UPSC Prelims 2023 · CSAT

Question 22: Reading Comprehension

Passage beginning “Good corporate governance structures encourage companies…” — Passage – 2 · as printed by UPSC

Which of the following statements best reflects the logical inference from the passage given above ?

aIt is an important agenda of the countries around the world to ensure access to good external financing.

bGood corporate governance improves the credibility of the firms.

cInternational capital markets ensure that the firms maintain good corporate governance.

dGood corporate governance paves the way for robust supply chains.

AnswerUPSC’s answer is (b).

The passage says good corporate governance helps firms reach external finance, which leads to more investment, growth and jobs, because investors put money where disclosure, accurate reporting and fair treatment of all stakeholders are assured. The logical inference is that good governance makes a firm more credible to those who finance it. Capital markets are named as a reason governance became prominent, not as something that enforces it, and supply chains are never mentioned.

Why each option is right or wrong

(a) Wrong: the passage ties governance to financing but does not say countries make financing access their agenda.
(b) Right: governance that reassures investors makes the firm more credible.
(c) Wrong: capital markets explain why governance matters; the passage does not say they ensure it.
(d) Wrong: supply chains are not mentioned.

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

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Source: UPSC, Civil Services (Preliminary) Examination 2023, General Studies Paper II (CSAT), Series A. The paper on upsc.gov.in.