Question

The World Bank has declared that it does not plan to offer new financing to Sri Lanka, which is battling its worst economic crisis in decades, until the country has an adequate macroeconomic policy framework in place. In a statement, the World Bank said Sri Lanka needed to adopt structural reforms that focus on economic stabilisation and tackle the root causes of its crisis. The latter has starved it of foreign exchange and led to shortages of food, fuel, and medicines. The bank is repurposing resources under existing loans to help alleviate shortages of essential items such as medicine, cooking gas, fertiliser, meals for children, and cash for vulnerable households.
Based only on the above passage, which one of the following statements can be inferred with certainty?

• A. According to the World Bank, the root cause of Sri Lanka's economic crisis is that it does not have enough foreign exchange.
• B. The World Bank has stated that it will advise the Sri Lankan government about how to tackle the root causes of its economic crisis.
• C. According to the World Bank, Sri Lanka does not yet have an adequate macroeconomic policy framework.
• D. The World Bank has stated that it will provide Sri Lanka with additional funds for essentials such as food, fuel, and medicines.

Hint:

In reading comprehension, pay close attention to conditional statements (e.g., "until", "if...then"). They often provide the key to the correct inference. The condition for an action tells you something about the current state of affairs if the action is not happening.

Answer 1

The Correct Option is C

Step 1: Understanding the Concept:
This is a reading comprehension question that tests the ability to make a logical inference. The correct answer must be a statement that is directly stated or is a necessary conclusion from the information given in the passage, without making any external assumptions.
Step 2: Detailed Explanation:
Let's analyze the passage and evaluate each option.
The first sentence states: "The World Bank has declared that it does not plan to offer new financing to Sri Lanka... until the country has an adequate macroeconomic policy framework in place."
- Option (A): The passage says that the crisis "has starved it of foreign exchange". This phrasing implies that the lack of foreign exchange is a symptom or result of the crisis, not necessarily its root cause. The passage mentions the need to "tackle the root causes" separately. So, (A) is not a certain inference.
- Option (B): The passage says the World Bank stated that "Sri Lanka needed to adopt structural reforms". This is the bank's assessment of what Sri Lanka needs to do. However, it does not explicitly state that the World Bank itself "will advise" the government on this matter. While it might be likely, it is not stated with certainty in the text.
- Option (C): The first sentence establishes a condition for new financing: having an "adequate macroeconomic policy framework". Since the World Bank is currently not planning to offer new financing, it logically follows that this condition has not yet been met. Therefore, it is certain that, from the World Bank's perspective, Sri Lanka does not yet have this framework in place. This statement is a direct inference from the text.
- Option (D): This statement is directly contradicted by the passage. The first sentence says the bank "does not plan to offer new financing". The last sentence explains that the bank is "repurposing resources under existing loans," which means it is reallocating money from old loans, not providing new or "additional funds".
Step 3: Why This is Correct:
Option (C) is the only statement that can be concluded with certainty. The text creates a clear cause-and-effect link: NO new financing BECAUSE OF NO adequate framework yet. This makes the inference in (C) logically sound and directly supported by the text.