- DI & DS
- English Language
- GK
-
Intelligence & CR
- Alphabet & Number Ranking
- Analytical Reasoning
- Blood Relations Test
- Coding - Decoding
- Comparision of Ranks
- Direction Sense Test
- Mathematical Operation / Number Puzzles
- Series
- Sitting Arrangement
- Statement and Arguement
- Statement and Conclusion
- Statement and Course of Action
- Statement-Assumption
- Syllogism
-
Mathematical Skills
- Average
- Calender
- Clocks
- Geometry
- Height and Distance
- Logarithms
- Mensuration
- Mixtures and Alligations
- Number System
- Percentage
- Permutation and Computation
- Probability
- Profit and Loss
- Ratio and Proportion
- Set Theory
- Simple calculations
- Simple Equations
- Simple Interest and Compound Interest
- Time and Work
- Time, Speed and Distance
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109.
Early books on business strategy aimed to structure and codify the many documentary histories and memoirs of business leaders. They contained precious little theory or models drawn from economics or other social sciences. They do contain many good ideas but few frameworks in which to place them. There was limited guidance as to when and where anyone idea would or would not work. Just because an idea was useful in one company at one moment in time, does not mean it will always work. Gradually ideas and models emerged that provided the necessary structure to the chaos of anecdotal memories. First we need to distinguish between corporate and business level strategy. At the corporate level, businesses need to ask themselves fundamental questions such as 'Which business should we be in?' At the business level, a business needs to ask itself, 'How do we compete?' It is at this latter level that we position our thinking. The organization has decided that it will compete in a certain market and is seeking ways to optimise what it does in pursuit of its goals, in other words, what its strategy should be. How we think about business strategy has evolved and changed as new and better ideas have become more widely known and accepted and as the needs of business have changed. Business strategy has had many definitions but these are two that give a sense of what is involved irrespective of where we are in time: 'Strategy is about matching the competencies of the organization to its environment. A strategy describes how an organization aims to meet its objectives'.
The changing environment for any business can be understood by assessing the main factors that create change in a marketplace: political (including legislative), economic, social and, technological trends. If strategy is about matching your business to the opportunities and challenges of the environment, then it pays to understand what that means and how the environment is changing and likely to change in the future. A company's ability to match itself to its environment can be assessed in turn by listing its main strengths, weaknesses, opportunities and threats - the now familiar SWOT analysis. PEST and SWOT analyses have become the logical starting points for any business looking to appraise itself and to define or redefine its strategy. How a company matches itself to its environment is left to its management to decide. We believe that it is time to identify better ways in which any organization can identify how to match itself to the changing needs and views of the most important part of its environment, its customers. We also believe that management needs to look more inside their organizations to find the answers to the challenges presented by their environment. A third definition of strategy explains why commercial organizations should invest time and money in creating a strategy: 'A successful strategy is one that achieves an above average profitability in its sector.' We also believe that any approach to strategy must be capable of demonstrating that it can guide a business organization to above average profitability or at least to an increase in profitability. For not-for-profit organizations the performance measures will be very different. A business school might aim merely to break even but measure itself by the number of students it educates. A charity might measure its total giving or a ratio of donations to income. A church might measure itself by the size of its congregation. Performance measures that are relevant to commercial business can be applied to any type or style of organization.
While companies still use SWOT and PEST analyses, other strategic tools have become dated as business has changed in its nature. A century ago, the multinational was the exception on the corporate landscape. Most business was small and local and this is still true in many countries and in many sectors to this day. In markets where competition is fragmented and the main competitors are small, a relatively unsophisticated business plan, one that concerns itself solely with the business itself and its immediate market, is likely to be more than adequate. Gap analysis is still a relevant technique that can focus the management of such organizations into thinking about the main issues they face, specifically how to bridge the gap between their existing financial performances and where they would like the business to be in the future. If the gap is wide and if the recent performance has been poor, it is likely that the company will have to reinvent itself and to find a different answer to the question 'What business are we in?' Used in conjunction with a PEST and SWOT analysis, a firm can construct a clear sense of direction. By identifying and costing various projects that will help to fill the strategic planning gap, it can create a strategic plan. The value of gap analysis lies in its simplicity, but it has one key weakness. It ignores competition. It also lacks any model to help management decide what to do or how to appraise their ideas as to how to fill the planning gap. But first there is a question on the way strategies actually evolve. Is it via the purposive analysis implied by Gap, SWOT and PEST analyses?
There has been a lively debate as to whether 'strategy' is something that senior management can decide upon and impose upon an organization or whether strategies emerge from within an organization, guided by managers rather than decided by them. Many argue that specific strategies tend to emerge, rather than be created, in larger organizations because many new and different strategies are constantly being created and acted upon routinely through the interaction between the firm and its customers or even suppliers. An order might arrive from another country and before it knows it, the firm is in the export business. An existing customer, impressed by what the firm has done in the past in supplying one product or service, asks it to provide another outside its normal scope of operation. It does so successfully and finds itself in a new business. This idea of a business almost lurching from one opportunity to another may appeal, but the analogy of strategy as evolution where a series of often random events occur, a tiny minority of which change the business because they produce sustained sales or profit, is not too far from reality. Indeed some have argued that you can apply this thinking outside of the firm - one business species thrives as it adapts to a changing environment while another is wiped out when its main source of nourishment declines.
In reality, businesses do, indeed must, try to formalize their strategies, to take control of their own destiny. The problem is how? The best answer will probably be a combination of direction and evolution. From the top or centre will come an analysis and formal plan. This will include the financial objectives of the firm, as there is no sense in delegating those. The contribution from lower down the organization, the bottom up component can include the source of options to be analysed. The role of the planner is to select the best options so that the firm has a clear direction to follow. The worst possible situation is where the company is actively trying to pursue more than one competing strategy at the same time. It does not work. The problem with such thinking is that it leaves the role of strategy formulation somewhat in limbo. On the one hand we are saying that strategy is about having a clear understanding of how the organization is planning to meet its objectives. On the other, we are arguing the value of allowing radical ideas to emerge from the customer interface, somewhere not always regarded as the place where strategy is formed. So just where do we stand on the issue of who are responsible for strategic management? What is best left to the senior team in our view are decisions about which markets to be in, whether to enter country X this year or next, whether to acquire Company Y or to divest Division A - what we labelled earlier as corporate level strategy. Our focus is on market strategy; what organizations should do to manage their way in markets they are already in and intend to stay in. For the first type of decision we concede the need for a centralized function that makes decisions. For the second type of role we will argue that managers should create a framework and set objectives and then let the organization get on with meeting those objectives.
