Direction: In the following passage, some words have been deleted. Fill in the…
2025
Direction: In the following passage, some words have been deleted. Fill in the blanks with the help of the alternatives given. Select the most appropriate option for each number.
India’s economy is set for its biggest annual ______(1)______ in records going back to 1952 as the rapid spread of coronavirus cases and measures to contain them hurt businesses and households. The gross domestic product will shrink 7.7% in the financial year ending March 2021, the statistics ministry said in its first advance ______(2)______ published on Thursday. That’s steeper than a 7.5% drop ______(3)______ by the Reserve Bank of India, as well as economists surveyed by Bloomberg.
Question:
Which of these words most appropriately fits the blank labelled (1)?
- A.
Recession
- B.
Decrement
- C.
Contraction
- D.
Deflation
Attempted by 8 students.
Show answer & explanation
Correct answer: C
Answer: Contraction
Explanation
The sentence refers to India’s gross domestic product (GDP) shrinking over an entire financial year. 'Contraction' is the standard term used to describe a decline in economic output over a period, so it fits the context best.
Recession — an economic downturn often defined as two consecutive quarters of negative GDP growth; it emphasizes a short-term quarterly pattern rather than an annual measurement.
Decrement — a general reduction; not commonly used to describe national GDP movements and sounds awkward in this context.
Contraction — a decline in economic activity or output; appropriate for describing an annual fall in GDP.
Deflation — a sustained drop in the general price level; this term refers to prices, not directly to GDP shrinkage.
Conclusion
Because the passage speaks about the largest annual fall in GDP, 'contraction' is the most accurate and natural choice: "India’s economy is set for its biggest annual contraction in records going back to 1952."
Tip:
Use 'contraction' for declines in output, 'recession' when referring to two negative quarters, and 'deflation' when referring to falling prices.