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The question is from CAT Paragraph Completion. CAT exam will have 1~2 questions from Paragraph Completion. Solve CAT Questions from Paragraph Completion to get more practice and 2IIMs CAT questions bank provides you with CAT questions from Para Completion that can help you gear for CAT Exam.

Question 38: In strictly economic terms, the political character of a nation's trading partners should not matter. However, in a world of strategic competition, international commerce can be, and usually is, an instrument of policy, and its use in that context should not be denied simply because it breaches the sacred principle of free trade.

  1. This is the Rodrik trilemma: it is not possible to have the nation-state, democracy, and globalization at the same time.
  2. As Friedrich List, the nineteenth-century pioneer of economic nationalism, pointed out, free trade assumes a peaceful world.
  3. That is why, all over the world, nations have been revolting against globalization in the name of democracy.
  4. As limiting free trade inevitably leads to trade wars, it is not possible to achieve legitimate protectionist aims without disrupting the world economic system.

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Explanatory Answer

Method of solving this CAT Question from Paragraph Completion:

The main idea of the given paragraph is that in a world of strategic competition, the context–the political character of a nation's trading partner–matters. Because this is so, international commerce is usually a matter of policy, even if its use in this manner is a breach of the principle of free trade.

Of the given options, option B completes the given paragraph best. The paragraph stresses the importance of political context in international commerce. Option B carries forward the idea in the penultimate line: free trade assumes a peaceful world.

Option A, which talks of the 'Rodrik trilemma', of the nation state, democracy and globalization, discusses many new ideas. The paragraph does not explain any trilemma. So, option A is not a good option to complete the paragraph.

Option C is ruled out for the same reason as A. The paragraph given does not talk of globalization or democracy.

Option D is a good contender to B, as it touches upon the ideas mentioned in the paragraph: limiting free trade and disruption of the world economic system. But while the paragraph is about how political context influences trade policy, option D is about nations achieving "legitimate protectionist aims". Option D is about a related, but slightly tangential idea. Between options B and D, B is better.

The question is " Choose the Sentence that completes the Paragraph "

Hence, the answer is Sentence B

Choice B is the correct answer.


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