The strategy process is about flows of ideas and instructions up and down the organization. There will be two distinct flows in any business, the financial planning flow and the strategic planning flow. They interact and often conflict. A typical financial objective might be to achieve a 24 per cent return on assets employed each year. A typical vision statement is more qualitative and more long-term, to be market leader in a specific field. Underpinning the company vision will be a strategy that gives practical form to that vision. At the same time, it explains how the company expects to achieve its financial goals and objectives. All too often, it is far from clear in written plans how the strategy will deliver the required financial performance. Tactics are the shorter term, day-to-day matters that will be of relevance to many employees, for example a sales target of four customer calls a day, a production plan for 50 tonnes of product. Money is required to fund the business and to meet day-to-day expenditure. Typically a financial budget is prepared for every part of an organization. Individual budgets are totalled and compared with the revenue forecasts to judge the viability of the plan.
Those reading this who have prepared budgets and forecasts know only too well that preparing them is an art as well as a science. The art comes in not leaving yourself with too little fat, in slightly over forecasting a budget and under forecasting a revenue stream. Those reading this who manage those who prepare budgets and forecasts recognize that managers 'suffice' rather than maximize profit, and probably have a number of ways of ensuring that both forecasts and budgets appear challenging while still being feasible. There is a danger in our experience of believing one's own forecasts. Senior managers spend time and effort making sure that the next year's plan looks' sound because revenue and expenditure balance. But what appears on paper is no more than a wish list. If the organization is in a stable environment then a simple extrapolation from last year is adequate. In such a case, the financial flow will dominate management thinking. In situations where the environment is more fluid and less predictable, then rigidity creates myopia. Organizations in the service sector have to be prepared to change, often on a daily basis to respond to shifts in what their customers want or in what their competition are doing. Visionary companies often out-perform financially driven ones because there is not a reliance upon budgeting and forecasting, there is often not enough time to do such things, as the business is too concerned with how it can cope with the opportunities that are there in the market and that can never be predicted. Having a rigid top down approach can stifle the very essence of organization's ability to succeed. Senior management's role is to set targets, let middle and junior managers decide or at least influence how to meet them. As organizations become more complex and physically larger, it becomes more impossible for one person at the top to be able to manage down. Education standards have risen but companies can ignore the potential they recruit, trying to control what they should be letting free, lacking the framework that will guide employees to achieve without detailed manuals on what to do and how to do it.
An approach can be adopted that is not budget driven in the sense that the firm relies upon replicating what it did last year, but not so free and easy so that senior management lose all control over what is happening. The balance between the two flows in terms of the relative power they have in the organization is interesting to observe. Some companies have a good strategy. Profitability is almost taken for granted. The debate is more about how much profit to return to shareholders, how much to invest, and what the staff bonus scheme should payout this year. In other companies, financial management is all-powerful. It needs to be, as the business has not discovered a position in its market that it can use to achieve above average profitability, most probably because it lacks an effective strategy. It lurches from one financial crisis to another. Many businesses survive in this way for years, but the better employees leave for better paid and more satisfying jobs 'elsewhere. Even among some apparently better performing organizations employee turnover can be an issue. Here financial performance has been gained at the expense of employees. Employees leave, disliking the uncaring attitude to both staff and to customers that means they care little for their employer. Over the years, a number of models have been produced largely from academic research that companies can use to improve their chances of achieving above average profitability. The strategic decisionmaking in an organization is guided by a model, a simplified picture of what makes for success in business. So what are these models and how useful have they proven to be? By the 1980s, businesses realized that they needed more sophisticated tools to help them construct valid strategies. The main problems to be faced in their markets were not so much the trends identified by their trend analyses, but by the less predictable actions of their competitors. Take the retail sector as a good example. In the 1950s, there were few countries in the world where concentration levels in the retail sector were high. By the 1990s, most developed nations had food retail sectors that were dominated by a small number of players. At the same time such companies owned more than one retail business and strategies were needed for each market.
[1] Which of the following is a true statement?
(1) An idea found useful in one company at one time will always work in other companies
(2) An idea found useful in one company at one time may not work in other companies
(3) An idea found irrelevant in one company at one time will work in other companies
(4) A useful idea will always remain relevant for all companies at all times[2] According to the passage,
(1) Anecdotal memories created chaos
(2) Useful ideas emerged fairly rapidly to deal with business strategy
(3) Gradual emergence of ideas confused the business strategists
(4) Sudden emergence of ideas created confusion among the business strategists[3] According to the passage,
(1) Recent literature aims to codify documentary histories on business strategy
(2) Recent books aim to document memoirs of business leaders
(3) Many documentary histories were codified in early books on business strategy
(4) None of the above[4] According to the author of the passage,
(1) There is no difference between business and corporate level strategy
(2) We cannot differentiate business from corporate strategy
(3) Business should be based on questions raised at the corporate level
(4) Strategy is based on the questions raised at the business level[5] Which of the following is not a true statement?
(1) Early books on business strategy contained very little theory
(2) Early books on business strategy contained many models drawn from social sciences
(3) Early books on business strategy contained little or no theory derived from social sciences
(4) Early books on business strategy contain many good ideas[6] It is true that
(1) business strategy has not changed for many years
(2) not many new ideas have become widely known to influence our business strategy
(3) not many new ideas have become widely known as the needs of business have changed
(4) new ideas have changed our business strategies[7] According to the passage,
(1) there cannot be many definitions of business strategy
(2) there are only two definitions of business strategy
(3) there are many definitions of business strategy
(4) no definition of business strategy is an accurate description[8] We can understand the changing environment of a business by
(1) analysing the factors affecting the market
(2) assessing the political, economic, social and technological trends
(3) Both of the above
(4) None of the above[9] SWOT analysis is a process
(1) which tests a company's ability to cope with the environment
(2) which helps a company to appraise itself
(3) Both of the above
(4) None of the above[10] According to the passage,
(1) customer is a part of the environment
(2) customer defines the business environment
(3) business environment shapes the customer
(4) business strategy moulds the customer[11] Which of the following is not a true statement?
(1) Commercial organizations should invest time and money in creating strategy
(2) Commercial organizations should not invest time and money in creating strategy
(3) A successful strategy should lead to profitability
(4) Performance measures that are relevant to commercial organizations are also applicable to not-for-profit organisations[12] According to the passage, SWOT analysis
(1) has become a dated tool
(2) is not a tool used by companies any more
(3) is a tool still used by companies
(4) has become redundant[13] Which of the following is a true statement?
