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# In the aftermath of a worldwide stock-market crash, Country

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Senior Manager
Joined: 19 Feb 2004
Posts: 401
Location: Lungi
In the aftermath of a worldwide stock-market crash, Country  [#permalink]

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Updated on: 14 Dec 2018, 08:18
8
00:00

Difficulty:

15% (low)

Question Stats:

74% (01:13) correct 26% (01:25) wrong based on 422 sessions

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Project CR Butler:Day 39:Critical Reasoning (CR1)

In the aftermath of a worldwide stock-market crash, Country T claimed that the severity of the stock-market crash it experienced resulted from the accelerated process of denationalization many of its industries underwent shortly before the crash.

Which of the following, if it could be carried out, would be most useful in an evaluation of Country T's assessment of the causes of the severity of its stock-market crash?

(A) Calculating the average loss experienced by individual traders in Country T during the crash

(B) Using economic theory to predict the most likely date of the next crash in Country T

(C) Comparing the total number of shares sold during the worst days of the crash in Country T to the total number of shares sold in Country T just prior to the crash.

(D) Comparing the severity of the crash in Country T to the severity of the crash in countries otherwise economically similar to Country T that have not experienced recent denationalization

(E) Comparing the long-term effects of the crash on the purchasing power of the currency of Country T to the immediate, more severe short-term effects of the crash on the purchasing power of the currency of Country T.
The Official Guide for GMAT Review, 10th Edition, 2003

Practice Question
Question No.: CR 42
Page: 509

Originally posted by batliwala on 01 Apr 2004, 06:23.
Last edited by gmat1393 on 14 Dec 2018, 08:18, edited 3 times in total.
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Re: In the aftermath of a worldwide stock-market crash, Country  [#permalink]

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01 Apr 2004, 14:28
D is the most relevant answer and best one.
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Re: In the aftermath of a worldwide stock-market crash, Country  [#permalink]

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02 Apr 2004, 13:38
Wow D seems to be the most popular answer. Add my vote towards D.
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Re: In the aftermath of a worldwide stock-market crash, Country  [#permalink]

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17 Dec 2013, 06:38
Hi

I marked B here for the reason that if the country can identify the date of its next crash, it has identified the reasons for the crash successfully.
Whereas D only tells us to compare the severity of the countries.

Kindly explain.
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Re: In the aftermath of a worldwide stock-market crash, Country  [#permalink]

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02 Apr 2017, 12:14
1
Let's read the question stem first, Question is asking about - would be most useful in an evaluation of Country T's assessment of the causes of the severity of its stock-market crash? - Which means this is an EVALUATE AN ARGUMENT question

Premise:

1. Worldwide Stock market crash
2. In aftermath of worldwide stock-market crash - Country T claimed - Severity of the crash was because of - accelerated process of DENATIONALIZATION many of its industries underwent shortly before the crash.

Conclusion:

DENATIONALIZATION - was the cause of the market crash in country T

As this is a evaluate question, we need to evaluate if Denationalization was the reason for the market crash as claimed by the country T. One of the correct answer choices should give us this option.

(A) Calculating the average loss experienced by individual traders in Country T during the crash
- How would calculating loss by an individual trader answer or evaluate denationalization? Moreover name trader is just used to trap people having some financial background knowledge as they see similar terms and apply their studies or perceived knowledge over here, but remember in CR we need to look only for things which are discussed in this argument and deviate from bringing in our knowledge background to answer the questions. Option A is IRRELEVANT

(B) Using economic theory to predict the most likely date of the next crash in Country T
- Again, how would predicting help us to answer the question - Is denationalization the reason for market crash? - Option B is IRRELEVANT

(C) Comparing the total number of shares sold during the worst days of the crash in Country T to the total number of shares sold in Country T just prior to the crash.
- Total number of shares sold is not going to answer our question - Has denationalization caused the market crash?

(D) Comparing the severity of the crash in Country T to the severity of the crash in countries otherwise economically similar to Country T that have not experienced recent denationalization
- Now, comparing the impact of denationalization between two countries can give us a fair idea of whether denationalization can be the reason for stock-market crash as claimed by the country T - This looks a possible answer, lets check the last remaining answer choice - Option D is the CORRECT answer

(E) Comparing the long-term effects of the crash on the purchasing power of the currency of Country T to the immediate, more severe short-term effects of the crash on the purchasing power of the currency of Country T.
- This option is talking more about the possible steps to be taken post market crash but nowhere talk about the denationalization of companies - Hence, this option is OUT OF SCOPE

Hence, D is the correct answer
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Re: In the aftermath of a worldwide stock-market crash, Country  [#permalink]

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28 Apr 2018, 21:15
Nice question fell for C. The number of shares won't matter, but the severity does. So answer should be D
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Re: In the aftermath of a worldwide stock-market crash, Country  [#permalink]

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29 Apr 2018, 02:08
As one needs to consider whether denationalisation has any impact on crash or not
So need to coNSider the cases where denationalisation has not occurred.

Posted from my mobile device
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Re: In the aftermath of a worldwide stock-market crash, Country  [#permalink]

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16 Dec 2018, 21:51
If any expert can help out,

This question shows us that the decentralization caused the crash

When we look at the answer, can we say that the cause is strengthened when:
i) When cause did not exist event did not happen
ii) Some other cause did not lead to the event
iii) A similar correlation existed ( this is the reasoning used here)

Regards,
Rishav
Re: In the aftermath of a worldwide stock-market crash, Country &nbs [#permalink] 16 Dec 2018, 21:51
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