UPSC Prelims 2013 · CSAT

Question 25: Reading Comprehension

Passage beginning “Financial markets in India have acquired greater…” — Passage · as printed by UPSC

The Indian financial markets are affected by global changes mainly due to the

aincreased inflow of remittances from abroad.

benormous increase in the foreign exchange reserves.

cgrowing global linkages and integration of the Indian financial markets.

dcontagion of Greece’s sovereign debt problem.

AnswerUPSC’s answer is (c).

The passage says reforms since 1991 have increased the linkages of the Indian economy and its financial system with the global economy, and that is why global developments affect Indian markets. Remittances and foreign exchange reserves are not discussed as causes. Greece's debt contagion is cited as one example of how global stress reached India, not as the main reason. The main reason is the growing global linkage and integration of the Indian financial markets.

Why each option is right or wrong

(a) Wrong. Remittances are not discussed as a cause.
(b) Wrong. The passage does not mention reserves.
(c) Right. Growing linkages and integration with the global economy are named as the cause.
(d) Wrong. Greece's problem is one example of contagion, not the main reason.

Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 2013, General Studies Paper II (CSAT), Series A. The paper on upsc.gov.in.