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Question:

In the question below, a statement is followed by three assumptions numbered I, II and III. An assumption is something supposed or taken for granted. You have to consider the statement and the following assumptions and decide which assumptions are implicit in the statement.

It is believed by many economists that to realize a 7 percent GDP growth rate in India, which is very much attainable, the gross fixed capital formation in the country must increase to 30 percent of GDP from the present level of 28 percent.
I. The target of 7 percent GDP growth is not feasible.
II. GDP growth rate is directly related to capital formation rate.
III. The GDP growth rate in a country is the only indicator of country’s economic development.

Explanation:

Assumption I is not implicit, since it states that 7% GDP growth is not feasible while the passage mentions that it is “very much attainable”.
Assumption II is implicit, since the passage does say that in order to attain a target GDP growth rate, there must be an increase in capital formation rate. Therefore, the two are directly related.
Assumption III is not implicit, since we cannot assume that there are no other indicators of a country's economic development besides the GDP growth rate. The passage provides no basis for such an assumption.
Since there is no option for 'Only II', we select option 4.
Hence, the correct answer is option 4.

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