Questions of the TOEFL iBT Reading Comprehension Practice Test 024

Question 1. According to the paragraph, what is government investment?
A) The use of private funds to support economic development
B) The use of public funds to support economic development
C) The use of public funds to hinder economic development
D) The use of private funds to hinder economic development

Question 2. According to the paragraph, which of the following is NOT true about government investment?
A) It is considered an important tool for promoting economic growth and development
B) It can help to address market failures and promote equitable distribution of resources
C) It can only have a positive impact on the economy
D) It can have a negative effect on the private sector

Question 3. The author mentions all of the following EXCEPT:
A) Infrastructure projects
B) Education and training programs
C) Government investment can only have a positive impact on the economy
D) Supporting the development of key industries and services

Question 4. Which of the following can be inferred from the paragraph about government investment?
A) Government investment always has a positive impact on the private sector.
B) Developing countries require government investment to finance their infrastructure.
C) Government investment is not necessary in developed countries.
D) The private sector is always negatively affected by government investment.

Question 5. The author of the paragraph implies that government investment:
A) is always transparent and well-understood by stakeholders
B) is unnecessary in developed countries
C) can reduce profits available to private companies
D) is always guided by a clear strategy

Question 6. Why does the author mention the importance of government investment being guided by a clear and well-understood strategy?
A) To emphasize the need for transparency in investment policies
B) To highlight the role of strong institutions in supporting government investment
C) To explain how government investment can address market failures
D) To suggest that government investment should always compete with private investment

Question 7. The word "incentives" in the passage is closest in meaning to:
A) benefits
B) drawbacks
C) motives
D) risks

Question 8. The phrase "market failures" in the passage is closest in meaning to:
A) the collapse of the stock market
B) the inability of the government to regulate markets
C) situations where the market cannot allocate resources efficiently
D) situations where the market is dominated by a single player

Question 9. In stating that government investment can help to create new opportunities for businesses and individuals, the author means that:
A) government investment can only benefit individuals and not businesses
B) government investment is only effective in creating opportunities for businesses
C) government investment can create opportunities for both businesses and individuals
D) government investment can only benefit the state and not individuals or businesses

Question 10. Which of the sentences below best expresses the essential information in the following sentence: "To minimize this risk, it is important for government investment to be carefully targeted and to complement, rather than compete with, private investment"?
A) Government investment should not compete with private investment, but rather work with it, in order to reduce the risk of negative impact on the private sector.
B) The government should carefully target its investments to minimize the risk of negative impact on the private sector.
C) Careful targeting and complementing private investment can reduce the risk of negative impact on the private sector, and this is important for government investment.
D) Complementary government investment, which does not compete with private investment, is important to minimize risk and prevent negative impact on the private sector.