(1) A century ago most businesses were multinational
(2) A century ago most businesses were big
(3) A century ago most businesses were local
(4) Multinational businesses were common until the end of the last century[14] According to the passage, Gap analysis
(1) is no more relevant
(2) bridges the gap between the present and the future
(3) identifies the difference between the present performance and the future vision
(4) None of the above[15] According to the passage,
(1) Gap analysis is a fairly complex process
(2) Gap analysis has no weakness
(3) Gap analysis has many weaknesses
(4) None of the above[16] Which of the following is not a true statement?
(1) Specific strategies often evolve
(2) Specific strategies are always created
(3) Strategies are constantly created through interaction between customers and suppliers
(4) Strategies are dictated to the customers and suppliers[17] The businesses must formalise their strategies by
(1) Controlling and monitoring
(2) Direction and evolution
(3) Planning and analysis
(4) All of these[18] According to the passage,
(1) Strategy demands' a clear understanding of the future
(2) Strategy should encourage radical ideas to emerge from customers
(3) Organisation should be clear as to how it plans to achieve its goals
(4) All of the above[19] The author of the passage focuses on
(1) Corporate strategy
(2) Market strategy
(3) Both of the above
(4) None of the above[20] According to the passage, the financial planning flow
(1) and the strategic planning flow mean the same
(2) should be based on strategic planning flow
(3) and the strategic planning flow do not ever interact
(4) and the strategic planning flow conflict with each other[21] According to the passage,
(1) organisations which perform well do not experience employee turnover
(2) employee turnover could be an issue even in organisations which perform well
(3) organisations which perform well faces employee turnover more acutely than others
(4) financial performance should be considered more important than employee turnover[22] According to the passage,
(1) in a stable environment, organisation should be prepared to change
(2) in a fluid environment, planning is not required
(3) in a stable environment, financial flow will dominate management thinking
(4) in a fluid environment, rigid plans often work well[23] The passage suggests that
(1) senior management should not set targets
(2) senior managers should set targets
(3) junior management should not be asked to meet the targets
(4) middle managers cannot be asked to influence as to how to meet targets[24] Which of the following is a tactic?
(1) Specific production plan for a specific product
(2) A sales target for a specific day
(3) Both of the above
(4) None of the aboveasked in FMS
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110.
The systems perspective, applied to organizations in its classic formulations as an organic or a cybernetic model, is open to criticism for failing to give a sufficient account of change. In the organic model, change is seen primarily as an adaptive response by the system, acting as a whole or through subsystems with specific functions, to maintain itself in balance with a shifting environment. Change is thus externalised beyond the system boundary. The organism's response is characterized as a negative feedback process by means of which a control centre becomes aware of a disparity between actual and desired behaviour or conditions and triggers actions to reduce the disparity. The model assumes that the organism is so constituted as to be able to detect significant disparities and to be able to adjust its behaviour in response to them.
When the organic model is generalized to apply to organizations, the emphasis on boundary, environment, feedback and adaptive response are carried over, and management is readily identified as the control centre, which directs the organization's· operations. However, organizations do not possess the same unity or consistency of form as organisms. Their external boundaries, as well as internal boundaries between subsystems, are less evident and less fixed. Responses to internal and external problem situations are not generally preset or inbuilt, but have to be invented. Applied uncritically, the model attributes too central a role to management and overestimates management's power to control events and actions. Direction of operations comes not from an integrated control centre but from a multiplicity of factors whose behaviour is not merely adaptive but also creative and contentious.
The cybernetic model provides a more elaborate account of control and communication mechanisms organized hierarchically and recursively and distributed throughout the system. It also includes an environmental scanning function, which opens up the possibility of proactive change in the system. Nevertheless, although change becomes a subtler, complex and generalized phenomenon in this model, changes are still seen as adjustments, whether reactive or proactive, which serve to maintain or increase order in the system. Nor is it any easier to relate change to human agency in the cybernetic model than in the organic.
In the "soft systems" approach articulated by Checkland, attention shifts from the actual constitution of organizations as complex systems towards organizational actors' understandings and formulations of problem situations. This is a view, which allows and expects multiple interpretations of the world at hand. When soft systems methodology (SSM) is applied to a problem situation in an organization, it culminates in a debate which aims to define changes which are "systemically desirable and culturally feasible". The human role in defining (and subsequently carrying out) changes is thus recognized.
The soft systems approach makes change more central to organizational life' than it is in the harder approaches sketched above, which focus on the system's capacity to cope with and respond to environmental perturbations. Change now becomes something, which flows from human understanding and decision-making, which is not in general prefigured or automatic, and which involves negotiation by competing parties. However, some of the legacy of the earlier systems views persists in the soft systems approach and methodology, and serves to prevent fuller appreciation of the nature of change in organizational life. For instance, the central notion of transformation in the methodology relates still to the transformation of inputs into outputs by the system, rather than to transformation of the system itself. Analysis and modelling in SSM, by and large, is conducted by the analyst alone, so that some of the most important interpretations in the change exercise are supplied by external experts. When the conceptual model is brought forward by the analyst for organizational debate, the voice of management is likely to be dominant, again restricting opportunity for a more thoroughgoing review of possibilities. Thus, even though the soft systems approach brings change to the centre of the organizational stage by focusing on human activity systems and embracing the interpretative standpoint, change is still characterized as a discontinuous step from an old order to a new one, facilitated by the alchemy of the analyst, and sanctioned by management.
In the systems tradition as discussed so far, there is a common interest in how complex systems achieve, maintain and increase order, in a turbulent environment, which threatens to invade or dissolve them. In the organic model, change is essentially an external threat to be responded to. Richer notions of change are developed in the cybernetic and soft systems approaches, but still, change is seen as a way of preserving or improving order in the system, rather than as a fundamental feature of the system itself. In the translation of systems concepts to organizational models, the identification of control with management has produced an impression that organizational change must be managed, and that managers, in alliance with experts, can and should manage change.
It has always been clear that organizations are not organisms, but the limitations of applying the organic metaphor have only become obvious relatively recently, when the pace of organizational and technological change has thrown into question the contemporary validity of organizational models based on central control, stability and bureaucracy. It may be that continuous change is an essential feature of organizations or it may be that disorder is not only tolerable in organizations but also natural and productive. To contemplate these possibilities, it is necessary to go beyond the familiar systems models and at the same time to question ideas of change management.
