Banker: My country's laws require every bank to invest in its local co

AndrewN

I interpreted (D) as this:

D. It overlooks the possibility that even if there is a strong correlation between two phenomena (phenomenon 1: physical banking, phenomenon 2: online banking), neither of those phenomena are necessarily causally responsible for the other.

Author concludes:
physical banking -> revitalize impoverished local communities.
online banking -> not revitalize impoverished local communities

Can't we say that phenomenon 1 (physical banking) and phenomenon 2 (online banking) are not casually responsible for the other?

AndrewN

Thanks for your reply.

I wonder, when you read choice (D) for the first time, how did you interpret those two phenomena? Something like the way interpreted? (phenomenon 1: physical banking, phenomenon 2: online banking)

Similarly, when you read choice (C), how did you interpret "condition, cause, effect"?

I am asking about these two choices because these words (phenomena in D & condition, cause, effect in C) are hard to map into passage.

The banker's argument is most vulnerable to criticism on the following ground:

E. It fails to adequately address the possibility that an increase in the number of banks of one kind in the banker's country will not lead to the complete elimination of banks of another kind.

The banker assumes that the increasing number of internet-based banks, which are not physically located in any specific community, will completely replace the traditional banks that operate within local communities. However, this assumption may not hold true. It is possible for both types of banks to coexist, with traditional community banks continuing to serve their intended purpose alongside the internet-based banks. The argument overlooks the possibility that the presence of internet-based banks does not necessarily lead to the complete elimination of physically located banks serving local communities.

@GMATNinja, @VeritasKarishma, @MartyTargetTestPrep

Please let me know your thought process to eliminate option D in this question. Also, kindly provide some references for similar official questions in case you have them handy (related to correlation and causation)

The argument concludes that "the law will soon entirely cease to serve its intended purpose." Why? Because an increasing number of banks are not physically located in any specific community. As a result, the law which requires banks to invest in their local community may not apply to them. According to the argument, this will "entirely" prevent the law from serving its purpose of revitalizing "impoverished local communities."

Let's now consider (D):


Does the argument make this particular error? To determine this, let's see how the answer choice might map to the argument.

In theory, what correlation might (D) be referring to? It's hard to say. The argument suggests that a trend (the increasing number of online-only banks) will have a certain effect (the law will "entirely" cease to serve its purpose). But that isn't a correlation so much as a proposed cause-and-effect.

Going through the rest of the argument, it's hard to find any correlation discussed. In theory, a correlation would be an observation that a certain phenomenon tends to occur along with another phenomenon. For instance, you might cite data that people who eat ice cream are on average better at surfing than people who don't. Could we conclude from this that ice cream causes people to be better at surfing? Definitely not. It might be that people who live near the ocean tend to eat a lot of ice cream and be good at surfing. The two phenomena are correlated, but one doesn't cause the other.

Going back to the argument, no observations of correlated phenomena are cited. So it's hard to see how the argument overlooks the possibility that a that correlation is not actually a causation.

For that reason, we can eliminate (D).

I hope that helps!

The banker's argument is most vulnerable to criticism on the ground stated in option E:

E. It fails to adequately address the possibility that an increase in the number of banks of one kind in the banker's country will not lead to the complete elimination of banks of another kind.

The banker argues that the community lending laws will soon "entirely cease to serve its intended purpose" because an increasing number of banks exist solely online and are not physically located in any specific community.

However, this argument fails to consider the possibility that even as online-only banks increase, traditional brick-and-mortar banks located in physical communities may still exist. The increase in one type of bank does not necessarily mean the complete elimination of the other type.

The other options do not directly address the vulnerability in the banker's reasoning:

A is about the location of brick-and-mortar banks, which is not the focus of the criticism.
B assumes that laws only serve one purpose, which is not relevant to the criticism.
C is about causation, which is not the issue with the banker's argument.
D is about correlation and causation, which is also not the issue with the banker's argument.

Therefore, option E correctly identifies the key vulnerability in the banker's argument by pointing out that the increase in one type of bank does not necessarily lead to the complete elimination of the other type.