UPSC Prelims 2010 · General Studies
Question 43: Economy and Social Development
In the context of Indian economy, consider the following pairs :
| Term | Most appropriate description | |
|---|---|---|
| 1 | Melt down | Fall in stock prices |
| 2 | Recession | Fall in growth rate |
| 3 | Slow down | Fall in GDP |
Which of the pairs given above is/are correctly matched ?
AnswerThe answer is (a).
A meltdown is a sharp collapse in stock prices, so pair 1 is right. A recession is a period of falling output, usually at least two consecutive quarters of declining GDP, not merely a lower growth rate, so pair 2 is wrong. A slowdown is a fall in the growth rate of GDP, while output may still be rising, not a fall in GDP, so pair 3 is wrong. The descriptions of recession and slowdown have in effect been swapped. Remember: slowdown = growth slows; recession = output falls.
- 1. A meltdown is a sharp fall in stock prices.
- 2. Recession is a fall in output, not just in the growth rate.
- 3. A slowdown is a lower growth rate, not a fall in GDP.
Why each option is right or wrong
- (a) Right: only the meltdown pair is correct.
- (b) Both pairs 2 and 3 are wrongly matched.
- (c) Pair 3 is wrong: a slowdown is a fall in the growth rate.
- (d) Pairs 2 and 3 are wrong.
Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2010, General Studies, Series A. The paper on upsc.gov.in.