English Language · English

Read the following passage carefully: 'Macroeconomic stability is critical, both for fostering rapid growth as well as sustained poverty reduction. Periods of macroeconomic instability can result in greater inequality, prove more harmful to the poor, and may result in the creation of poorer conditions, as the non-poor fall below the poverty line in periods of crisis. Moreover, in periods of macroeconomic instability, the pressures for budgetary retrenchment often affect the poor most. Even with the best intentions concerning social safety net programs and policies to shield expenditures on vital social services, it may be difficult to avoid cutbacks in some areas that affect the poor. The evidence also suggests that wealth creation results in "churning" in the poverty status of households. Inevitably, in the process of real growth, some groups and sectors benefit, while others lose out. In net terms, poverty rates may decline but some households may become poor while others escape poverty.' With reference to the above passage, which of the following inferences can be drawn? 1. Maintaining macroeconomic stability is essential for equitable economic development and the protection of vulnerable populations. 2. Because some individuals fall into poverty during periods of economic growth, economic growth itself is inherently detrimental to the poor. Choose the correct answer using the codes given below.