PASSAGE 19 (Questions 6-10)

Directions: In the below given passage, there are blanks each of which has been numbered. Five words are suggested, one of which fits the blank appropriately. Find out the appropriate word in each case.

(Passage continued from previous page...)

The continuing economic crisis has put central banks and governments the world over into __(1)__ waters. For the industrialised West, the question seems to be a choice between economic stimulus and jobs, in the hope of creating a softer landing, or a swift shock at the hands of the free markets, in the hope of getting through the __(2)__ more quickly, In emerging markets, the question is how to deal with being the focal point for investors looking to maximise returns. Specifically, for the Federal Reserve in the United States, that, means __(3)__ hundreds of billions of dollars into the markets buying Treasury bills to increase liquidity. In Europe, the concern is that monetary union may be at risk due to the strains posed by euro-zone countries that are __(4)__ in __(5)__ In Asia, on the other hand, economies are surging, but the prospect of hot money flowing-into the region could potentially spell __(6)__ due to overheating. Fears that the Fed's second round of quantitative easing may lead to a faster pace of __(7)__ may be __(8)__ US unemployment remains persistently high at around 110%, while inflation remains astoundingly low at 1% or less, the slowest on record. That's despite the Fed's earlier injection of $ 1.7 trillion into the financial system to avert an economic depression in the wake of the global financial crisis. In contrast to the Fed's quantitative easing, the European Central Bank has reduced liquidity in the European banking system by some 350 billion euros during the past 5 months. This reflects the central bank's __(9)__ in the improved stability of the banking system and easier __(10)__ to capital.

 [RBI (GRADE-I), 2011]

Select the appropriate word for blank 6