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Question

Since the last one year, after a 125 basis point reduction in repo rate by the Reserve Bank of India, banking institutions have been making a demand to reduce interest rates on small saving schemes. Finally, the government announced yesterday a reduction in interest rates on small saving schemes to bring them on par with fixed deposit interest rates.

Which one of the following statements can be inferred from the given passage?

The correct answer is
The government sometimes takes into consideration the demands of banking institutions before reducing the interest rates on small saving schemes

Inference from Small Savings Rate Passage

The passage describes a sequence of events: a reduction in the repo rate by the Reserve Bank of India (RBI), subsequent demands from banking institutions for lower interest rates on small saving schemes, and finally, the government's decision to reduce these rates to align them with fixed deposit rates.

Analyzing Option Statements

  • Option 1: This statement claims that *whenever* the RBI reduces the repo rate, small saving rates are reduced. The passage only provides one instance, not a consistent pattern. Therefore, this broad generalization cannot be inferred.
  • Option 2: This statement suggests small saving scheme interest rates are *always* maintained at par with fixed deposit rates. The passage states the government announced a reduction *to bring them on par*, implying they were not previously at par. The word "always" makes this inference incorrect.
  • Option 3: This statement posits that the government *sometimes* considers banking institutions' demands before reducing small saving scheme rates. The passage explicitly mentions that banking institutions made demands, and *finally*, the government made the reduction. This strongly suggests their demands were taken into account. The qualifier "sometimes" is appropriate as we are inferring from a single event.
  • Option 4: This statement asserts that a reduction in small saving rates follows *only after* a repo rate reduction. While the passage shows this sequence, it doesn't exclude other factors (like banking demands) or state that a repo rate cut is the *sole* prerequisite. The government's action appears influenced by multiple factors mentioned.

Conclusion on Inference

Based on the passage, the most logical inference is that the government takes banking institutions' demands into consideration, as evidenced by the sequence of events described. Therefore, Option 3 is the most accurate inference.

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Important Questions from Inference

  1. Language X is in vigorous use, with literature in a standardized form being used by some, though this is not yet widespread or sustainable. Based on the EGIDS scale by Lewis and Simons 2010, what is the status of the language X?
  2. The Chāndogya Upaniṣad gives the mahāvākya – Tat tvam asi (Ch. Upa. 6:8:7), ‘That you are.' In this ‘great statement' what does “tat” (“that”) stand for?
  3. Thousands of years ago, some people began dairy farming. This coincided with a number of mutations in a particular gene that resulted in these people developing the ability to digest dairy milk. 
    Based on the given passage, which of the following can be inferred?

  4. The information contained in DNA is used to synthesize proteins that are necessary for the functioning of life. DNA is composed of four nucleotides: Adenine (A), Thymine (T), Cytosine (C), and Guanine (G). The information contained in DNA can then be thought of as a sequence of these four nucleotides: A, T, C, and G. DNA has coding and non-coding regions. Coding regions—where the sequence of these nucleotides are read in groups of three to produce individual amino acids—constitute only about 2% of human DNA. For example, the triplet of nucleotides CCG codes for the amino acid glycine, while the triplet GGA codes for the amino acid proline. Multiple amino acids are then assembled to form a protein. 
    Based only on the information provided above, which of the following statements can be logically inferred with certainty? 
    (i) The majority of human DNA has no role in the synthesis of proteins. 
    (ii) The function of about 98% of human DNA is not understood.

  5. 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?

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