English Language Practice Questions For RBI Assistant Mains 2017

Though the future of cryptocurrencies is uncertain at this stage, the idea of blockchain deserves more attention
Bitcoin has dominated headlines in the financial world in recent months with a return of over 1,700% so far this year. Rising prices are attracting more investors, though some experts see the increasing ___(1)____  as a sign of a bubble. But this is not the only problem.

Bitcoin is an unregulated ___(2)______  administered by a network of users through an open and distributed ledger known as blockchain. Each transaction is verified by the network. Since it is a distributed ledger and no one person or organization ____(3)____ , technically, chances of someone manipulating the system are very low. There are multiple reasons why people around the world are getting attracted to bitcoin or other such virtual currencies. Some people like the idea that it ___(4)____  to make electronic transactions without involving the formal system of banks and financial institutions. The possibility that demand for such an instrument will increase over time is ____(5)____. In different parts of the world, some people also wish to take _____(6)______  of domestic currency owing to economic and political instability. However, a large number of _____(7)_____  just to ride the momentum and make quick returns. Rising prices of unregulated cryptocurrencies could pose a number of problems for the formal financial system.

First, if the prices of bitcoin and other such currencies keep going up for a ____(8)____ , the fall could be painful. Prices are clearly being driven by speculation, as there is no underlying asset to back them. Further, rising prices will attract more people to start such currencies and _____(9)______  them. This will increase the contact of virtual currencies with formal finance, and developments in this market would affect the financial system. The beginning of futures trading in bitcoin is a major step towards making it more mainstream, even though its consequences are not well understood.

Second, if adoption of bitcoin or other such instruments actually increases significantly, it will ______(10)_______  for central banks. A central bank manages the supply and cost of money in the system to attain maximum growth with price stability. But in the world of unregulated cryptocurrencies, central banks may find it difficult to ___(11)_____  economic activity. Bitcoin, for example, is deflationary by design. Greater adoption could also alter the dynamics of capital control, especially in developing economies.

Third, an increase in the use of such instruments could also affect financial intermediation, investment and growth. Therefore, it is _____(12)______  to carefully evaluate the potential costs and benefits of a possible rise in the use of unregulated cryptocurrencies. However, as things stand today, the high level of volatility ____(13)_____  of bitcoin and other such instruments. It is highly unlikely that individuals or firms would be willing to write contracts in a currency whose value changes by 20-30% in either direction in no time. But it is possible that some virtual currencies may become more stable over time.

Although the outlook for bitcoin is fairly uncertain at this stage, the technology on ______(14)________  has a much wider appeal and could be useful in a number of areas. For instance, as we have argued in these pages before, blockchain has the potential to end property-related litigation in a country like India. The government can have a blockchain where ownership and transactions can be tracked easily. Similarly, blockchain can make government spending more efficient in areas such as the social sector, as it will increase transparency. The technology is also being tested in the financial sector to settle transactions. This could help reduce costs for financial institutions and the working capital requirement for other firms. The distributed ledger can have other usage such as smart contracts.

Even though the future of cryptocurrencies is uncertain at this stage, it is the idea of blockchain that deserves more attention, as it could potentially _____(15)_______  transactions are settled. Regulators would do well to closely track developments in this area so that financial stability risks can be avoided if adoption increases in the system.

Q1. 
(a) sign in
(b) highlights as
(c) hiking scenario
(d) level of interest
(e) reviewed feature

Q2. 
(a) cryptography which than
(b) crypto signature that is
(c) cryptocurrency who is
(d) digital featuring
(e) cryptocurrency which is

Q3. 
(a) clearly being
(b) controls it
(c) reasons that brings
(d) created that
(e) handled it

Q4.
(a) rarely bring
(b) seldom contribute
(c) is actually possible
(d) was actually possible
(e) initially directing

Q5. 
(a) pushing prices
(b) growing instruments
(c) social sector
(d) lucrative pricing
(e) indexing the money

Q6.
(a) into the market
(b) his money
(c) banknotes into the
(d) their savings out
(e) currency issue out

Q7. 
(a) adopting the bitcoin
(b) investors are buying
(c) cryptocurrencies could pose
(d) inventors are bringing
(e) investments is coming

Q8.
(a) considerable period
(b) risky period
(c) nominal period
(d) mainstream
(e) beginning of futures

Q9.
(a) enter in
(b) invest in
(c) ascertain them
(d) efficient in areas
(e) much wider

Q10. 
(a) maximize the results
(b) make things difficult
(c) create the dynamics
(d) actually, wish to take
(e) shift nominally

Q11. 
(a) posing a stability
(b) keep up with
(c) manage the level of
(d) adopt the reference of
(e) increase the contract to

Q12. 
(a) needed for the customers
(b) vital to the time
(c) policy must be
(d) keen to the policymakers
(e) important for policymakers

Q13. 
(a) can be avoided
(b) shows the limitation
(c) represents the systems
(d) also being tested
(e) rising the prices

Q14. 
(a) instruments increases
(b) with the effects
(c) which it works
(d) on which it works
(e) that it creates

Q15. 
(a) transform the way
(b) reoccur the way
(c) working on capital
(d) idealize the blockchain
(e) increases system