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Directions (104–110) : In the given passage, there are blanks, each of which has been numbered. Against each, five words are suggested, one of which fits the blank appropriately. Find the appropriate word in each case.
Shanghai, which already boasts 14 subway lines, a high-speed maglev service, two huge modern airports, some twenty expressways and a bullet-train departure every three minutes, is about to add one more piece of infrastructure- the headquarters of the new BRICS development bank. China is setting up the bank together with the four other members of the BRIC club. Fittingly, the bank will focus on infrastructure (104) to poorer countries. China is also pushing to establish another multilateral creditor, the Asian infrastructure Investment Bank, which, as its name suggests, will (105) on the same thing. With these two new banks, China is exporting a central feature of its development model to the rest of the world. It spent 8.5% of its GDP investing in infrastructure from 1992 to 2011. That was more than any other country and well (106) the developing-country norm of 2–4% of GDP.
Given China’s growth-its economy expanded seven-fold during that time- the wisdom of investing in infrastructure seems self-evident. Research generally turns up a (107) relationship between infrastructure investment and growth, especially in poorer countries. According to a survey, making Latin America’s infrastructure as good as East Asia’s would increase annual growth rates by as much as five percentage points in the countries with the worst roads and phones. Yet it is difficult to isolate the precise effect on growth of any given project. Investment normally gives an immediate (108) to GDP, whether it involves a bridge to nowhere or one to a crowded island. What matters is the long-run impact. Over time, infrastructure can gin up growth in two main ways. It can generate a rise in incomes if reduced transaction costs promote trade. And it can raise growth rates if it leads to greater information sharing and thus improved productivity. But these effects are difficult to (109) because infrastructure investment often (110) with economic growth, casting doubt on causality. Did the new roads boost growth or did faster growth increase demand for them?
Shanghai, which already boasts 14 subway lines, a high-speed maglev service, two huge modern airports, some twenty expressways and a bullet-train departure every three minutes, is about to add one more piece of infrastructure- the headquarters of the new BRICS development bank. China is setting up the bank together with the four other members of the BRIC club. Fittingly, the bank will focus on infrastructure (104) to poorer countries. China is also pushing to establish another multilateral creditor, the Asian infrastructure Investment Bank, which, as its name suggests, will (105) on the same thing. With these two new banks, China is exporting a central feature of its development model to the rest of the world. It spent 8.5% of its GDP investing in infrastructure from 1992 to 2011. That was more than any other country and well (106) the developing-country norm of 2–4% of GDP.
Given China’s growth-its economy expanded seven-fold during that time- the wisdom of investing in infrastructure seems self-evident. Research generally turns up a (107) relationship between infrastructure investment and growth, especially in poorer countries. According to a survey, making Latin America’s infrastructure as good as East Asia’s would increase annual growth rates by as much as five percentage points in the countries with the worst roads and phones. Yet it is difficult to isolate the precise effect on growth of any given project. Investment normally gives an immediate (108) to GDP, whether it involves a bridge to nowhere or one to a crowded island. What matters is the long-run impact. Over time, infrastructure can gin up growth in two main ways. It can generate a rise in incomes if reduced transaction costs promote trade. And it can raise growth rates if it leads to greater information sharing and thus improved productivity. But these effects are difficult to (109) because infrastructure investment often (110) with economic growth, casting doubt on causality. Did the new roads boost growth or did faster growth increase demand for them?
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