In the 1960s, Northwestern University sociologist John McKnight coined

Question

In the 1960s, Northwestern University sociologist John McKnight coined the term redlining, the practice of denying or severely limiting service to customers in particular geographic areas, often determined by the racial composition of the neighborhood. The term came from the practice of banks outlining certain areas in red on a map; within the red outline, banks refused to invest. With no access to mortgages, residents within the red line suffered low property values and landlord abandonment; buildings abandoned by landlords were then more likely to become centers of drug dealing and other crime, thus further lowering property values.

Redlining in mortgage lending was made illegal by the Fair Housing Act of 1968, which prohibited such discrimination based on race, religion, gender, familial status, disability, or ethnic origin, and by community reinvestment legislation in the 1970s. However, redlining has sometimes continued in less explicit ways, and can also take place in the context of constrained access to health care, jobs, insurance, and more. Even today, some credit card companies send different offers to homes in different neighborhoods, and some auto insurance companies 15 offer different rates based on zip code.

Redlining can lead to reverse redlining, which occurs when predatory businesses specifically target minority or low income consumers for the purpose of charging them more than would typically be charged for a particular service. When mainstream retailers refuse to serve a certain area, people in that area can fall prey to opportunistic smaller retailers who sell inferior goods at higher prices.   1 
 1. Which of the following, not mentioned in the passage, would qualify as an example of reverse redlining as defined in the passage?

(A) A bank refuses to offer mortgages to consumers in certain neighborhoods. 
(B) Residents of low-income neighborhoods are less likely to be hired for positions than residents of higher-income neighborhoods, even when the applicants have the same qualifications. 
(C) Police respond to reports of crimes more quickly in some neighborhoods than in others. 
(D) A grocery store in a low-income neighborhood sells low-quality produce for high prices, knowing that most residents do not have the ability to buy elsewhere. 
(E) An auto insurance company hires an African American spokesperson in a bid to attract more African American consumers.

D 
 2 
 2. Which correctly describes a sequence of events presented in the passage?

(A) Subprime mortgages lead to widespread defaults, which lead to landlord abandonment. 
(B) Reverse redlining leads to landlord abandonment, which leads to the use of buildings for crime and drug dealing. 
(C) Landlord abandonment leads to redlining, which leads to crime and drug dealing. 
(D) Redlining leads to reverse redlining, which leads to constrained access to health care, jobs, insurance, and more. 
(E) Redlining leads to landlord abandonment, which leads to the use of buildings for crime and drug dealing.

E 
 3 
 3. Which of the following can be inferred from the passage?  
i) Redlining ceased with the passing of the Fair Housing Act in 1968.
ii)Providing services based on zip code may be a form of redlining.
iii)Access to mortgages is related to higher property values
a) i only
b) ii only
c) iii only
d) i & ii only
e) ii and iii Only
 E

sananoor · Answer

GMATNinja 
I need ur help with question 3
it is given in passage that "With no access to mortgages, residents within the red line suffered low property values and landlord abandonment"
from this statement can we access that "Access to mortgages is related to higher property values" isnt it tooo extreme? is the reverse of a statement from the passage is possible?

Nikhil · Answer

+1 kudos to the posts containing answer explanations of all questions

nitesh50 · Answer

I have the same issue. If any of the experts can please pitch in?

daagh 
 egmat 
 GMATNinja 
 LauraOrion

honneeey · Answer

4:40, All Correct!

1. Which of the following, not mentioned in the passage, would qualify as an example of reverse redlining as defined in the passage?

(A) A bank refuses to offer mortgages to consumers in certain neighborhoods. - Incorrect - this is an example of redlining
(B) Residents of low-income neighborhoods are less likely to be hired for positions than residents of higher-income neighborhoods, even when the applicants have the same qualifications. - Incorrect - this is an example of redlining
(C) Police respond to reports of crimes more quickly in some neighborhoods than in others. - Incorrect
(D) A grocery store in a low-income neighborhood sells low-quality produce for high prices, knowing that most residents do not have the ability to buy elsewhere. - Correct
Redlining can lead to reverse redlining, which occurs when predatory businesses specifically target minority or low income consumers for the purpose of charging them more than would typically be charged for a particular service. When mainstream retailers refuse to serve a certain area, people in that area can fall prey to opportunistic smaller retailers who sell inferior goods at higher prices.

