English Language Quiz for Prelims Exams- SBI & IBPS 2020- 21st December, 2020

Directions (1-10): Read the following passage carefully and answer the questions given below it. Certain words/ phrases are printed in bold to help you to locate them while answering some of the questions.

Apple
and the United States are crying foul over the ruling in Europe that Apple
received illegal tax breaks from Ireland and must hand over 13 billion euros
($14.5 billion), a record tax penalty in Europe . But Apple and the United
States have only themselves to blame for the situation.

Apple
has engaged in increasingly aggressive tax avoidance for at least a decade,
including stashing some $100 billion
in Ireland without paying taxes on much of it anywhere in the world, according
to a Senate investigation in 2013. In a display of arrogance, the company
seemed to believe that its arrangements in a known tax haven like Ireland would
never be deemed illegal — even as European regulators cracked down in similar
cases against such multinational corporations as Starbucks the German chemical
giant BASF. Congress, for its part, has sat idly by as American corporations
have indulged, Amazon, Fiat and in increasingly intricate forms of tax
avoidance made possible by the interplay of an outmoded corporate tax code and
modern globalized finance. The biggest
tax dodge in need of reform involves deferral, in which American companies can
defer paying taxes on foreign-held profits until those sums are repatriated. Initially, deferral was a
convenience for multinationals, as they sought investment opportunities abroad
while lobbying Congress for tax-rate cuts in exchange for repatriating the
money. Currently, there is some $2 trillion in corporate profits in offshore
tax-deferred accounts; besides Apple, Microsoft, Google, Cisco and Oracle also
have large stashes. Apple is one of nearly two dozen major corporations pushing
Congress for a “tax holiday,” which would let companies bring back foreign-held
money over the course of a year at a discounted tax rate, rather than the
current rate, 35 percent.

Before
the European ruling on Tuesday, the debate over a tax holiday had pitted
Republicans, who have generally favored the idea, against Democrats, who have
viewed it as an unjustified reward for tax avoidance. The Democrats have
history on their side. A tax holiday in 2005 lowered the corporate rate to 5.25
percent, enticing corporations to
repatriate some $300 billion. It was billed as a way to create jobs and
increase investment, but the money was used mostly for dividend payments, share
buybacks (which tend to raise executive pay) and severance for laid-off
employees. Worse, the tax holiday
inspired multinationals to stash as much money abroad as they possibly could in
anticipation of another holiday.

The
European ruling, however, could sharply alter the terms of the congressional
debate. Republicans and Democrats alike have always assumed that foreign-held
profits would one day be repatriated. The big question was the rate at which
they would ultimately be taxed. Similarly, the Treasury assumes that deferred
foreign profits will one day be taxed when it projects future revenues — an
important measure of the nation’s fiscal health. But the money won’t be
repatriated and taxed under American law if Europeans, in the course of
enforcing their own laws against tax havens, get their hands on it first and
that in the nutshell is the reason due to which the members of Congress and
Treasury officials are not in favour of the Apple ruling. They understand,
correctly, that tax-law enforcement in Europe could reduce the sums they expect
to collect taxes on someday.

What
they don’t understand, or aren’t saying, is that they brought the problem on
themselves. The way forward is not to declare a tax war with Europe. It is for
Congress to agree on a way to tax foreign-held corporate profits. President
Obama put forth a reasonable approach in 2015, when he proposed a mandatory 14
percent tax on multinationals’ current offshore profits — whether they are
repatriated or not — and, thereafter, a new minimum tax rate of 19 percent on
profits moved offshore. An even better solution would be to simply end
indefinite corporate tax deferral, imposing American taxes on profits when they
are made. Republicans rejected Mr. Obama’s proposal in 2015, and there is no
chance that lawmakers will engage in such a debate so close to the election.
But the next president and Congress will need to act to ensure that at long
last, American corporations pay their fair share in taxes.

Q1. Why
deferral is the biggest taproot of global tax avoidance?

(a) As
deferral has resulted in obliterating the taxes of companies like Apple
entirely.

(b) As
deferral allows them to take their business to foreign soil with less paperwork
and regulations.

(c) Since a company or an organization which is
already being taxed in foreign soil is not taxed in America for the
repatriation purposes.
(d) As American companies are engineering it to shift the profits into foreign
accounts.
(e) None of these.

Q2. Which
of the following is not true about ‘tax holiday’ in context of the passage?

(a) Tax
holiday was demanded by the companies on account of creating employment but the
money was instead used for their own benefits.

(b) Tax
holiday encouraged the companies to move the profits to offshore tax-deferred
accounts.

(d) Republicans
are generally in favour of tax holiday.

(e) None
of these.

Q3. Why members of Congress and
Treasury officials are so upset about the Apple ruling?

(a) As
they feel it is not justified and that it might put the hard earned money of
the Americans in peril.

(b)The
fear of squandering the opportunity of getting their hands on the foreign held
profits.

(c) As
they won’t be able to further slash the taxes and the money will be taxed at
the current 35% when it will be finally brought.

(d)As
it will discourage the corporations in America from doing the business in
Europe and thus they won’t be able to repatriate the money.

(e)
None of these.

Q4.
Which of the following statement(s) is/are true in context of the passage?

(i) The new minimum tax rate after President
Obama’s proposal would be 14 percent.

(ii)
Apple has largest share in some $2 trillion in corporate profits in offshore
tax-deferred accounts.

