Reading Comprehension is a high-scoring topic in the English Language section of bank exams. Solving passage-based quizzes regularly helps improve comprehension, analytical thinking, and question-solving speed. Attempt Reading Comprehension Quiz 2, featuring one passage and 20 practice questions, to strengthen your exam preparation and boost your confidence.
Reading Comprehension Quiz 02 Passage
A change in the policy interest rate does not reach households and businesses instantly. Banks first reassess their funding costs, liquidity position, competition, and expectations before altering deposit and lending rates. Borrowers then decide whether revised rates are large enough to change plans for homes, vehicles, factories, or inventories. The effect on overall demand therefore travels through several stages and may be stronger in some sectors than in others. This transmission can also weaken when banks carry stressed balance sheets or when borrowers are unwilling to invest despite cheaper credit. Monetary policy is consequently powerful, but its impact depends on the condition of the financial system and the confidence of economic participants.
FREE Reading Comprehension Quiz 02
Read the passage carefully before attempting the questions. The following 20 practice questions are based on the passage and will help you improve your reading accuracy, vocabulary, and ability to identify key ideas and inferences.
1. Why does a policy-rate change not affect borrowers immediately?
2. Which factors do banks reassess before changing rates?
3. Which statement is true according to the passage?
4. What can be inferred about cheaper credit?
5. What is the central idea of the passage?
6. Choose the synonym of ‘altering’.
7. Choose the antonym of ‘weaken’.
8. The phrase ‘travels through several stages’ suggests that monetary policy:
9. The tone of the passage is best described as:
10. Which situation would most likely weaken monetary-policy transmission?
Quiz Summary
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11. Based on the passage, what is the initial step in the monetary policy transmission chain?
12. How does the impact of monetary policy vary across different economic areas?
13. According to the text, what determines whether borrowers alter their purchasing or investment plans?
14. Which of the following is NOT mentioned as a sector or area where borrower decisions might change due to revised rates?
15. What role does “confidence” play in monetary policy according to the conclusion?
16. What does the term “stressed balance sheets” refer to in the context of the passage?
17. Choose the word most similar in meaning to ‘reassess’ as used in the passage.
18. Choose the word most opposite in meaning to ‘powerful’ as used in the passage.
19. Which of the following conditions would make monetary policy transmission MOST effective?
20. What is the overall primary takeaway regarding the nature of monetary policy execution?
Quiz Summary
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