(E) An auto insurance company hires an African American spokesperson in a bid to attract more African American consumers.- Incorrect

2. Which correctly describes a sequence of events presented in the passage?
(E) Redlining leads to landlord abandonment, which leads to the use of buildings for crime and drug dealing. - Correct

3. Which of the following can be inferred from the passage?
i) Redlining ceased with the passing of the Fair Housing Act in 1968. --- Redlining in mortgage lending was made illegal by the Fair Housing Act of 1968
BUT redlining has sometimes continued in less explicit ways, and can also take place in the context of constrained access to health care, jobs, insurance, and more.

ii)Providing services based on zip code may be a form of redlining. --
Even today, some credit card companies send different offers to homes in different neighborhoods, and some auto insurance companies 15 offer different rates based on zip code. -- In case of auto insurance companies different rates based on zip code is specified. If statement 2 was "Providing differing services based on zip code may be a form of redlining", then the auto insurance example would have sufficed.

Q1-Can we infer 2 based on "the practice of denying or severely limiting service to customers in particular geographic areas" in the first paragraph and because statement 2 says may be?

iii)Access to mortgages is related to higher property values --

With no access to mortgages, residents within the red line suffered low property values and landlord abandonment.

No Mortgages--> Low property values
Q2-So with mortgages, the property values can either remain same or rise. So can we surely say that Access to mortgages is correlated to higher property values?

AjiteshArun , GMATNinja , MagooshExpert , GMATGuruNY , VeritasKarishma , ChiranjeevSingh , VeritasPrepBrian , MartyMurray , ccooley , other experts - please enlighten

honneeey · Answer

Hi, Please refer to my explanation, it might help!

3. Which of the following can be inferred from the passage? i) Redlining ceased with the passing of the Fair Housing Act in 1968.-Not ceased, continued in but in different form. ii)Providing services based on zip code may be a form of redlining.-True, refer "Even today, some credit card companies send different offers to homes in different neighborhoods, and some auto insurance companies 15 offer different rates based on zip code.." iii)Access to mortgages is related to higher property values-True, refer "With no access to mortgages, residents within the red line suffered low property values and landlord abandonment; buildings abandoned by landlords were then more likely to become centers of drug dealing and other crime, thus further lowering property values.." It means, No access to mortgages therefore lowering property values.. Now, negating it will furnish" Access to mortgages therefore wont lead to lowering property values.." Lets go a step further.." Excellent access to mortgages therefore will lead to High property values" Now, what does the 3 statement imply? they imply that as access to mortgages changes, so does the property values! Hope it helps! a) i only b) ii only c) iii only d) i & ii only e) ii and iii Only- Correct answer

AdityaHongunti · Answer

I disagree with Q3 
the passage extract - some auto insurance companies 15 offer  different rates  based on zip code.

option 2 -  Providing services based on zip code  may be a form of redlining

providing service is not wrong ... differing in services based on based on zip codes is wrong...  GMATNinja   DmitryFarber  .. does "may be " qualify this answer??

iac0013 · Answer

Hey there! Thanks for posting.

I have to say i strongly disagree with the 3d question's answer. I would go for B. 
Indeed, the passage only states that "redlighting involves a lower property value". Does that mean that access to mortgage is related with a higher property value.
No, it only means that access to mortgage CAN AT LEAST ensure the current property value. Considering that the property value would increase is an assumption to me, not a inference.

Can you confirm OA?

Best

MG1105 · Answer

workout  In the third question, iii) can not be inferred from the following lines "With no access to mortgages, residents within the red line suffered low property values and landlord abandonment; buildings abandoned by landlords were then more likely to become centers of drug dealing and other crime, thus further lowering property values. ". 
Just because A leads to B, we can not say that not A wil lead to Not B right? As far as my understanding goes, we can not infer in this way when it comes to GMAT type questions. Can you please help??

Skywalker18 · Answer

1. Which of the following, not mentioned in the passage, would qualify as an example of reverse redlining as defined in the passage?

