Directions (1-13): In the following passage, there are blanks, each of which has been numbered. These numbers are printed below the passage and against each, five words suggested, one of which fits the blank appropriately. Find out the appropriate word in each case.
The policy of artificial credit expansion central banks has permitted and ...1... over the last fifteen years could not have ended in any other way. The expansionary cycle which has now come to a close began gathering momentum ...2... the American economy ...3... from its last recession (fleeting and repressed though it was) in 2001 and the Federal Reserve re-embarked on the major artificial expansion of credit and investment ...4... in 1992. This credit expansion was not backed by a parallel increase in voluntary household saving. For many years, the money supply in the form of bank notes and deposits has grown ...5... an average rate of over 10 percent per year (which means that every seven years the total volume of money circulating in the world has doubled). The media of exchange originating from this severe fiduciary inflation have been placed on the market by the banking system as newly created loans granted ...6... very low (and even negative in real terms) interest rates. The above fueled a ...7... bubble in the shape of a substantial rise in the prices of capital goods, Real-estate assets and the securities ...8.... represent them, and are exchanged on the stock market, ...9... indexes soared. Curiously, like in the “roaring” years prior to the Great Depression of 1929, the shock of monetary growth has not significantly influenced the prices of the subset of consumer goods and services (approximately only one third of all goods). The last decade, like the 1920s, has seen a remarkable increase in productivity as a result of the introduction on a massive scale of new technologies and significant entrepreneurial ....10... which, were if not for the injection of money and credit, ...11... have given rise to a healthy and sustained reduction in the unit price of consumer goods and services. Moreover, the full incorporation of the economies of China and India into the globalized market has boosted the real productivity of consumer goods and services even ...12... .The absence of a healthy “deflation” in the prices of consumer goods in a stage of ...13... considerable growths.
