The domestic economy expanded in a remarkably vigorous and steady fash

Question

The domestic economy expanded in a remarkably vigorous and steady fashion. The resurgence in consumer confidence was reflected in the higher proportion of incomes spent for goods and services and the marked increase in consumer willingness to take on installment debt. A parallel strengthening in business psychology was manifested in a stepped-up rate of plant and equipment spending and a gradual pickup in outlays for inventory. Confidence in the economy was also reflected in the strength of the stock market and in the stability of the bond market. For the year as a whole, consumer and business sentiment benefited from rising public expectations that a resolution of the conflict in Vietnam was in prospect and that East-West tensions were easing.

The United States balance of payments deficit declined sharply. Nevertheless, by any other test, the deficit remained very large, and there was actually a substantial deterioration in our trade account to a sizable deficit, almost two thirds of which was with Japan.

The underlying task of public policy for the year ahead—and indeed for the longer run—remained a familiar one: to strike the right balance between encouraging healthy economic growth and avoiding inflationary pressures. With the economy showing sustained and vigorous growth, and with the currency crisis highlighting the need to improve our competitive posture internationally, the emphasis seemed to be shifting to the problem of inflation. The Phase Three program of wage and price restraint can contribute to dampening inflation. Unless productivity growth is unexpectedly large, however, the expansion of real output must eventually begin to slow down to the economy’s larger run growth potential if generalized demand pressures on prices are to be avoided. Indeed, while the unemployment rates of a bit over five percent were still too high, it seems doubtful whether the much lower rates of four percent and below often cited as appropriate definitions of full employment do in fact represent feasible goals for the United States economy—unless there are improvements in the structure of labor and product markets and public policies influencing their operation. There is little doubt that overall unemployment rates can be brought down to four percent or less, for a time at least, by sufficient stimulation of aggregate demand. However, the resultant inflationary pressures have in the past proved exceedingly difficult to contain.    1 
 1. The passage was most likely published in a

(A) popular magazine
(B) general newspaper
(C) science journal
(D) financial journal
(E) textbook

2 
 2. Confidence in the economy was expressed by all of the following except

(A) a strong stock market
(B) a stable bond market
(C) increased installment debt
(D) increased plant and equipment expenditures
(E) rising interest rates

3 
 3. According to the passage, a major problem is how to

(A) sustain economic growth
(B) improve labor productivity
(C) balance growth with low inflation
(D) stimulate demand
(E) avoid large increases in imports

4 
 4. Most of the trade deficit in the balance of payments was attributed to trade with which country?

(A) United Kingdom
(B) Japan
(C) Germany
(D) France
(E) Saudi Arabia

RC Butler 2022  -  Practice Two RC Passages Everyday.   
Passage # 96 Date: 07-Mar-2022
 This question is a part of RC Butler 2022 .  Click here for Details

vasutandon · Answer

can someone expalin question 2?

Sajjad1994 · Answer

Read paragraph 1 carefully;  A, B, C,  and  D  are all discussed; only  E  is not mentioned and hence is the answer.

Answer: E

Ghostrider3147 · Answer

Q3)option c correct answer.
Hint:- The underlying task of public policy for the year ahead—and indeed for the longer run—remained a familiar one: to strike the right balance between encouraging healthy economic growth and avoiding inflationary pressures. 
Q4) option B- Japan correct.
The United States balance of payments deficit declined sharply. Nevertheless, by any other test, the deficit remained very large, and there was actually a substantial deterioration in our trade account to a sizable deficit, almost two thirds of which was with Japan.
Q2) optionE- correct. 
All of them given except, rising interest rates.

Q1)option D correct.

I guessed the correct answer.
If anyone can explain the valid explanation would be really helpful for me and please share the method with which you chose the correct answer.

Posted from my mobile device

roh1714 · Answer

1. The passage was most likely published in a

(A) popular magazine- unlikely
(B) general newspaper- unlikely because the language or tone doesn't resemble that of a newspaper
(C) science journal- doesn't use science terms
(D) financial journal-  CORRECT  uses the terms and ideas related to finance, shows knowledge.
(E) textbook- D is a more apt option

VerbalBot · Answer

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The domestic economy expanded in a remarkably vigorous and steady fash

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GMAT Reading Comprehension (RC) Questions

The domestic economy expanded in a remarkably vigorous and steady fash

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