SBI PO English Paper Set for practice

(A -O) Goldman Sachs predicted that crude oil price would hit $ 200 and just as it appeared that alternative renewable energy had a chance of becoming an economically viable option, the international price of oil 70%. After hitting the all-time high of $ 147 a barrel, a month ago, crude fell to less than $ 40 a barrel. What explains this sharp decline in the international price of oil ? There has not been any major new discovery of a hitherto unknown source of oil or gas. The short answer is that the demand does not have to fall by a very sizeable quantity for the price of crude to respond as it did. In the short run, the price elasticity of demand for crude oil is very low. Conversely, in the short run, even a relatively big change in the price of oil does not immediately lower consumption. It takes months, or years, of high oil price to inculcate habits of energy conservation. World crude oil price had remained at over $ 60 a barrel for most of 2005-2007 without making any major dent in demand.

The long answer is more complex. The economic slowdown in the US, Europe and Asia along with dollar depreciation and commodity speculation have all had some role in the downward descent in the international price of oil. In recent years, the supply of oil has been rising in an almost vertical escalation in its price. The number of crude oil futures and options contracts have also increased manifold which has led to significant speculation in the oil market. In comparison, the role of the Organization of Petroleum Exporting Countries (OPEC) in fixing crude price has considerably weakened. OPEC is often accused of operating as a cartel restricting output thus keeping prices artificially high. It did succeed in setting the price of crude during the 1970s and the first half of the '80s. But, with increased futures trading and contracts, the control of crude pricing has moved from OPEC to banks and markets that deal with futures trading and contracts. It is true that most oil exporting regions of the world have remained politically unstable fuelling speculation over the price of crude. But there is little evidence that the geopolitical uncertainties in west Asia have improved to weaken the price of oil. Threatened by the downward slide of oil price. OPEC has. in fact, announced its decision to curtail output.

However most oil importers will have a sigh of relief as they find their oil import bills decline except for those who bought options to import oil at prices higher than market prices.Exporting nations, on the other hand, will see their economic prosperity slip. Relatively low price of crude is also bad news for investments in alternative renewable energy that cannot compete with cheaper and non-renewable sources of energy.

A. What does the phrases "the price elasticity of demand for crude oil is very low" imply ?

B. Which of the following factors is responsible for rise in speculation in crude oil markets ?

(a) OPEC has not been able to restrict the oil output and control prices.
(b) The supply of oil has been rising to match demand.
(c) Existence of large number of oil futures and oil contracts.

Why are oil importing countries relieved ?

What does the author want to covey by citing the statistics of  2005- 2007  ?

What does the author want to covey by citing the statistics of  2005- 2007  ?

 Which of the following factors in not responsible for the current drop in oil prices ?

Which of the following is/are TRUE in the context of the passage ?

(a). The decline in oil prices has benefitted all countries.
(b). Renewable energy sources are coustlier than non renewable ones.
(c). Lack of availability of alternative renewable energy resulted in rise in demand for crude.

What led to alternative energy sources being considered economically feasible ?

Choose the word which is most similar in meaning to the word printed in bold as used in the passage.

 FUELLING

Choose the word which is most similar in meaning to the word printed in bold as used in the passage.

 DENT

Choose the word which is most similar in meaning to the word printed in bold as used in the passage.

 INCULCATE

Choose the word which is most opposite in meaning to the word printed in bold as used in the passage.

CONVERSELY

Choose the word which is most opposite in meaning to the word printed in bold as used in the passage.

 WEAKEN

Which of the phrases (1), (2), (3) and  (4) given below each sentence should replace the phrase printed in bold in the sentence to make it grammatically correct ? If the sentence is correct as it is given and no correction is required. mark (5) as the answer.

Since the deadline has been changed from next week to this Thursday you should give this work priority

Which of the phrases (1), (2), (3) and  (4) given below each sentence should replace the phrase printed in bold in the sentence to make it grammatically correct ? If the sentence is correct as it is given and no correction is required. mark (5) as the answer.

After the success of our project we have been receiving more requests than we do not have the resources to handle them.