Find all School-related info fast with the new School-Specific MBA Forum

It is currently 25 Oct 2014, 12:13

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Bank depositors in the United States are all financially

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
Senior Manager
Senior Manager
avatar
Joined: 07 Mar 2006
Posts: 352
Followers: 1

Kudos [?]: 9 [0], given: 1

Bank depositors in the United States are all financially [#permalink] New post 26 Jun 2006, 17:38
00:00
A
B
C
D
E

Difficulty:

(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions
Bank depositors in the United States are all financially protected against bank failure because the government insures all individuals' bank deposits. An economist argues that this insurance is partly responsible for the high rate of bank failures, since it removes from depositors any finan-cial incentive to find out whether the bank that holds their money is secure against failure. If depositors were more selective, then banks would need to be secure in order to compete for depositors' money.

The economist's argument makes which of the following assumptions?


A Bank failures are caused when big borrowers default on loan repayments.

B A significant proportion of depositors maintain accounts at several different banks.

C The more a depositor has to deposit, the more careful he or she tends to be in selecting a bank.

D The difference in the interest rates paid to depositors by different banks is not a significant factor in bank failures.

E Potential depositors are able to determine which banks are secure against failure.
Kaplan Promo CodeKnewton GMAT Discount CodesManhattan GMAT Discount Codes
Senior Manager
Senior Manager
User avatar
Joined: 07 Jul 2005
Posts: 406
Location: Sunnyvale, CA
Followers: 2

Kudos [?]: 3 [0], given: 0

 [#permalink] New post 26 Jun 2006, 17:47
(E)

this is the only relevant assumption.
Also, you need to change the subject to CR .. It incorrectly mentions as SC..
SVP
SVP
avatar
Joined: 30 Mar 2006
Posts: 1741
Followers: 1

Kudos [?]: 28 [0], given: 0

 [#permalink] New post 26 Jun 2006, 20:27
Will go with E.

Clearly for the economist to suggest that consumers should be selective, he/she has to assume that consumers are capable of determining the factors that make a bank a stronger candidate
  [#permalink] 26 Jun 2006, 20:27
    Similar topics Author Replies Last post
Similar
Topics:
Bank depositors in the United States are all financially imhimanshu 0 29 Jun 2013, 08:15
Bank depositors in the United States are allfinancially lys8207 0 23 Mar 2012, 11:16
Bank depositors in the US are all financially protected Mikko 0 29 Jun 2013, 08:35
4 Bank depositors in the United States are all financially lexis 30 08 May 2008, 11:45
Bank depositors in the U.S. are all financially protected kdhong 9 17 Aug 2005, 20:42
Display posts from previous: Sort by

Bank depositors in the United States are all financially

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.