Concept:Arranging sentences in a logical sequence to form a coherent paragraph.
Explanation:Sentence S1 sets the context: India was a British colony, so exchange rate adjustment was impossible.
Sentence Q explains the consequence: With devaluation impossible, falling export demand caused sustained deep deflation.
Sentence S states that real interest rates rose as a result of deflation.
Sentence P follows logically: indebted businesses failed due to higher real interest rates and deflation.
Sentence R adds that indebted households liquidated assets to repay loans when possible.
Sentence S6 concludes: Banks ended up with unrecoverable assets because both businesses and households defaulted.
Thus, the correct order is Q (cause), S (intermediate effect), P (effect on businesses), R (effect on households).
Answer:SQPR (Option C).