GATE AG 2019 • Q6 MCQ • 2 Marks

Section 8: General Aptitude

Analytical & Spatial Aptitude

Subtopic: Logic Deduction & Pattern Recognition

Question Statement:

Since the last one year, after a 125 basis point reduction in repo rate by the RBI, banking institutions have been making a demand to reduce interest rates on small saving schemes. Finally, the government announced yesterday a reduction in interest rates on small saving schemes to bring them on par with fixed deposit interest rates. Which statement can be inferred from the passage?

Options:

  • (A) Whenever RBI reduces the repo rate, interest rates on small saving schemes are also reduced
  • (B) Interest rates on small saving schemes are always maintained on par with fixed deposit interest rates
  • (C) The government sometimes takes into consideration the demands of banking institutions before reducing interest rates on small saving schemes
  • (D) A reduction in interest rates on small saving schemes follows only after a reduction in repo rate by RBI

Official Answer Key:

C

Step-by-Step Solution & Explanation

The passage describes one specific instance: banks demanded a rate cut, and the government eventually reduced the rate. This supports only a modest, hedged inference — that government *sometimes* responds to such demands — matching (C). (A) and (D) claim a universal ('whenever'/'only after') causal rule from a single instance, which is unsupported. (B) claims a permanent state ('always'), but the passage describes a one-time alignment. Answer: (C).

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