Kiel, following an earlier formulation by Jantsch, describes three stages in the development of models of organizational change. The first stage, deterministic change, is a mechanical or linear view, which equates to a presystems or early systems view of organizations as machines subject to rational control. The second stage, equilibrium-based change, is essentially the systems perspective, especially as represented by the organic or cybernetic models. The third stage, dissipative or transformation change, views organizations as dynamic selforganizing systems capable of radical transformation as well as gradual evolution, and continually moving between order and disorder and between stability and instability. Organizational models in this third stage go beyond (or may be seen to extend) the systems tradition, drawing on theories of chaos, complexity and self-organization from the natural sciences. New holistic theories of change are emerging which challenge the centrality of order and control in complex systems.
According to these theories, many complex systems are non-linear, i.e. systems in which relationships between cause and effect are not constant. Therefore, small inputs can sometimes lead to' disproportionately large con sequences (and at other times not), and small variations in initial conditions can sometimes produce large variations in outcomes (and sometimes not). Generally, processes cannot be fully controlled or planned, and cannot be run back and repeated. Many natural systems, including ecologies and the weather, are non-linear. They are characterized by complex multiple patterns of interaction which combine with random disturbances to produce unpredictable events that will sometimes transform the system into an entirely new configuration. In general, as they move from one relatively stable region of behaviour to another, such systems pass through a chaotic transition phase. A system far from equilibrium and at the edge of chaos is one on the point of transformative change, but the future state of the system is not predictable.
It seems attractive to adopt a transformational model of organizational change derived from these more general ideas of dynamic non-linear systems. The complexity, uncertainty and centrality of change processes seem much better captured in this kind of model than in earlier systems models. However, it should be remembered that just as organizations are not organisms, neither are they weather systems or whirlpools. Organizations are constituted by people, not particles. Change is produced not by the complex interaction of effectively structureless atoms, but by the meaningful and value-laden interaction of already complex individual human beings.
Though it may indeed be fruitful to see organizations as non-linear systems, to do so will require a fundamental shift in our understanding of the role and limits of control and likewise of the role and limits of management. It would, for instance, be fallacious to assume that management can apply the transformational model in order to produce a desirable transformation in their organization, since this would be to treat non-linear systems as though they were linear (and so predictable and controllable). Another danger is that by simply adopting the language of non-linear systems we will produce a spurious jargon and mystification which will lead neither to increased understanding nor to practical action in organizational life. The theories of chaos and complexity are seductive, and can easily lead you into a world of butterfly effects, strange attractors and NK fitness landscapes. Nevertheless, a cautious and sober application of them might prove fruitful in our area of interest.
[1] Choose the correct statement from the following:
(1) Cybernetic model focuses on actors' understanding and formulations of problem situations
(2) Organic model focuses on actors' understanding and formulations of problem situations
(3) Soft systems approach focuses on actors' understanding and formulations. of problem situations
(4) Soft systems approach focuses on organisations as complex systems[2] Which of the following assumptions may be made from the passage?
(1) Processes can be fully planned
(2) Many natural systems are characterised by complex patterns of interaction
(3) People are particles of organisations
(4) Change is produced by complex interactions of atoms[3] According to the passage, which of the following is not a correct statement?
(1) In the organic model, change is viewed as an external threat
(2) In the cybernetic model, change is viewed as a way of improving order in the system
(3) In the cybernetic model and in the soft systems approach, change is seen as a fundamental feature of the system
(4) In the soft systems approach, change is viewed as a way of improving order in the system[4] The systems model has been criticised because it
(1) failed to provide a satisfactory account of change
(2) revealed the classic dimension of the organic model
(3) did not respond to negative feedback
(4) refused to look beyond the system[5] Which of the following is a correct statement?
(1) Deterministic change is the systems perspective
(2) Equilibrium-based change is the systems approach
(3) Equilibrium-based change is a mechanical view
(4) Transformational change is a mechanical view[6] Which of the following is not a correct statement?
(1) Change is primarily a response to the environment
(2) The system as a whole or the sub-systems adapt to the environment
(3) The environment is not stable
(4) Change cannot be externalised beyond the system boundary[7] According to the passage, change
(1) does not flow from human understanding or decision-making
(2) is generally prefigured
(3) is automatic
(4) involves negotiation by competing parties[8] The organic model assumes that
(1) the organism's response is negative
(2) a control centre influences behaviour
(3) the organism is able to adjust its behaviour
(4) the organism is not able to detect significant disparities[9] Change is seen flowing from human understanding in the
(1) cybernetic model
(2) organic model
(3) soft systems approach
(4) harder approaches[10] Which of the following is not a correct statement?
(1) Management is seen as the control centre of organisations
(2) Organic model uses concepts of boundary and adaptive response
(3) The organic model views management as a part of environment
(4) Organisations are not totally comparable to organisms[11] Which of the following is not a correct statement?
(1) Cybernetic model recognises human role in defining change
(2) Organic model does not recognise human role in defining change
(3) Soft systems approach recognises human role in defining change
(4) Soft systems approach defines changes, which are systemically feasible[12] According to the passage,
(1) cybernetic model is more realistic
(2) organic model is more realistic
(3) organic model is as realistic as the cybernetic model
(4) cybernetic model is as realistic as the organic model[13] Which of the following is a correct statement?
(1) Cybernetic model takes better care of environmental factors
(2) Organic model takes better care of environmental factors
(3) Cybernetic model is not suitable for proactive change
(4) Organic model is suitable for proactive changeasked in FMS
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111.
FDI can promote diffusion of international technology if the technological advantages of multinational firms do not remain restricted to one firm or its affiliates. Technological spillover may take place in the recipient country through demonstration effects (imitation), labour turnover, or increased competition. The channels for spillover can be horizontal (originating in the entry of the multinational-investor in the same sector) or vertical (originating in backward links when local suppliers supply multinational investors or in forward links when local customers buy from multinational investors).
Because a multinational has more incentive to promote local suppliers, backward links may be more widely observed than horizontal links, which inherently are associated with increased competition Research by Javorcik (2004) finds a positive effect of FDI on Lithuanian local suppliers work though backward links. Another finding is that greater productivity gains are associated with projects partially owned by foreign entities (joint ventures), suggesting that domestic capital participation increases productivity spillover. That could serve as an interesting model for Russia might be able to attract FDI top complement domestic firms' market share to direct foreign competition.
The evidence from Russia indicates that FDI inflows are lagging behind those of some BRICS comparators (see box 3-1), suggesting that the benefits from international technology diffusion have flowed to only a few economic sectors, with FDI heavily concentrated in oil and natural resources. At the same time, the large increases in FDI observed since 2002 suggest a growing balance within manufacturing and between the manufacturing and service sectors, indication that the growing domestic demand for consumer goods is driving a consistent share of total FDI flows in Russia.