(A) A bank refuses to offer mortgages to consumers in certain neighborhoods. - Incorrect - this is an example of redlining
(B) Residents of low-income neighborhoods are less likely to be hired for positions than residents of higher-income neighborhoods, even when the applicants have the same qualifications. - Incorrect - this is an example of redlining
(C) Police respond to reports of crimes more quickly in some neighborhoods than in others. - Incorrect
(D) A grocery store in a low-income neighborhood sells low-quality produce for high prices, knowing that most residents do not have the ability to buy elsewhere. - Correct
Redlining can lead to reverse redlining, which occurs when predatory businesses specifically target minority or low income consumers for the purpose of charging them more than would typically be charged for a particular service. When mainstream retailers refuse to serve a certain area, people in that area can fall prey to opportunistic smaller retailers who sell inferior goods at higher prices.

(E) An auto insurance company hires an African American spokesperson in a bid to attract more African American consumers.- Incorrect

2. Which correctly describes a sequence of events presented in the passage? 
(E) Redlining leads to landlord abandonment, which leads to the use of buildings for crime and drug dealing. - Correct

3. Which of the following can be inferred from the passage? 
i) Redlining ceased with the passing of the Fair Housing Act in 1968. --- Redlining in mortgage lending was made illegal by the Fair Housing Act of 1968
BUT redlining has sometimes continued in less explicit ways, and can also take place in the context of constrained access to health care, jobs, insurance, and more.

ii)Providing services based on zip code may be a form of redlining. -- 
Even today, some credit card companies send different offers to homes in different neighborhoods, and some auto insurance companies 15  offer different rates based on zip code . -- In case of auto insurance companies different rates based on zip code is specified. If statement 2 was "Providing  differing  services based on zip code may be a form of redlining", then the auto insurance example would have sufficed.

Q1-Can we infer 2 based on "the practice of denying or severely limiting service to customers in particular geographic areas" in the first paragraph and because statement 2 says may be?

iii)Access to mortgages is related to higher property values --

With no access to mortgages, residents within the red line suffered low property values and landlord abandonment.

No Mortgages--> Low property values 
 Q2-So with mortgages, the property values can either remain same or rise. So can we surely say that Access to mortgages is correlated to higher property values?

AjiteshArun  ,  GMATNinja  ,  MagooshExpert  ,  GMATGuruNY  ,  VeritasKarishma  ,  ChiranjeevSingh  ,  VeritasPrepBrian  ,  MartyMurray  ,  ccooley  , other experts - please enlighten

jabhatta2 · Answer

GMATNinjaTwo ,  SajjadAhmad ,  GMATNinja ,  u1983 ,  workout ,  Gnpth

Hi Experts - for question 3, i thought choice iii was wrong for the following reason

Just because per the passage , No Mortgages--> Lowering property values

Does not necessarily mean

Access to mortgages is related to higher property values

Its quite possible that access to mortgages, property values can either remain same or rise.

So how can you be 100 % sure what iii) is saying is true which is Access to mortgages is related to higher property values

RitujaBasu · Answer

In question 1, option D is very similar to the example mentioned in the passage/ However the question asks to choose among the options, one that is not mentioned in the passage.

nadaelnokaly · Answer

I just want to make sure that I understand Q3 well.
when we say A is related to B, does this mean: B caused A ? 
if yes then:

The passage states that: if A:no access to mortgage ---->then B: low property value
The choice: "Access to mortgages is related to higher property values"?

did we make the contrapositive?
not B -> A:
 if high property value-> then there was indeed an access for mortgage

VIGHNESHKAMATH · Answer

If you read the question stem carefully, it asks ''What can be inferred?'' The word ''can be'' is crucial. It indicates only possibility, not that it will happen for sure. We don't need prove it beyond a doubt, which is not the intention of the question stem. If the question would have been framed otherwise such as ''What is true/must be true among the below statement? Then, certainly, we cannot make such inferences. But there is a possibility that can be inferred logically. it is like a ''could be true'' statements, instead of ''must be true'' statements.

Hope I was able to clarify to some extent.

Thank You
Vighnesh

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In the 1960s, Northwestern University sociologist John McKnight coined

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In the 1960s, Northwestern University sociologist John McKnight coined

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