STATE BANK
OF PAKISTAN
BANKING
SERVICES CORPORATION
OFFICERS
(OG-1) 8TH BATCH
SAMPLE PAPER
SECTION 1 -
ENGLISH
SECTION 1 -
ENGLISH
Read the following passage carefully
and answer questions 1 and 2.
The relevance of formal
economic models to real-world policy has been a topic of some dispute. The
economist R.D. Norton and S.Y. Rhee achieved some success in applying such a
model retrospectively to the Korean economy over a fourteen-year period. The
model’s figures for output, prices and other variables closely matched real
statistics. The model’s value in policy terms, however, proved less clear-cut.
Norton and Rhee performed simulations in which, keeping long term factors
constant, they tried to pinpoint the effect of short-term policy changes. Their
model indicated that rising prices for imported oil would increase inflation,
reducing exports by 5 percent would lower Gross Domestic Product and increase
inflation and slowing the growth of money supply would result in slightly
higher inflation.
These findings are somewhat startling. Many economists have
argued that reducing exports will lessen, not increase, inflation. And while
most view escalating oil costs as inflationary, few would think the same of
slower monetary growth. The Norton-Rhee model can perhaps be viewed as
indicating the pitfalls of a formalist approach that stresses statistical
“goodness of fit” at the expense of genuine policy relevance.
Q1. In the passage, the author is primarily
concerned with:
A. Suggesting
an explanation for Korean inflation.
B. Criticizing
an overly formal economic model.
C. Advocating
the use of statistical models in determining economic policy.
D. Proposing a
new type of economic analysis.
Q2. The author mentions a “fourteen-year” period
in order to:
A. Indicate how
far into the future the model can make accurate forecasts.
B. Acknowledge
the accuracy of Norton and Rhee’s model in account of past events.
C. Explain the
effects of reducing exports on inflation.
D. Expose the
flaws in Norton and Rhee’s model.
Select
the correct SYNONYM (similar meaning) for the word from the given options.
Q3. SAGE
Q3. SAGE
A. Wise
B. Inattentive
C. Hasty
