Direction: The first and sixth sentences are marked as S1 and S6. The middle four sentences in each have been jumbled up and labelled as P, Q, R and S. This is followed by four options each suggesting a sequence of the sentences. Identify the most appropriate option. S1 : Like many of its tropical counterparts, India was a colony of Britain, which ruled out any move to adjust the exchange rate. S6 : Banks were left with unrecoverable assets. P : Indebted business failed. Q : With devaluation made politically impossible, fall in export demand led to sustained and deep deflation. R : Indebted households liquidated a variety of assets to repay loans when they could. S : Real interest rates rose. The correct sequence should be and
SQPR
Solving Paragraph Jumble: India's Economic Situation
This question asks us to arrange four jumbled sentences (P, Q, R, S) into a coherent paragraph, keeping the first sentence (S1) and the sixth sentence (S6) fixed. The goal is to find the sequence that creates a logical flow of ideas, describing a cause-and-effect chain related to India's economic situation as a British colony.
Let's look at the sentences again:
- P : Indebted business failed.
- Q : With devaluation made politically impossible, fall in export demand led to sustained and deep deflation.
- R : Indebted households liquidated a variety of assets to repay loans when they could.
- S : Real interest rates rose.
Analyzing the Correct Sequence: SQPR
The task is to link S1 to the start of the sequence (P, Q, R, S) and the end of the sequence to S6. The provided correct option suggests the sequence S, Q, P, R. Let's examine how this sequence creates a logical flow from S1 to S6.
- S1: Like many of its tropical counterparts, India was a colony of Britain, which ruled out any move to adjust the exchange rate. (This sets the initial condition: India had a fixed exchange rate and could not devalue its currency).
- S follows S1: Real interest rates rose. (Given the fixed exchange rate constraint in S1, economic conditions or policy responses might have led to an increase in real interest rates. For example, if nominal interest rates were held high to defend the fixed currency rate, real rates would rise, especially if prices were falling).
- Q follows S: With devaluation made politically impossible, fall in export demand led to sustained and deep deflation. (This sentence directly links back to the fixed exchange rate issue mentioned in S1 - "devaluation made politically impossible". It explains that this lack of flexibility, combined with falling export demand, caused deflation. Rising real interest rates (S) could also contribute to deflationary pressures by reducing spending and investment).
- P follows Q: Indebted business failed. (Sustained and deep deflation (from Q) increases the real burden of debt. Businesses that were indebted found it harder to repay loans as the value of money increased, leading to failure).
- R follows P: Indebted households liquidated a variety of assets to repay loans when they could. (Similar to businesses, indebted households also faced a higher real debt burden due to deflation (Q) and high real interest rates (S). The economic distress indicated by business failures (P) could further pressure households, leading them to sell assets).
- S6 follows R: Banks were left with unrecoverable assets. (When businesses failed (P) and households struggled to repay loans, even liquidating assets (R), the banks that had lent money to them were unable to recover those loans, resulting in unrecoverable assets).
The SQPR sequence thus describes a clear chain of economic events: a fixed exchange rate constraint (S1) leads to rising real interest rates (S) and, coupled with external factors, causes deflation (Q). This deflation and high real rates then trigger a debt crisis, causing businesses to fail (P) and households to liquidate assets (R), ultimately leading to problems for the banking sector (S6).
Therefore, the sequence S → Q → P → R forms a coherent narrative explaining the economic consequences stemming from the initial condition described in S1 and culminating in the situation described in S6.
| Sentence | Economic Event/Condition | Link in SQPR Sequence |
|---|---|---|
| S1 | Fixed Exchange Rate (Colonial India) | Starting Point |
| S | Real Interest Rates Rose | Possible consequence of S1 or brewing trouble |
| Q | Deflation (due to S1 constraint + export fall) | Directly links to S1, possibly influenced by S |
| P | Indebted Business Failed | Consequence of Q and S (debt burden increases) |
| R | Indebted Households Liquidated Assets | Consequence of Q and S, follows P |
| S6 | Banks Left with Unrecoverable Assets | Result of P and R |
Revision Table: Key Economic Concepts
| Concept | Explanation |
|---|---|
| Exchange Rate | The value of one currency in terms of another. A fixed exchange rate is maintained at a specific level by the government/authority. |
| Devaluation | A deliberate downward adjustment to the value of a country's currency relative to another currency, typically in a fixed exchange rate system. |
| Deflation | A general decline in the price level of goods and services, which causes the purchasing power of money to increase. |
| Real Interest Rate | The nominal interest rate minus the rate of inflation. In deflation, the real interest rate is higher than the nominal rate because the value of money increases. \text{Real Rate} \approx \text{Nominal Rate} - \text{Inflation Rate} If inflation is negative (deflation), real rate > nominal rate. |
| Debt Burden | The amount of debt owed relative to income or assets. Deflation increases the real debt burden because the amount owed stays fixed while the value of the money used to repay it increases. |
Additional Information: Economic Impact of Fixed Exchange Rates and Deflation
Having a fixed exchange rate, especially in a colonial context, meant that India's economic policy options were limited. It could not use currency devaluation as a tool to make its exports cheaper and boost demand during a downturn. This inflexibility, as stated in Q, contributed significantly to the deflation.
Deflation is often harmful to an economy because it increases the real value of debt. If prices fall, the money you borrowed is worth more in real terms when you have to pay it back. This makes repayment harder for both businesses and households, potentially leading to bankruptcies and defaults, as described in P and R. Rising real interest rates exacerbate this problem, making borrowing more expensive in real terms and increasing the cost of existing variable-rate debt.
