Which one of the following statements best reflects the corollary to the passage given above?
Answer & explanation
Answer: (a) The central bank cannot work independently of the Government.
The passage says neither wing of macroeconomic policy — monetary or fiscal — can work independently without the other's support. Monetary policy is run by the central bank and fiscal policy by the Government, so the corollary is that the central bank cannot work independently of the Government.
- ✓ (a) Monetary policy (the central bank) 'cannot independently work without active support' of fiscal policy (the Government) — a direct restatement.
- ✗ (b) Regulation of financial markets and institutions is not mentioned.
- ✗ (c) Market economy versus socialist policies lies outside the passage.
- ✗ (d) Financial sector reforms are not discussed; the passage is about coordination between monetary and fiscal policy.
Remember · A corollary follows directly from the statement; translate its terms (monetary = central bank, fiscal = Government) and look for the restatement.
Question and answer: UPSC's official GS Paper II (2021, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·