(iii)The
tax holiday in 2005 was a success as it created jobs and increased investment.

(a)
Only (i).

(b)
Both (ii) and (iii).

(d)
Both (i) and (iii).

(e)
None of these.

Q5. Why Apple
and the United States should be blamed for the situation?

(a) As
Apple was not made aware of the consequence of its action by the Congress which
could have avoided the situation.

(b) As
apple and Congress neglected all the warnings by the European authorities.

(d) As
situation is a result of arrogance of Apple and the inactiveness of the
Congress to take appropriate measures.

(e) For
not sorting out the difference between them on tax cut and tax holiday before
the European ruling.

Q6. What
according to the author is the best possible step that must be taken by the
Congress to approach this situation?

(a) The
money that is stashed should be taxed at much higher rate than the current rate
of 35%.

(b)
Congress must put an end to the deferral to avoid such situations in future.

(c) By
accepting the proposal by Obama in which he proposed a mandatory 14 percent tax
on multinationals’ current offshore profits.

(d) Strict
legal actions against the companies that indulge in the activities involving tax avoidance made possible by the
interplay of an outmoded corporate tax code and modern globalized finance.

(e) None
of these.

Directions (7-8 ): Choose the word/group of words which
is MOST SIMILAR in meaning to the word/ group of words printed in bold
as used in the passage.

Q7. Stashing

(a) Garner

(b)
Curtailment

(d)
Paucity

(e)
Scantiness

Q8. Enticing

(a)Baffle

(b)Hamper

(c)Enchanting

(d)Chagrin

(e)Embitter

Directions (9-10): Choose the word/group of words which
is MOST OPPOSITE in meaning to the word/ group of words printed in bold
as used in the passage.

Q9. Repatriate

(a)Abrogation

(b)Rejuvenation

(c)Refurbishment

(d)Revivification

(e)Instauration

Q10. Worse

(a)Amateurish

(b)Shoddy

(c)Rotten

(d)Bewildered

(e) Wonderful

Directions (11-15): Rearrange the following six sentences
(A), (B), (C), (D) and (E) and in the proper sequence to form a meaningful
paragraph, then answer the questions given below them.

(A)The progress possible in the future is often overlooked for
gains in the present.

(B) There is always a basic tension between the policy imperatives
of long-term future and those of the immediate present.

(D)Whether it is in matters of dealing with national security,
floods and droughts, infrastructural development, clean politics and what not,
the minds of our political class are fixated on the past and rarely the future.

(E)Even as leaders in developed countries are assessing the
international system, our own politicians are engaged in reviving past tensions
and quarrels.

(F)Formulating plans for the future needs a strong sense of values,
priorities, creativity, all of which call for an intellectual equipment of a
higher caliber.

Q11. Which of the following should be the FOURTH sentence after
the rearrangement?

(a) D (b) F (c) A (d) E (e) C

Q12. Which of the following should be the SECOND sentence after
the rearrangement?

(a) A (b) D (c) F (d) B (e) E

Q13. Which of the following should be the FIRST sentence after
the rearrangement?

(a) E (b) B (c) D (d) C (e) F

Q14. Which of the following should be the SIXTH (LAST) sentence
after the rearrangement?

(a) A
(b) B (c) F (d) E (e) C

Q15. Which of the following should be the FIFTH sentence after
the rearrangement?

(a) E (b) D (c) B (d) C (e) F

SOLUTIONS:

S1. Ans. (d)

Sol. Clearly in the 2^nd
paragraph of the passage the author has explained how the deferral system has
increased the stash in offshore tax deferred accounts.

S2. Ans. (c)

Sol. Democrats weren’t against the
repatriation but they viewed deferral as an unjustified reward
for tax avoidance also due to the reason that they failed to keep their
promise.

S3. Ans. (b)

Sol. Refer to the 4^th
paragraph of the passage, “But the money won’t be repatriated and
taxed under American law if Europeans, in the course of enforcing their own
laws against tax havens, get their hands on it first and that in the nutshell
is the reason due to which the members of Congress and Treasury officials are
not in favour of the Apple ruling.”

S4. Ans. (e)

Sol. None of these is the correct
choice. Option (i) is incorrect as the new minimum tax is 19 percent after the
proposal. Option (iii) is incorrect as tax holiday wasn’t a complete success as
the promises were not kept. Option (ii) is also incorrect as it is not
mentioned if apple has the largest stash in the deferred accounts.

S5. Ans. (d)

Sol. It is mentioned in the passage
that Apple’s ignorance due to its arrogance and congress’ idleness is the
possible reason for the situation.

S6. Ans. (b)

Sol. Refer to the last
paragraph of the passage, “. An even better solution would be to
simply end indefinite corporate tax deferral, imposing American taxes on
profits when they are made.”

S7. Ans. (a)

Sol. Stashing means store (something)
safely in a secret place hence garner is the word most similar in
meaning which means gather or collect (something, especially information
or approval).

S8. Ans. (c)

Sol. Enticing means attractive or
tempting; alluring hence enchanting is the word most similar in meaning
which means delightfully charming or attractive.

S9. Ans. (a)

Sol. Repatriate means return to one’s own
country hence abrogation is the word most opposite in meaning which
means repeal or abolition of a law, right, or
agreement.

S10. Ans. (e)

Sol. Worse means of poorer quality
or lower standard; less good or desirable

S11. Ans. (e)