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Professional English for Commerce & Management - II
1st Year 2nd Semester Softskill paper
Unit -1 – Communicative Competencies
3. Reading
I. Read the following Comprehension Passage: (Book Page No:14)
1. Which of the following is TRUE in the context of the passage?
a) Boom in an economy can be caused by cutting down
the government expenditure.
b) Central bank
is solely responsible to bring a boom/ recession in the economy by changing the
interest rates.
c) Full
employment level of output can be maintained in an economy forever.
d) Post World War II the inflation rates fell but
didn’t become negative as compared to pre-World War II.
A) Both b) and c)
B) Both b) and d)
C) Both c) and d)
D) Only b)
Answer: C) Both c) and d)
2. In a perfect scenario of Full employment what can
cause a business cycle to occur?
a) A wave of optimism among consumers and producers.
b) When the government’s expenditure exceeds its
income.
c) When government’ income exceeds its expenditure or
reduction in government spending.
d) Pessimism among government officials.
A) All of these
B) Both a) and b)
C) Both b) and c)
D) All a), b) and c)
E) Only b)
Answer: D) All a), b) and c)
3. Prewar
depressions, including the one of 1908, 1921 and great depression of 1930s were
the result of which phenomena?
A) Increase in money supply
B) decrease in money supply
C) Rise in real interest rates.
D) both A) and B)
E) both B) and C)
Answer: E) both B) and C)
4. What theory does the alternative view or classical
view hold?
A) Modern economies are rigid.
B) Change in
spending does not necessarily change output and employment.
C) both A) and B)
D) business cycles are the result of changes in
aggregate demand
E) both B) and D)
Answer: B) Change in spending does not necessarily
change output and employment.
5. How does the monetary policy affects the spending habits of the
public?
A) It influences the size and growth rate of money stock and eventually
the rates of interests.
B) In case of high interests, a firm may postpone its decision to build
a
factory.
C) Monetary policy stances adopted by the central bank can throw an
economy into expansion or depression.
D) Monetary policy affects the magnitude of the money supply in the
economy.
E) All of these.
Answer: B) In case of high interests, a firm may
postpone its decision to build a factory.
6. In an economy, where interest rates are low what could be the
possible
outcome?
A) Such an economy reflects a period of depression.
B) Public will be willing to borrow more as the cost of money rises.
C) Banks will be willing to lend more.
D) The monthly repayments of mortgage will decrease.
Answer: D) The monthly repayments of mortgage will
decrease.
7. What can we infer from the paragraph regarding the full employment
situation?
A) Full employment is an economic situation of optimal utilization of
all resources available.
B) Full
employment is an economic situation in which all available resources are being
used in the most efficient way that they wear out, break down, or insist on
higher wages and more vacations.
C) Full employment is the situation of employment provided to all the
skilled labour.
D) all of these.
Answer: B) Full employment is an economic situation in
which all available resources are being used in the most efficient way that
they wear out, break down, or insist on higher wages and more vacations.
8. What was the main cause of business cycles in the US post world war
II?
A) Changes in public and private expenditure.
B) Changes in demand pattern
C) Monetary policy
D) disturbances in the economy.
Answer: C) Monetary policy.
9. What can be the suitable title of the passage?
A) Monetary policy
B) business cycles
C) Keynesian view and alternative view on business cycles.
D) Effects of business cycles on unemployment.
Answer: B) Business cycles.
10. What is recession according to Burns and Mitchell?
A) When a broad range of economic indicators falls for a short period.
B) When a broad range of economic indicators falls for a very long
period
may be 1 year.
C) When a broad range of economic indicators falls for an unrelenting
period of time like 6 months.
D) All of these
Answer: C) When a broad range of economic indicators falls for an unrelenting period of time like 6 months.
II. Answer the following questions in connection with
the passage!
1. What is business cycle?
Answer: Business cycles are identified as having four distinct phases:
expansion, peak, contraction, and trough. Business cycles are identified as
having four distinct phases: expansion, peak, contraction, and trough.
2. How do economic indicators play an important role in expansion and
recession?
Answer: An economic indicator is a statistic about an economic
activity.
3. How is the Federal Reserve able to generate recessions or booms?
Answer: By raising or lowering interest rates, the Federal
Reserve is able to generate recessions or booms.
