U.S. dollar to pay for oil, in order to lessen the burden on oil-importing countries in the wake of the strengthening of the dollar. With the majority of its oil demand being met through imports, India clearly has a lot at stake as oil prices have risen considerably in rupee terms in the last few years. Speaking at the same event, one of the foreign ministers refused to openly commit to lower oil prices. He instead said that the price of oil could have been much higher but for the efforts taken by his country to boost supply. This is not surprising given the absence of significant rival suppliers in the global oil market willing to help out India. One more suggested solution to the oil problem is to utilize the domestic sources of energy supply and encourage consumers to switch to green alternatives. This should be backed by a stronger policy framework and implementation. The government should try to diversify its international supplier base to manage sudden surprises better. The government should also not ignore the risks associated with this. It will take quite a long to free the economy off oil imports. Hence, the government should think beyond the next election to end the country’s excessive reliance on oil for its development.

Direction: ​Read the following passage and answer the question given below. Some words may be highlighted read carefully.

Indian economy is directly related to the volatile price of oil. At an international meeting of ministers a few weeks ago, the Prime Minister urged the ministers to reduce the cost of energy to help the global economy recover. The minister also called for a review of payment terms, advising the partial use of the rupee instead of the U.S. dollar to pay for oil, in order to lessen the burden on oil-importing countries in the wake of the strengthening of the dollar. With the majority of its oil demand being met through imports, India clearly has a lot at stake as oil prices have risen considerably in rupee terms in the last few years. Speaking at the same event, one of the foreign ministers refused to openly commit to lower oil prices. He instead said that the price of oil could have been much higher but for the efforts taken by his country to boost supply. This is not surprising given the absence of significant rival suppliers in the global oil market willing to help out India. One more suggested solution to the oil problem is to utilize the domestic sources of energy supply and encourage consumers to switch to green alternatives. This should be backed by a stronger policy framework and implementation. The government should try to diversify its international supplier base to manage sudden surprises better. The government should also not ignore the risks associated with this. It will take quite a long to free the economy off oil imports. Hence, the government should think beyond the next election to end the country’s excessive reliance on oil for its development.

Direction: ​Read the following passage and answer the question given below. Some words may be highlighted read carefully.

Indian economy is directly related to the volatile price of oil. At an international meeting of ministers a few weeks ago, the Prime Minister urged the ministers to reduce the cost of energy to help the global economy recover. The minister also called for a review of payment terms, advising the partial use of the rupee instead of the U.S. dollar to pay for oil, in order to lessen the burden on oil-importing countries in the wake of the strengthening of the dollar. With the majority of its oil demand being met through imports, India clearly has a lot at stake as oil prices have risen considerably in rupee terms in the last few years. Speaking at the same event, one of the foreign ministers refused to openly commit to lower oil prices. He instead said that the price of oil could have been much higher but for the efforts taken by his country to boost supply. This is not surprising given the absence of significant rival suppliers in the global oil market willing to help out India. One more suggested solution to the oil problem is to utilize the domestic sources of energy supply and encourage consumers to switch to green alternatives. This should be backed by a stronger policy framework and implementation. The government should try to diversify its international supplier base to manage sudden surprises better. The government should also not ignore the risks associated with this. It will take quite a long to free the economy off oil imports. Hence, the government should think beyond the next election to end the country’s excessive reliance on oil for its development.

Direction: ​Read the following passage and answer the question given below. Some words may be highlighted read carefully.

Indian economy is directly related to the volatile price of oil. At an international meeting of ministers a few weeks ago, the Prime Minister urged the ministers to reduce the cost of energy to help the global economy recover. The minister also called for a review of payment terms, advising the partial use of the rupee instead of the U.S. dollar to pay for oil, in order to lessen the burden on oil-importing countries in the wake of the strengthening of the dollar. With the majority of its oil demand being met through imports, India clearly has a lot at stake as oil prices have risen considerably in rupee terms in the last few years. Speaking at the same event, one of the foreign ministers refused to openly commit to lower oil prices. He instead said that the price of oil could have been much higher but for the efforts taken by his country to boost supply. This is not surprising given the absence of significant rival suppliers in the global oil market willing to help out India. One more suggested solution to the oil problem is to utilize the domestic sources of energy supply and encourage consumers to switch to green alternatives. This should be backed by a stronger policy framework and implementation. The government should try to diversify its international supplier base to manage sudden surprises better. The government should also not ignore the risks associated with this. It will take quite a long to free the economy off oil imports. Hence, the government should think beyond the next election to end the country’s excessive reliance on oil for its development.