Direction (Qs.1 to 6): Read the passage carefully and answer the questions given below it. There are some blanks given in the passage based on which some questions are framed, and some words are highlighted as well to help you answer some of the questions.

Two global developments have helped _____ (A) India’s domestic slowdown this year: cooling oil prices, and declining interest rates globally. Brent crude has averaged $63 per barrel in 2019 so far, compared with $71 in 2018. This has helped ease India’s current account deficit (CAD) and inflation. And three rate cuts by the US Federal Reserve in 2019 eased global financial conditions, and gave a big breather to slowing emerging markets. (B) Had the hiked (a) been similar to 2018—when the Fed had scenario (b) rates four times and emerging markets got ensuing (c) in the battered (d) risk-off—India would have had it far worse. Low global interest rates have helped India attract $18.6 billion from foreign portfolio investors (FPIs) in 2019 so far. In contrast, FPIs pulled out $11.3 billion as the Fed began tightening. Not surprisingly, the rupee depreciated a mere 2.1% in 2019, compared with 9.6% in 2018. These tail winds gave the Reserve Bank of India (RBI) the latitude to cut rates by 135 basis points in 2019, at a time of limited fiscal space. (C) However, the US easing cycle appears/ to be halting, if not ending /and the Fed is unlikely to change rates/ in 2020, according to S&P Global. How would this affect India? A flashback would be in order here. The Fed has triggered waves of easing and tightening since the global financial crisis. In its easing cycle of 2008 to 2012, it pared rates to the zero _____(D) and made massive asset purchases in three phases of quantitative easing (QE), which caused a liquidity surfeit globally. And when the Fed hinted at tapering QE in 2013, it sent global markets into a tizzy. “Normalization” of monetary policy went on till 2018, which included nine rate hikes and a reduction in the Fed’s balance sheet. (E) However, the easing (a) resume (b) again in 2019, as US-China trade tension (c) weighed (d) on growth. India, in general, wasn’t too adversely impacted in this “tightening” cycle (2013-18) compared with the easing period. Sure, FPI inflows contracted, but they remained net positive. Foreign direct investment (FDI), on the other hand, surged. Even more striking was that the rupee depreciated at a slower rate and was less volatile on average during the tightening, compared with the easing period. (F) However, significant exceptions were 2013 and 2018, _____. What explains this? India’s own vulnerability to external shocks. Crisil measures this using indicators of the quantum of external liabilities (current account deficit, or CAD, and external debt), ability to finance these liabilities (through our foreign exchange reserves), and domestic macroeconomic health (growth-inflation mix and fiscal health).