When borrowers (businesses and households) fail to repay their loans, the lenders (banks) suffer. This results in a rise in non-performing assets (NPAs) or unrecoverable assets, as mentioned in S6, weakening the banking system and potentially leading to a financial crisis.
Similar Questions
Direction: The first and sixth sentences are marked as S1 and S6. The middle four sentences in each have been jumbled up and labelled as P, Q, R and S. This is followed by four options each suggesting a sequence of the sentences. Identify the most appropriate option.
S1 : Consider the potential effect of just a small increase in the earth's atmospheric temperature.
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The correct sequence should be
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S1 : Vijayanagara or 'city of victory' was the name of both a city and an empire.
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R : In 1565, the city was destroyed and subsequently deserted.
S : Although it fell into ruin in the seventeenth-eighteenth centuries, it lived on in the memories of people living in the Krishna-Tungabhadra Doab.)
The correct sequence should be
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S1 : Mahatma Gandhi found in salt a powerful symbol that could unite the nation.
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P : On 31 January, 1930, he sent a letter to Viceroy Irwin stating eleven demands.
Q : The idea was to make the demands wide-ranging, so that all classes within Indian society could identify with them and everyone could be brought together in a united campaign.
R : Salt was something consumed by the rich and the poor alike, and it was one of the most essential items of food.
S : The most stirring of all was the demand to abolish the salt tax.
The correct sequence should be
Direction: In this section, item consists of six sentences of a passage. The first and sixth sentences are marked as S1 and S6. The middle four sentences in each have been jumbled up and labelled as P, Q, R and S. This is followed by four options each suggesting a sequence of the sentences. Identify the most appropriate option.
S1 : In agriculture, water is mainly used for irrigation.
S6 : Hence, it is difficult to practice agriculture without assured irrigation during dry seasons.
P : The large tracts of the country are deficient in rainfall and are drought prone.
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R : Irrigation is needed because of spatio-temporal variability in rainfall in the country.
S: North-Western India and Deccan Plateau constitute such areas.
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S1 : Manipur has a long and glorious history from before the beginning of the Christian Era.
S6 : Manipur regained its independence in 1947 and merged into Indian Union in 1949.
P : Then, Manipur came under the British rule in 1891.
Q : The independence and sovereignty remained uninterrupted until the Burmese invasion and occupation for around seven years in the first quarter of the 19th century (1819-1826).
R : The political history of Manipur could be traced back to 33 AD with the coronation of Nongda Lairen Pakhangba.
S : After Pakhangba, a number of kings ruled over the Kingdom of Manipur.
The correct sequence should be
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S1: According to the legend it was during a famine in China many thousands of years ago that rice first came into the lives of the Asians.
S6: And the little girl gathered a harvest of rice.
P: The golden sunbeams dropped through the meshes and transformed themselves into golden grams.
Q: A little girl went fishing.
R: But instead of catching fish she netted the King of Frogs.
S: The King told her to hold out the net to the sunbeams while he sang a magic song.
The proper sequence should be:
The following question consists of six sentences of a passage. The first and the sixth sentences are given in the beginning as S1 and S6. The middle four sentences in each have been jumbled up and labelled P, Q, R and S. You are required to find the proper sequence of the four sentences and mark your response accordingly.
S1: Ramu was in a great hurry.
S6: Fortunately, it wasn’t a very serious one.
P: As a result of this carelessness, he met with an accident.
Q: The examination was to begin in five minutes time.
R: He just rushed across the road.
S: So he forgot to look to the left or right as he always did.
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S1: One fine morning, I heard a sound of fire engines with loud alarm bells.
S6: It was a terrible scene, as huge flames of fire were coming out of the house.
P: I thought, perhaps a house was on fire.
Q: They were regulating the crowd.
R: The policemen were standing around a big house.
S: I immediately rushed out to see what was happening.
The proper sequence should be
Important Questions from Para Jumbles
Rearrange the 4 disorganized sentences P, Q, R and S to form a meaningful paragraph.
P : cricket is a religion in India and
Q : most of the other sports suffer
R : due to the extra importance given to cricket as a game
S : it is known to all
Proper order is
A. PQSR
B. PSQR
C. QSPR
D. SPRQ
Rearrange the 4 disorganized sentences P, Q, R and S to form a meaningful paragraph.
P : is mostly produced in rural farms
Q : India is a leading producer of
R : milk is the most important of them and
S : dairy products by volume
Proper order is
A. SRPQ
B. QSPR
C. QPSR
D. QSRP
Rearrange the 4 disorganized sentences P, Q, R and S to form a meaningful paragraph.
P: mostly decided by the market conditions
Q: Sometimes, a United States dollar is worth only 12 pesos in Mexico
R: the rates of exchange between them vary from time to time
S: and some other time it can be 100 pesos
Proper order is -
A. PRSQ
B. QPRS
C. QSRP
D. QSPR
Directions: Given below are four jumbled sentences. Out of the given options select the one that gives their correct order.
A. Anush was very afraid of stray dogs.
B. Anush’s mother saw the dog chasing her son.
C. One evening, when a street dog barked at him, Anush turned and started running.
D. The dog ran after him barking loudly and fiercely.
Sentences of a paragraph are given below in jumbled order. Arrange the sentences in the right order to form a meaningful and coherent paragraph.
A. In arid regions it may form an almost erect shrub.
B. The grape is usually a woody vine, climbing by means of tendrils and often reaching a length of 17 metres or more.
C. Small greenish flowers, in clusters, precede the fruit, which varies in colour from almost black to green, red and amber.
D. The edible leaves are alternate, palmately lobed and always tooth-edged.
