UPSC Prelims 2024 · CSAT

Question 3: Reading Comprehension

Passage beginning “As inflation rises, even governments previously…” — Passage—2 · as printed by UPSC

Which of the following statements best reflects/reflect the most logical and rational inference/inferences that can be made from the passage?

1.Central banks cannot bring down inflation without budgetary backing.
2.The effects of monetary policy depend on the fiscal policies pursued by the government.

Select the correct answer using the code given below.

a1 only

b2 only

cBoth 1 and 2

dNeither 1 nor 2

AnswerUPSC’s answer is (c).

The passage argues that higher interest rates push governments to borrow more to meet rising debt-service costs, so rate rises can fuel inflation instead of curbing it, and that without fiscal support monetary policy loses its grip. Statement 1 restates this: central banks alone cannot bring inflation down. Statement 2 follows too: how well monetary policy works depends on what governments spend and borrow. Both are drawn directly from the passage's argument.

1. Without fiscal backup monetary policy loses traction, so inflation control needs budget support.
2. Whether rate changes work depends on how governments spend and borrow.

How you could have got this

If you were sure statement 1 is correct, (b) and (d) go: each of them leaves 1 out.
What you needed to know: Without fiscal backup monetary policy loses traction, so inflation control needs budget support.
Then, if you were sure statement 2 is correct, (a) goes: it leaves 2 out.
What you needed to know: Whether rate changes work depends on how governments spend and borrow.

Only (c) is left. This one needs every statement.

Which options go is worked out from UPSC’s key and the options, not by a model.

Why each option is right or wrong

(a) Wrong. Statement 1 is valid, but statement 2 is also directly supported.
(b) Wrong. Statement 2 is valid, but statement 1 also follows from the point about fiscal backup.
(c) Right. Both follow: monetary policy depends on fiscal support, so central banks alone cannot tame inflation.
(d) Wrong. The passage's central argument is the dependence of monetary policy on fiscal policy.

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

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Source: UPSC, Civil Services (Preliminary) Examination 2024, General Studies Paper II (CSAT), Series A. The paper on upsc.gov.in.