Directions In each question a sentence is given followed by a blank You are provided with three frag...........

English ( Master) Sentence Completion

Directions : In each question a sentence is given followed by a blank. You are provided with three fragments I, II and III. You have to identify which statement/statements can carry forward the given sentence in the most logical way so as to make the sentence coherent and contextually correct.

However, this stimulation of the economy precipitates inflation and as inflation increases, ____________________ .

I. the economy goes into reverse and eventually there is a reduction in the money supply along with an increase in the interest rates.

II. the number of donuts you can buy with the same amount of money will increase too.

III. the demand for gold increases as it has a direct relationship with inflation and it acts as an inflation hedge for investors.

Only II

Only I and III

Only I and II

All of the above

None of the above

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Explanation:

Correct Answer is (b).However, this stimulation of the economy precipitates inflation and as inflation increases, the economy goes into reverse and eventually there is a reduction in the money supply along with an increase in the interest rates.
Statement I is correct.
However, this stimulation of the economy precipitates inflation and as inflation increases, the number of donuts you can buy with the same amount of money will increase too.
Statement II is incorrect as the amount of donuts would decrease with increase in inflation.
However, this stimulation of the economy precipitates inflation and as inflation increases, the demand for gold increases as it has a direct relationship with inflation and it acts as an inflation hedge for investors.
This is correct.
Hence, option B is correct.