Russian multinationals continue to dominate the outward FDI of the south eastern Europe and CIS region for FDI in joint ventures and mergers, accounting for 87 percent of the total in 2005.Iinvestment includes large deals to acquire and create joint ventures with enterprises in developed economics - notably Lukoil's purchase of Nelson Resources, a Canadian based oil company, and the recently announced merger of the aluminium and alumina assets of RUSAL, the SUAL Group, and Glencore International. Such partnerships are likely to gain in importance, given evidence that foreign-invested enterprises (FIEs) have been important for increasing labour productivity and export competitiveness in such countries as China.
One of the most powerful channels for technology' diffusion is the information and communications technology (ICT) channel. Usually, a good indicator of a country's capacity to leverage the ICT channel is the amount of FDI in communications, which in Russia remains extremely low (0.4 percent of total annual FDI in 2004-05). Moreover, according to various private sources, such as WITSA (2006), the amount of ICT investment in Russia, as a percent of GDP, is substantially lower than that in Central and Eastern Europe (CEE) countries.
Note that neither trade in capital goods nor FDI inflows are sufficient for the successful diffusion of technology. A country must be ready to absorb foreign knowledge and manufacturing and sales methods. In Russia vertical knowledge spillover could be hampered by the central planning legacy of large industrial plants, -which were more vertically integrated than 'Western plants. Moreover, local R& D, domestic research laboratories, and workers with the right skills are key aspects of the process. Trade competition and R&D expenditures are closely interrelated: unless a country is also well endowed in R&D and invests in R&D , spillover is not likely.Box 3-1. Gain from Reducing Barriers to Trade and to FDI Flows in Russia
Russia stands only to gain by reducing its barriers to trade and FDI inflows and thus reaping the benefits of global integration, increased competitiveness, and improved access to business services.Tariff barriers: The CIS has high average tariff and nontariff barriers, which would need to be reduced in the medium term in order to gain from international integration. For Russia in particular, Rutherford and Tarr (2006) shows that the average tariff increased between 2001 and 2003 from 11.5 percent to between 13 and 14.5 percent, placing its tariff rates (unweighted, or weighed averages) at a higher level than those of other middle-income countries, which average 10.6 percent. A reduction in the import tariff by 50 percent will produce gains to the economy on two counts: one, improved domestic resource allocation due to a shift in production to sectors where the value of production is higher, based on world market prices, and two, an increase in Russian productivity as a result of Russian businesses being able to import modern technologies. The second impact is more important for Russia.
Trade Restrictiveness Index: Kee, Nicita, and Olarreage (2006) computes indicators of trade restrictiveness that include measures of tariff and nontariff barriers for ninety-one developing and industrial countries. Of the indicators for the manufacturing sector, one focuses on the trade distortions imposed by each country on imports and another focuses on market access for exports in the rest of the world. It is interesting to note that the trade restrictiveness index (TRI) for imports .for Russia (.19) is lower than that for Brazil (.22) and India (.20) but higher than that for South Africa (.06). China (.12) and the European Union (.08).Russia's TRI is the highest in the Europe and Central Asia region, a reflection of the high tariff and nontariff barriers that it imposes on its imports. On the other hand, Russia faces less trade distortion on its· exports from the rest of the world, China being the only country facing a lower level of restrictiveness.
Barriers to FDI: Russia fares worse than other countries in the region, attracting one of the lowest levels of FDI inflows. Among the key restrictions on foreign service providers in Russia are the monopoly of Rostelecom on fixedline telephone services, the prohibition of affiliate branches of foreign banks, and the restricted quota on the share multinationals in the insurance sector. The reduction barriers to FDI in services alone would result in a gain of the order of 3.7 percent of GDP, accounting for about three-quarters of the total gains to Russia from WTO accession. The reduction in barriers to FDI in the service sector would allow multinationals to obtain greater post tax benefits on their investments, encouraging them to increase FDI to supply the Russia market. That in turn would lead to an increase in total service providers in Russia, giving Russian users improved access to telecommunication, banking, insurance, and other business services; lowering the cost of doing business and increasing the productivity of Russian forms using those services; and providing a growth impetus to the economy.
[1] Which of the following is a correct statement?
(1) Local suppliers promote multinationals
(2) Horizontal links are associated with increased competition
(3) Backward links are associated with increased competition
(4) Multinationals promote backward links[2] According to the passage,
(1) FDI inflows into Russia are the highest amongst BRICS
(2) FDI inflows into Russia are the lowest amongst BRICS
(3) Some BRIC countries are ahead of Russia in terms of FDI inflows
(4) All BRIC countries are ahead of Russia in terms of FDI inflows[3] Since the year 2002,
(1) FDI was made largely into oil and natural resources
(2) All sectors in Russia have received nearly equal amount of FDI inflow
(3) Manufacturing sector has received far more FDI inflow than service sector
(4) Service sector has received far more FDI inflow than the manufacturing sector[4] Russian multinationals
(1) receive most of FDI from South-eastern Europe
(2) invest most of FDI into South-eastern Europe
(3) invest largely in CIS countries
(4) do not receive much FDI from CIS countries[5] According to the passage,
(1) Russian MNCs have created large partnerships
(2) Russian MNCs have refrained from entering into JVs and Mergers
(3) Large European and US MNCs have deliberately kept Russian MNCs out of all major deals
(4) None of the above[6] The most suitable title for the above passage is
(1) Russian MNCs
(2) Multinational investments
(3) Foreign Direct Investment
(4) Diffusion of International Technology[7] The passage suggests that
(1) Russia has benefited from information and communication technologies (lCT) as a powerful channel
(2) Compared to Russia, Central and Eastern European countries have received far less amount of ICT investment
(3) Central and Eastern European countries have received far more of ICT investment
(4) Russia was found ready to absorb vertical knowledge spilloverasked in FMS
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112.
Now I want to return to the phenomena about which, partly by chance and partly through Mayo, I had become curious and with which, partly by reinforcement and partly by choice I decided to stick. I call this episode my discovery of life space. When I was in philosophy, I was more interested in the "true" than in the "real," the "good," or the "beautiful." To use traditional subdivisions of philosophy, I was more interested in epistemology (what makes knowledge knowledge) than in metaphysics (what makes the real real), or ethics (what makes the good good), or aesthetics (what makes the beautiful beautiful). These sixty-four dollar questions I decided to consider no longer -- at least not until I retired. Mayo told me that philosophy was a good subject to engage in at the beginning and end of one's life. In the middle years, he said, one should live it.