4. What were the effects of Monetary Policy on the United States of
America?
Answer: Monetary policy, in particular, appears to have played a
crucial role in causing business cycles in the United States since World War
II. For example, the severe recessions of both the early 1970s and the early
1980s were directly attributable to decisions by the Federal Reserve to raise
interest rates. On the expansionary side, the inflationary booms of the
mid-1960s and the late 1970s were both at least partly due to monetary ease and
low interest rates. The role of money in causing business cycles is even stronger
if one considers the era before World War II.
5. What are the reasons for pre-war depressions?
Answer: Many of the worst prewar depressions, including the recessions
of 1908, 1921, and the Great Depression of the 1930s, were to a large extent
the result of monetary contraction and high real interest rates. In this
earlier era, however, most monetary swings were engendered not by deliberate
monetary policy but by financial panics, policy mistakes, and international
monetary developments.
Primary Text – 2 (Book Page No:18)
I. Based on the Passage, answer the following questions:
1. Which of the following best states the central idea of the passage?
(A) The use of MESBIC’s for aiding minority entrepreneurs seems to have
greater potential for success than does the original SBA approach.
(B) There is a crucial difference in point of view between the staff
and directors of some MESBIC’s.
(C) After initial problems with management and marketing, minority
businesses have begun to expand at a steady rate.
(D) Minority entrepreneurs wishing to form new businesses now have
several equally successful federal programs on which to rely.
(E) For the first time since 1960, large corporations are making
significant
contributions to the development of minority businesses
Answer:(A) The
use of MESBIC’s for aiding minority entrepreneurs seems to have greater
potential for success than does the original SBA approach.
2. According to the passage, the MESBIC approach differs from the SBA
approach in that MESBIC’s
(A) Seek federal contracts to provide markets for minority businesses
(B) Encourage minority businesses to provide markets for other minority
businesses
(C) Attempt to maintain a specified rate of growth in the minority
business sector
(D) Rely on the participation of large corporations to finance minority
businesses
(E) Select minority businesses on the basis of their location
Answer: (D) Rely on the participation of large
corporations to finance minority businesses.
3. Which of the following does the author cite to support the
conclusion
that the results of the SBA program were disappointing?
(A) The small number of new minority enterprises formed as a result of
the program
(B) The small number of minority enterprises that took advantage of the
management and technical assistance offered under the program
(C) The small percentage of the nation’s business receipts earned by
minority enterprises following the programs, implementation.
(D) The small percentage of recipient minority enterprises that were
able to repay federally guaranteed loans made under the program
(E) The small number of minority enterprises that chose to participate
in the program
Answer: C) The small percentage of the nation’s
business receipts earned by minority enterprises following the programs,
implementation.
4. Which of the following statements about the SBA program can be
inferred from the passage?
(A) The maximum term for loans made to recipient businesses was 15
years.
(B) Business loans were considered to be more useful to recipient
businesses than was management and technical assistance.
(C) The anticipated failure rate for recipient businesses was
significantly lower than the rate that actually resulted.
(D) Recipient businesses were encouraged to relocate to areas more
favorable for business development.
(E) The capitalization needs of recipient businesses were assessed and
then provided for adequately
Answer: (C) The anticipated failure rate for recipient
businesses was significantly lower than the rate that actually resulted.
5. The author’s primary objective in the passage is to
(A) Disprove the view that federal efforts to aid minority businesses
have been ineffective
(B) Explain how federal efforts to aid minority businesses have changed
since the 1960’s
(C) Establish a direct link between the federal efforts to aid minority
businesses made before the 1960’s and those made in the 1980’s
(D) Analyze the basis for the belief that job-specific experience is
more useful to minority businesses than is general management experience
(E) Argue that the “social responsibility approach” to aiding minority
businesses is superior to any other approach
Answer: (B) Explain how federal efforts to aid
minority businesses have changed since the 1960’s
II. Elaborate the Acronym given below!
1. SBA - Small Business Administration
2. ROI - Return on investment
3. GDP - Gross domestic product
4. AGM - Annual General Meeting
5. MESBIC - Minority Enterprise Small Business Investment Corporations
6. P/E - Price-to-Earnings
7. P&L - Profit and Loss
8. KPIs - Key Performance Indicator.
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