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GATE 2023 CH – Question 8

General Aptitude · Verbal Aptitude: Grammar and Vocabulary · 2 marks · Multiple choice

The World Bank has declared that it does not plan to offer new financing to Sri Lanka, which is battling its worst economic crisis in decades, until the country has an adequate macroeconomic policy framework in place. In a statement, the World Bank said Sri Lanka needed to adopt structural reforms that focus on economic stabilisation and tackle the root causes of its crisis. The latter has starved it of foreign exchange and led to shortages of food, fuel, and medicines. The bank is repurposing resources under existing loans to help alleviate shortages of essential items such as medicine, cooking gas, fertiliser, meals for children, and cash for vulnerable households.

Based only on the above passage, which one of the following statements can be inferred with certainty?

  1. According to the World Bank, the root cause of Sri Lanka's economic crisis is that it does not have enough foreign exchange.
  2. The World Bank has stated that it will advise the Sri Lankan government about how to tackle the root causes of its economic crisis.
  3. According to the World Bank, Sri Lanka does not yet have an adequate macroeconomic policy framework.
  4. The World Bank has stated that it will provide Sri Lanka with additional funds for essentials such as food, fuel, and medicines.

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Show answer and explanation

Correct answer: (C) According to the World Bank, Sri Lanka does not yet have an adequate macroeconomic policy framework.

Explanation

The World Bank will not give new financing "until the country has an adequate macroeconomic policy framework in place", which implies that Sri Lanka does not yet have one. The lack of foreign exchange is a result of the crisis, not its root cause (A). The bank only says that reforms are needed (B), and it is reusing existing loans, not giving additional funds (D).