Check GMAT Club Decision Tracker for the Latest School Decision Releases https://gmatclub.com/AppTrack

It is currently 25 May 2017, 23:02

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.

Close

Request Expert Reply

Confirm Cancel

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Bank depositors in the United States are all financially

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

Kudos [?]: 32 [0], given: 1

Bank depositors in the United States are all financially [#permalink]

Show Tags

New post 26 Jun 2006, 18:38
00:00
A
B
C
D
E

Difficulty:

(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions

HideShow timer Statistics

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.
Economist GMAT Tutor Discount CodesManhattan GMAT Discount CodesKaplan GMAT Prep Discount Codes
Senior Manager
Senior Manager
User avatar
Joined: 07 Jul 2005
Posts: 404
Location: Sunnyvale, CA
Followers: 2

Kudos [?]: 13 [0], given: 0

 [#permalink]

Show Tags

New post 26 Jun 2006, 18:47
(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: 1730
Followers: 1

Kudos [?]: 82 [0], given: 0

 [#permalink]

Show Tags

New post 26 Jun 2006, 21:27
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, 21:27
    Similar topics Author Replies Last post
Similar
Topics:
California is one of the few states in the United States gmatbull 9 13 Aug 2010, 17:40
Sales of United States manufactured goods to bmwhype2 4 20 Jul 2007, 03:35
Officials at the United States Mint believe that the LM 1 23 Jun 2007, 05:21
SC-United States johnycute 5 23 Jun 2007, 04:32
SC1000 - The elderly in the United States jaisalfaujdar 2 16 Jun 2007, 01:17
Display posts from previous: Sort by

Bank depositors in the United States are all financially

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| 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®.