One epistemological distinction still meant a great deal to me. This was the one David Hume made between two kinds of knowledge: one that referred to "relations of ideas" and the other to "matters of fact". Analytical propositions, as they were called in philosophy, such as "The sage is wise," belonged to the first kind. In such propositions, the predicate (wise) was contained in the subject (sage), so that nothing new had been added; they were true apart from experience and thus constituted a priori knowledge. Synthetic propositions, on the other hand, such as "The rose is red" belonged to the second kind of knowledge. In such propositions the predicate (red) was not contained in the subject (rose). Their truth was contingent upon experience and could not be known apart from experience; they constituted a posteriori knowledge.
Although it was this distinction that had led to Hume's scepticism about knowledge and Kant's resolution of it, I felt it was important to maintain this distinction without having to accept wholly either Hume's or Kant's epistemological conclusions. The distinction, it seemed to me, neither cast a giant shadow on the status of a posteriori synthetic propositions, as Hume thought, nor did it require the possibility of a priori propositions in order to get out of this dilemma, as Kant thought. Hence, in the best fashion of the day, that is, in terms of the newly emerging analytic philosophy of Whitehead and Russell, I put the propositions of both logic and mathematics in the class of a priori analytic knowledge and the proposition of common sense and science in the class of a posteriori synthetic knowledge. The criterion for the truth of propositions in, the first class was logical consistency; the criterion for the truth of propositions in the second class was some correspondence with the phenomena, a matter, which could not be settled apart from verification by observation.
However, I did not keep these two kinds of propositions-analytical and synthetic-totally unrelated. It seemed to me that the development of scientific knowledge required both kinds of propositions so long as they were differentiated from and related to each other. At the time, I was not too clear what this relationship was. It seemed to me that the question was going to be settled by experience, not philosophical dogma. In this case, experience seemed to me to mean having something to do with convenience and utility as well as observation. Thus, I had three different notions of the truth in the back of my mind: (1) the notion of consistency, (2) the notion of correspondence to the phenomena, and (3) the notion of convenience and utility. In matters about truth I was a bit of a logician, a bit of a positivist, and a bit of a pragmatist, and so I have remained for the rest of my life. For to me now the question no longer was which one of these truths was absolute; it was how these different notions about truth worked together to produce knowledge. As the search for an answer to this question lurked behind the scenes throughout my career, I want to describe how it began in my counselling activities with students. When I started interviewing students, I conceived of my mission partly as a research project and partly as a counselling service to them. Helping them was important to me but not my sole objective. I was also interested in the preoccupations of the students and the uniformities I felt I saw in them. These became the phenomena about which I became curious and which I wanted to understand.
The readings that I have previously mentioned helped me. Both Pierre Janet and Sigmund Freud had influenced Mayo. In talking about obsession or compulsion neurosis (Mayo, following Janet, used the word obsession) Mayo contrasted and related the two men's approaches to psychopathology. He felt that Janet described the phenomena better, whereas Freud showed their historical determination. That is to say, Freud was more concerned with how the obsessive's thinking got that way, whereas Janet was concerned with its present form. The researches of Janet on mental illness are of course much less well known than those of Freud. Janet's most important books (1909, 1919, and 1921) have not been translated into English, although Psychological Healing (1925) has been. Mayo wrote a book in 1948 about Janet's work.
As a result, I was somewhat of a maverick in interviewing students; that is, I used the most general ideas underlying the conceptual schemes of both Janet and Freud. I concentrated first on the nature of a student's preoccupations here and now; only if I thought it necessary did I explore his personal history to see what may have influenced him in his present direction. This seemed to me the natural course that most interviews took anyway. Many times I would state the form of the student's preoccupations in Janet's terms; I hardly ever stated the dynamics in Freudian terms. Here I felt I was following the principle of doing the least harm-a principle upon which, as Mayo and Henderson told me again and again, the practice of medicine was based.
I also found Janet's concepts more congenial than Freud's, because during this period I was anti-metaphysical. Freud's way of thinking seemed to me to have too many metaphysical entities circling around in it. I felt that I could study a person's preoccupations and concerns without having to posit an unconscious. Moreover, much of the "wild" psychoanalytical talk that certain circles indulged in at that time I found distasteful. I was going to stay as close to the phenomena as I could and become well acquainted with them before seeking too quickly for any explanation of them. In constantly comparing Janet and Freud, Mayo performed an inestimable service for me. Although annoying at times - because of course I was still bothered about who was right - the comparison prevented me from going off half-cocked. I had to try to make sense out of both positions. It could be said that I experimented with Freud's ideas more upon myself than upon my students. I underwent psychoanalysis for a period of six months after which my analyst died; he had been analysed by both Freud and Jung (and at this period in Boston they were tops). I did not continue with anyone else.
[1] Which of the following is not a true statement?
(1) The author of the passage was analysed neither by Freud nor by Jung
(2) The author of the passage did not compare Mayo and Freud
(3) Janet and Freud were compared by Mayo
(4) The author constantly compared Janet and Freud[2] According to the passage, which of the following sub-division of philosophy deals with knowledge?
(1) Ontology
(2) Aesthetics
(3) Epistemology
(4) None of these[3] According to the passage,
(1) Mayo was influenced by Russell and Whitehead
(2) The author was not influenced by Janet and Freud
(3) The author was influenced by Janet and Freud
(4) Mayo was influenced neither by Janet nor by Freud[4] Which of the following is not a true statement?
(1) "Analytical propositions" refer to the 'relations of ideas'
(2) "Analytical propositions" constitute 'a priori knowledge'
(3) "Synthetic propositions" refer to the 'relations of facts'
(4) "Synthetic propositions" constitute 'a priori knowledge'[5] According to the author,
(1) The same person can be a positivist, a logician and a pragmatist at the same time.
(2) The same person can never be a positivist, a logician and a pragmatist at the same time.
(3) Few people can be a positivist, a logician and a pragmatist at the same time.
(4) Some people do not want to be a positivist, a logician and a pragmatist at the same time.[6] The author of the passage is
(1) a follower of Kant
(2) a follower of Hume
(3) a critique of Hume and Kant
(4) neither a critique nor a follower of Kant or Humeasked in FMS
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113.
What do we mean by fear? Fear of what? There are various types of fear and we need not analyse every type. But we can see that fear comes into being when our comprehension of relationship is not complete. Relationship is not only between people but between ourselves and nature, between ourselves and property, between ourselves and ideas; as long as that relationship is not fully understood, there must be fear. Life is relationship. To be is to be related and without relationship there is no life. Nothing can exist in isolation, so long as the mind is seeking isolation, there must be fear. Fear is not an abstraction; it exists only in relation to something.
