Reading Passage Comprehension Practice for Competitive examination like JKSSB
Classical economics, the framework in which most academic theorists historically spent almost all their time, is based on the assumption that the consumer community behaves with perfect rationality. Economists take great pains to defend that assumption, often restricting their analysis to the market models that the existing framework has defined as rational. When research proceeds in this fashion, findings tend to be incremental, reinforcing the established models rather than challenging them. Yet, over time, anomalies—real-world financial decisions that cannot be explained within the current framework—accumulate. Initially, these anomalies are dismissed as temporary market noise or as irrational deviations to be smoothed out within the existing theoretical structure. However, as these anomalies grow in number and significance, they begin to erode confidence in the prevailing framework.
The resolution of such crises is not a straightforward process of mathematical adjustment, as traditionalists might suggest but rather a transformation in the very way economists view human behavior. Behavioral revolutions occur when a new framework emerges—one that is not merely an extension of the old but a fundamental reconceptualization of human psychology. This shift is not purely mathematical or abstract; it involves a radical change in perspective, akin to a cognitive awakening. The Keynesian Revolution, for example, did not merely adjust supply and demand curves; it redefined the very framework through which national unemployment and government intervention were understood. Similarly, prospect theory did not just modify expected utility models but replaced their foundational assumptions about human risk and choice.
Questions and Options
11. According to the passage, why do behavioral revolutions represent a rupture rather than a continuation of prior economics?
A) Because economists abandon statistical modeling and turn to guessing.
B) Because competing frameworks redefine questions and assumptions, making continuity impossible
C) Because new frameworks invalidate all historical market data.
D) Because economists stop observing consumer behavior entirely.
12. From the above passage, Identify the voice used in the sentence: "Initially, these anomalies are dismissed as temporary market noise or as irrational deviations to be smoothed out within the existing theoretical structure."
A) Active voice
B) Middle voice
C) Passive voice
D) Reflexive voice
13. What type of clause is used in the sentence given below from the above passage: "Yet, over time, anomalies—real-world financial decisions that cannot be explained within the current framework—accumulate."
A) Noun clause
B) Relative clause
C) Adverbial clause
D) Independent clause
Answer Key for your reference:
- 11: B (Parallels the conceptual shift question)
- 12: C (Identifies the passive verb phrase "are dismissed")
- 13: B (Identifies the relative clause "that cannot be explained...")