#TFQOD #MBA #CAT2014 Check out our CAT Question Of the Day. Watch this space for the solution. Answer the question based on the passage given below. Eurozone leaders continue to debate how best to reinvigorate economic growth, with French and Italian leaders now arguing that the eurozone’s rigid “fiscal compact” should be loosened. Meanwhile, the leaders of the eurozone’s northern member countries continue to push for more serious implementation of structural reform. Ideally, both sides will get their way, but it is difficult to see an endgame that does not involve significant debt restructuring or rescheduling. The inability of Europe’s politicians to contemplate this scenario is placing a huge burden on the European Central Bank. Although there are many explanations for the eurozone’s lagging recovery, it is clear that the overhang of both public and private debt looms large. The gross debts of households and financial institutions are higher today as a share of national income than they were before the financial crisis. Nonfinancial corporate debt has fallen only slightly. And government debt, of course, has risen sharply, owing to bank bailouts and a sharp, recession-fueled decline in tax revenues. Yes, Europe is also wrestling with an ageing population. Southern eurozone countries such as Italy and Spain have suffered from rising competition with China in textiles and light manufacturing industries. But just as the pre-crisis credit boom masked underlying structural problems, post-crisis credit constraints have greatly amplified the downturn. According to the passage, the author is most likely to DISPUTE which of the following statements? OPTIONS 1) Neither pure austerity measures nor bank bail outs can help Eurozone countries to reinvigorate economic growth. 2) Exceptionally high public and private debts constrain a country’s economy and indisputably result in slower growth. 3) Eurozone leaders ought to realise that there is a strong case for adding more of debt in order to finance infrastructure investments. 4) Eurozone leaders ought to engage in a dialogue about debt restructuring or rescheduling.
Posted on: Sun, 19 Oct 2014 02:30:00 +0000
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