The question is, how to be rid of fear? First of all, anything that is overcome has to be conquered again and again. No problem can be finally overcome, conquered; it can be understood but not conquered. They are two completely different processes and the conquering process leads to further confusion, further fear. To resist, to dominate, to do battle with a problem or to build a defense against it is only to create further conflict, whereas if we can understand fear, go into it fully step by step, explore the whole content of it, then fear will never return in any form.
As I said, fear is not an abstraction; it exists only in relationship. What do we mean by fear? Ultimately we are afraid, are we not?, of not being, of not becoming. Now, when there is fear of not being, of not advancing, or fear of the unknown, of death, can that fear be overcome by determination, by a conclusion, by any choice? Obviously not. Mere suppression, sublimation, or substitution, creates further resistance, does it not? Therefore fear can never be overcome through any form of discipline, through any form of resistance. That fact must be clearly seen, felt and experienced: fear cannot be overcome through any form of defense or resistance nor can there be freedom from fear through the search for an answer or through mere intellectual or verbal explanation.
Now what are we afraid of? Are we afraid of a fact or of an idea about the fact? Are we afraid of the thing as it is, or are we afraid of what we think it is? Take death, for example. Are we afraid of the fact of death or of the idea of death? The fact is one thing and the idea about the fact is another. Am I afraid of the word 'death' or of the fact itself? Because I am afraid of the word, of the idea, I never understand the fact, I never look at the fact, I am never in direct relation with the fact. It is only when I am in complete communion with the fact that there is no fear. If I am not in communion with the fact, then there is fear, and there is no communion with the fact so long as I
have an idea, an opinion, a theory, about the fact, so I have to be very clear whether I am afraid of the word, the idea or of the fact. If I am face to face with the fact, there is nothing to understand about it: the fact is there, and I can deal with it. If I am afraid of the word, then I must understand the word, go into the whole process of what the word, the term, implies.
For example, one is afraid of loneliness, afraid of the ache, the pain of loneliness. Surely that fear exists because one has never really looked at loneliness, one has never been in complete communion with it. The moment one is completely open to the fact of loneliness one can understand what it is, but one has an idea, an opinion about it, based on previous knowledge; it is this idea, opinion, this previous knowledge about the fact, that creates fear. Fear is obviously the outcome of naming, of terming, of projecting a symbol to represent the fact; that is fear is not independent of the word, of the term.
I have a reaction, say, to loneliness; that is I say I am afraid of being nothing. Am I afraid of the fact itself or is that fear awakened because I have previous knowledge of the fact, knowledge being the word, the symbol, the image? How can there be fear of a fact? When I, am face to face with a fact, in direct communion with it, I can look at it? observe it; therefore there is no fear of the fact. What causes fear is my apprehension about the fact, what the fact might be or do.
It is my opinion, my idea, my experience, my knowledge about the fact, that creates fear. So long as there is verbalization of the fact, giving the fact a name and therefore identifying or condemning it, so long as thought is judging the fact as an observer, there must be fear. Thought is the product of the past, it can only exist through verbalization, through symbols, through images; so long as thought is regarding or translating the fact, there must be fear.
Thus it is the mind that creates fear, the mind being the process of thinking. Thinking is verbalization. You cannot think without words, without symbols, images; these images, which are the prejudices, the previous knowledge, the apprehensions of the mind, are projected upon the fact, and out of that there arises fear. There is freedom from fear only when the mind is capable of looking at the fact without translating it without giving it a name, a label. This is quite difficult, because the feelings, the reactions, the anxieties that we have, are promptly identified by the mind and given a word. The feeling of jealousy is identified by that word. Is it possible not to identify a feeling, to look at that feeling without naming it? It is the naming of the feeling that gives it continuity that gives it strength. The moment you give a name to that which you call fear, you strengthen it; but if you can look at that feeling without terming it, you will see that it withers away. Therefore if one would be completely free of fear it is essential to understand this whole process of terming, of projecting symbols, images, giving names to facts.
[1] Which statement best expresses the meaning of fear as explained in the passage?
(1) Fear is experienced because we do not form and understand relationships
(2) Fear occurs in the mind and needs to be confronted
(3) Fear is caused when we engage more closely with ideas about a fact, than with trying to understand the fact
(4) Fear is an act of suppression of an understanding of facts[2] Human beings are victims of ............................... because of which they experience fear.
(Choose an option to fill the blank)
(1) Conditioning
(2) Deconditioning
(3) Suppression
(4) Isolation[3] We can eradicate fear if we do any one of the following:
(1) Verbalize and think about the fact that causes fear
(2) Look at the fact that causes fear and experience it fully
(3) Withhold judgments about a fact or situation while experiencing it
(4) Do all of above[4] Which set of key words, when put to practice will help us overcome fear?
(1) Minimise: suppression, sublimation, substitution
(2) Avoid: naming, terming, projecting facts
(3) Build: relationships, understanding, judgment of facts
(4) Engage in: communion, experiencing facts, withholding judgment
[5] Which of the following can be concluded from the passage?
(1) As long as there is any relationship, there must be fear of losing it
(2) As long as our thoughts can identify and judge a fact as an observer, there would be no fear
(3) Previous knowledge about a fact hinders dealing with the fact when it arrives
(4) Fear can be best diminished by fighting it and building a defense against it[6] Which of the following can be concluded from the passage?
(1) If one is in complete communion with a fact, there is little chance of fear
(2) Ideas of a fact aid us in making a communication with the fact.
(3) Fear is a feeling that is independent of the tag or the symbol representing the fact
(4) None of the above[7] Which of the following can be concluded from the passage?
(1) Fear can be overcome by conquering it once and for all
(2) Fear of unknown can be overcome by determined resistance
(3) Freedom of fear can be achieved by a simple intellectual explanation of the phenomenon
(4) None of the aboveasked in FMS
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114.
The importance of finance and of a productive economic base which created revenues for the state was already clear to Renaissance princes. The rise of the ancient regime monarchies of the eighteenth century, with their large military establishments and fleets of warships, simply increased the government's need to nurture the economy and to create financial institutions which could raise and manage the monies concerned. Moreover, like the First World War, conflicts such as the seven major Anglo-French wars fought between 1689 and 1815 were struggles of endurance. Victory therefore went to the Power-or better, since both Britain and France usually had allies, to the Great Power coalition with the greater capacity to maintain credit and to keep on raising supplies. The mere fact that these were coalition wars increased their duration, since a belligerent whose resources were fading would look to a more powerful ally for loans and reinforcements in order to keep itself in the fight. Given such expensive and exhausting conflicts, what each side desperately required was-to use the old aphorism-"money, money, and yet more money." It was this need which formed the background to what has-been termed the "financial revolution” of the late seventeenth and early eighteenth centuries when certain western European states evolved a relatively sophisticated system of banking and credit in, order to pay for their wars.
