All India Management Association (AIMA) 2008 Entrance Exams Management Aptitude Test (MAT) MANAGEMENT APTITUDE TEST(-) - Question Paper

deficits and surpluses will balance out in order to provide a trade balance’.
Which of the subsequent conclusions best summarises the argument presented in the passage above?
(1) India’s trade deficits and surpluses with other countries always balance out.
(2) Left parties need not worry about trade deficits in India since its trade will always be in balance
even though it runs a deficit with a single country.
(3) The Left parties in India should not be concerned about India’s trade deficits with specific
countries because they will balance out in the long run.
(4) None of these

150. Inflation can only be fundamentally caused by 2 factors – supply side factors and demand side
factors. These factors are either reductions in the supply of goods and services or increases in demand
due to either the increased availability of money or the reallocation of demand. Unless other
compensating modifications also occur, inflation is bound to outcome if either of these occurs. In economics
prior to the introduction of banks (a pre–banking economy) the volume of money available, and hence,
the level of demand, was equivalent to the volume of gold available.
If the statements above are true, then it is also actual that in a pre–banking economy,
(1) If other factors in the economy are unchanged, increasing the volume of gold available would
lead to inflation.
(2) any inflation would be the outcome of reductions in the supply of goods and services.
(3) if there is a reduction in the volume of gold available, then, other things being equal, inflation
would outcome.
(4) whatever modifications in demand occur, there would be compensating modifications in the supply of
goods and services.

151. The cost of housing in many urban parts of India has become so excessive that many young couples,
with above–average salaries, can only afford small apartments. EMI and rent commitments are so huge
that they cannot consider the possibility of starting a family since a new baby would probably mean
either the mother or dad giving up a well–paid position – something they can ill afford. The lack of or
great cost of child care facilities further precludes the return of both parents to work.
Which of the subsequent adjustments could practically be made to the situation defined above which
would allow young couples to improve their housing prospects?

Earning:   Approval pending.