Regular reading comprehension practice helps bank exam candidates improve their reading speed, accuracy, vocabulary, and inference skills. Attempt Quiz 6, featuring one passage and 20 questions, to strengthen your English preparation.
Reading Comprehension Quiz 10 Passage
A persistent trade deficit—where a nation’s imports consistently exceed its exports—exerts downward pressure on the domestic currency’s exchange rate. As local demand for foreign currency rises to pay for imported goods, the value of the domestic currency relative to foreign benchmarks tends to depreciate. While a weaker currency makes exports cheaper and more competitive in global markets, it simultaneously inflates the cost of imported raw materials, energy, and consumer goods. This imported inflation can pass through to domestic price levels, squeezing consumer purchasing power and escalating production costs for manufacturers. Central banks faced with rapid currency depreciation often intervene by selling foreign exchange reserves or raising interest rates to curb capital flight. However, long-term adjustment requires structural reforms to boost export competitiveness and reduce reliance on essential imports.
FREE Reading Comprehension Quiz 10
Read the passage carefully and answer the 20 questions that follow. Focus on the main idea, facts, vocabulary, and inferences to improve your comprehension skills.
1. What primary challenge do smallholder farmers in developing economies face?
1. What causes downward pressure on a nation’s domestic currency exchange rate?
2. How does currency depreciation affect a country’s exports?
3. What is a negative side effect of a weaker domestic currency mentioned in the text?
4. How do central banks typically intervene to stabilize a rapidly depreciating currency?
5. What is the central idea of the passage?
6. Choose the synonym of ‘depreciate’.
7. Choose the antonym of ‘escalating’.
8. The term ‘imported inflation’ refers to:
9. The tone of the passage is best described as:
10. What long-term action is necessary to correct persistent currency imbalances according to the text?
Quiz Summary
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11. Why does demand for foreign currency rise during a trade deficit?
12. What group suffers directly when imported inflation squeezes purchasing power?
13. What phenomenon occurs when capital leaves a country rapidly due to currency weakness?
14. Why is raising interest rates used as a tool against rapid currency depreciation?
15. Which of the following items is explicitly cited as becoming more expensive under currency depreciation?
16. Choose the word most similar in meaning to ‘intervene’ as used in the passage.
17. Choose the word most opposite in meaning to ‘competitive’ as used in the passage.
18. What creates the initial pressure that causes a local currency to lose value?
19. Why are short-term central bank interventions alone considered insufficient for long-term currency stability?
20. What dual effect does currency depreciation have on a nation’s economy?
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