There was, it is true, a second and nonmilitary reason for the financial changes of this time. That was the chronic shortage of specie, particularly in the years before the gold discoveries in Portuguese Brazil in 1693. The more European commerce with the Orient developed in the seventeenth and eighteenth centuries, the greater the outflow of silver to cover the trade imbalances, causing merchants and dealers everywhere complain of the scarcity of coin. In addition, the steady increases in European commerce, especially in essential products such as cloth and naval stores, together with the tendency for the seasonal fairs of medieval Europe to be replaced by permanent centers of exchange, led to a growing regularity and predictability of financial settlements and thus to the greater use of bills of exchange and notes of credit. In Amsterdam especially, but also in London. Lyons, Frankfurt, and other cities, there arose a whole cluster of moneylenders, commodity dealers, goldsmiths (who often dealt in loans), bill merchants, and jobbers in the share of the growing number of joint-stock companies. Adopting banking practices which were already in evidence in Renaissance Italy, these individuals and financial houses steadily created. a structure of national and international credit to under-pin the early modern world economy.
Nevertheless, by far the largest and most sustained boost to the "financial revolution" in Europe was given by war. If the difference between the financial burdens of the age of the Philip II and that of Napoleon was one of degree, it still was remarkable enough. The cost of a sixteenthcentury war could be measured in millions of pounds; by the late seventeenth century, it had risen to tens of millions of pounds; and at the close of the Napoleonic War the outgoings of the major combatants occasionally reached a hundreds of millions of pounds a year. Whether these prolonged and frequent clashes between the Great Powers, when translated into economic terms, were more of a benefit to than a brake upon the commercial and industrial rise of the west can be never be satisfactorily resolved. The answer depends, to a great extent, upon whether one is trying to assess the absolute growth of a country as opposed to its relative prosperity-and strength before: and after a lengthy conflict. What is clear is that even the most thriving and "modern" of the eighteenth-century states - could not immediately pay for the wars of this period out of their ordinary revenue. Moreover, vast rises in taxes, even if the machinery existed to collect them, could well provoke domestic unrest, which all regimes feared especially when facing foreign challengers at the same time.
Consequently, the only way a government could finance a war adequately was by borrowing: by selling bonds and offices, or better, negotiable long-term stock paying interest to all who advanced monies to the state: Assured of an inflow of funds, officials could then authorize payments to army contractors, provision merchants, shipbuilders, and the armed services themselves. In many respects, this two-way system of raising and simultaneously spending vast sums of money acted like a bellows, fanning the development of western capitalism and of the nation-state itself.
Yet however natural all this may appear to later eyes, it is important to stress that the success of such a system depended an two critical factors reasonably efficient machinery far raising loans, and the maintenance of a government's “credit" in the financial market. In both provinces led the way not surprisingly, since the merchants there were part of the government and desired to see the affairs of state managed according to the same principles of financial rectitude as applied in, say, a joint-stock company. It was therefore appropriate that the States General of the Netherlands, which efficiently and regularly raised the taxes to cover governmental expenditures, was able to set interest rates very law, thus keeping dawn debt repayments. This system, superbly reinforced by the many financial activities of the city of Amsterdam, soon gave the United Provinces an international reputation far clearing bills, exchanging currency, and providing credit, which naturally created a structure and an atmosphere within which long-"term funded state debt could be regarded as perfectly normal. So successfully did Amsterdam became a center of Dutch "surplus capital" that it soon was able to invest in stock of foreign companies and, most important of all, to subscribe to a whole variety of loans floated by foreign governments, especially in wartime.
[1] During the three decades from sixteenth century to eighteenth century war expenditure increased:
(1) Hundredfold
(2) Tenfold
(3) Twofold
(4) Exponentially[2] Which geographical regions are referred to by “United Provinces” in the passage:
(1) Spain, Netherland and Italy
(2) Prussia, England and France
(3) Seven provinces which united in 1579 and formed the basis of Republic of Netherland
(4) The treaty of Baltimore united England with Spain and Netherland in 1579[3] Which statement is true with regard to the background to the Financial Revolution in Europe:
(1) To mitigate public unrest caused by excessive expenditure on war, the governments in various European countries invented the financial system
(2) The need for more and more money to wage enduring, expensive and exhausting wars in Europe gave rise to the financial revolution
(3) Borrowing money from the public became an attractive measure for appeasing people and getting money for wars in the governments coffers
(4) All the statements are correct[4] Which set of countries formed the “Great Powers” in Europe during the period from sixteenth century till late eighteenth century:
(1) Spain, Netherland, Germany
(2) France, Britain, Spain, Germany
(3) France, Britain, Russia, Austria and Prussia
(4) Britain, France, Prussia and Russia[5] What is the key reason for the growth of Western Capitalism during the reference period in the passage:
(1) Expensive wars gave rise to entrepreneurship in Europe that paved way for the industrial revolution
(2) Paying large interest on money borrowed from the public fuelled the capitalist revolution in Europe
(3) The reasonably efficient machinery for raising loans and maintenance of government‟s “credit” in the financial market fuelled growth
(4) The two-way systems of raising and simultaneously spending vast sums of money fanned the development of Western Capitalism[6] Why was Amsterdam successful in investing in foreign companies during the period when all of Europe was weighed down by excessive expenditure in war?
(1) The United Provinces was efficient in dealing with public and government transactions and this created an atmosphere where long term investments were considered normal
(2) Amsterdam per se was never involved in any of the wars the European nations were engaged in, and therefore had surplus capital to invest
(3) The merchants in Amsterdam were also government officials and they ensured that all transactions between people and government were mutually beneficial, as is the case in a joint-venture.
(4) All statements are correct[7] What is the opinion of experts regarding Europe‟s economic health during the period of reference in the passage:
(1) Experts are still not sure whether the economic health was good or bad in Europe during the period
(2) In absolute terms there was definitely a lot of economic loss, but in relative terms there was a gain
(3) Keeping a long term perspective, the period of reference let to good economic health in Europe, even though the state did spend a lot on wars
(4) None of the statements is trueasked in FMS
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