Multiple choice

Directions: Choose the correct word for blank (1).

The new RBI governor faces what economists call a central banker's ___ (1) __. He has to arrest the rupee's slide, cool inflation and create conditions that will boost-growth. Attempting all three simultaneously is a __ (2) ___ task. When growth ___ (3) ___ it is usually expected that the central bank will cut interest rates to ___ (4) ___ demand and spending. Higher demand and spending that is triggered by lower interest rates can also push prices up and ___ (5) ___ inflation, especially when the current inflation rate is very high.

  1. dilemma

  2. muddle

  3. trilemma

  4. quagmire

  5. predicament

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Correct; the lines describe three situations to deal with.