English: Cloze Test for Upcoming Exams – Set 152

Directions(1-10): In the passage given below there are 10 blanks. Every blank has four alternative words given in options (A),(B),(C), and (D). You have to tell which word is APPROPRIATE according to the context. If all are appropriate then mark your answer as “E”.

Nor is a rate rise likely to slow investment much. The evidence for the ___1___ of investment to rates is mixed; business confidence is probably more important. If—as some think—a rate rise is a signal from the Fed that America’s economy is healthy, investment could even rise.
That leaves exports. If rising rates cause the dollar to appreciate further, American goods will become still more expensive abroad. America’s ___2___ manufacturers will not welcome that (a recent survey suggests manufacturing output ___3___ in November for the first time in three years). But another surge in the dollar is unlikely, since a rate rise in December is now widely expected.
If the Fed follows through on its forecasts, though, and raises rates faster than markets expect in 2016, the dollar may well rise further, ____4___ inflation quickly. Stanley Fischer, the Fed’s vice-chair, recently estimated that a 10% rise in the dollar reduces core inflation by half a percentage point within six months. For all her horizon-gazing, Ms Yellen is unlikely to ___5___ with rapid rate rises if they push inflation too far below target in the short term.
Further falls in commodity prices could also keep the brakes on. This would ___6___ down inflation directly, but could also reduce it indirectly by pushing up the greenback. Much of the dollar’s recent appreciation, on a trade-weighted basis, ___7___ from weakness in the Mexican peso and the Canadian dollar. Those currencies weaken when commodity prices fall, argues Paul Ashworth of Capital Economics.
Most uncertain of all is where interest rates will end up. That depends on the so-called “natural” rate of interest; the sweet-spot which balances demand and supply. This is tricky to ___8___ , but it is commonly thought to be falling, in part due to systemically slower growth since the crisis. One estimate—based on work by John Williams, a rate-setter himself—puts the inflation-adjusted natural rate of interest at -0.1%, down from 3.1% in 2000. Given an inflation target of 2%, that points to rates eventually settling at just under 2%. That is worryingly low; in 2007, before the crisis, the Fed had leeway to cut rates by over 5 percentage points.
The last time monetary policy changed in a ___9___ way was in 1947, when the Fed started raising rates from a lowly three-eights of a percent, where they had sat for five years. This time, the wait for another ___10___ near zero may not be nearly so long.

  1. atrocity
    responsiveness
    sluggishness
    avarice
    All are Correct
    Option B

     

  2. rehearsed
    braced
    embattled
    equipped
    All are Correct
    Option C

     

  3. lengthened
    augmented
    broadened
    shrank
    All are Correct
    Option D

     

  4. dampening
    persuasive
    evaporation
    accentuating
    All are Correct
    Option A

     

  5. suspend
    persist
    vacillate
    fluctuate
    All are Correct
    Option B

     

  6. experience
    drag
    gait
    operate
    All are Correct
    Option B

     

  7. conceives
    creates
    derives
    contrives
    All are Correct
    Option C

     

  8. wind off
    loosen up
    pin down
    slacken
    All are Correct
    Option C

     

  9. divergent
    inimitable
    disparate
    comparable
    All are Correct
    Option D

     

  10. plethora
    exuberant
    lavish
    stint
    All are Correct
    Option D

     


Related posts

Leave a Comment