Last visit was: 29 Apr 2026, 12:54 It is currently 29 Apr 2026, 12:54
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
User avatar
Sajjad1994
User avatar
GRE Forum Moderator
Joined: 02 Nov 2016
Last visit: 29 Apr 2026
Posts: 16,777
Own Kudos:
51,975
 [13]
Given Kudos: 6,340
GPA: 3.62
Products:
Posts: 16,777
Kudos: 51,975
 [13]
3
Kudos
Add Kudos
9
Bookmarks
Bookmark this Post
User avatar
Sajjad1994
User avatar
GRE Forum Moderator
Joined: 02 Nov 2016
Last visit: 29 Apr 2026
Posts: 16,777
Own Kudos:
Given Kudos: 6,340
GPA: 3.62
Products:
Posts: 16,777
Kudos: 51,975
Kudos
Add Kudos
Bookmarks
Bookmark this Post
User avatar
Sajjad1994
User avatar
GRE Forum Moderator
Joined: 02 Nov 2016
Last visit: 29 Apr 2026
Posts: 16,777
Own Kudos:
Given Kudos: 6,340
GPA: 3.62
Products:
Posts: 16,777
Kudos: 51,975
Kudos
Add Kudos
Bookmarks
Bookmark this Post
User avatar
Sajjad1994
User avatar
GRE Forum Moderator
Joined: 02 Nov 2016
Last visit: 29 Apr 2026
Posts: 16,777
Own Kudos:
Given Kudos: 6,340
GPA: 3.62
Products:
Posts: 16,777
Kudos: 51,975
Kudos
Add Kudos
Bookmarks
Bookmark this Post
­
Explanation


­
4. In the third paragraph, the author uses a quote by Greenspan to:

Explanation


A. This option suggests that the quote by Greenspan is used to articulate a widely held perspective among economists and commentators. It implies that many people in the field share the belief that openness and transparency are fundamental responsibilities of central banks in a democratic society. The passage indeed supports this idea by stating that "a great many conservative and liberal economists have supported this view."

B. This option implies that the quote provides specific information about a fiscal policy. However, the quote by Greenspan does not pertain to fiscal policy but rather to the conduct and obligations of central banks in terms of transparency and openness.

C. This option suggests that the quote is used to describe the consequences or effects of a particular decision. While Greenspan's statement does touch upon the impact of central bank behavior on society, it primarily emphasizes the principle of openness and transparency rather than detailing the consequences of a specific decision.

D. This option implies that the quote serves to strengthen or support a statement made earlier in the passage. Indeed, the passage discusses the importance of clear communication by central banks, and Greenspan's quote aligns with this broader argument, reinforcing the idea that transparency is essential.

E. This option suggests that the quote provides insight or clarification regarding a particular phenomenon discussed in the passage. However, Greenspan's statement primarily addresses the broader principle of central bank transparency and its importance in a democratic society, rather than explaining a specific phenomenon.

Answer: A­
­
User avatar
Sajjad1994
User avatar
GRE Forum Moderator
Joined: 02 Nov 2016
Last visit: 29 Apr 2026
Posts: 16,777
Own Kudos:
Given Kudos: 6,340
GPA: 3.62
Products:
Posts: 16,777
Kudos: 51,975
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Explanation

­
2. According to the passage, Faust and Scensson would most likely agree with which of the following statements?

Explanation


A. While the passage does argue in favor of clear communication, it primarily emphasizes the importance of clear communication for public understanding, democratic accountability, and shaping policy expectations. Faust and Svensson's work is mentioned in the context of examples where deliberate surprises by central banks might be beneficial. Therefore, while they might agree with the benefits of clear communication, it's not the focus of their work as discussed in the passage.

B. The passage primarily discusses the relevance of public expectations to monetary policy rather than fiscal policy. While it's true that public expectations are important in economic policy, the passage doesn't specifically mention Faust and Svensson's views on fiscal policy. Therefore, there's no direct support for this statement in relation to their work.

C. The passage mentions the liquidity trap and its relevance to policy expectations. However, it does not suggest that the liquidity trap is invalid in current economic thinking. Instead, it emphasizes the importance of considering policy expectations, especially in scenarios like the liquidity trap. There's no indication that Faust and Svensson would agree that the liquidity trap is invalid.

D. This statement aligns with the discussion in the passage about examples from the transparency literature where deliberate surprises by central banks might be beneficial. Faust and Svensson's work is cited in this context, indicating that they would likely agree that there are circumstances where obscuring central bank activities could be appropriate, contrary to conventional views on transparency.

E. The passage discusses the conventional transparency literature and contrasts it with arguments in favor of clear communication. However, it does not suggest that the conventional transparency literature is no longer valid. Faust and Svensson's work is discussed in relation to examples from this literature, indicating that it's still relevant. Therefore, there's no support for the idea that conventional transparency literature is no longer valid.

Answer: D­
­
User avatar
rmahe11
Joined: 13 Oct 2023
Last visit: 15 Aug 2025
Posts: 110
Own Kudos:
Given Kudos: 99
Posts: 110
Kudos: 29
Kudos
Add Kudos
Bookmarks
Bookmark this Post
I feel all the questions in the passage are not framed properly plus it needs better questions
User avatar
Nidhibatra
Joined: 23 Jun 2022
Last visit: 19 Feb 2026
Posts: 31
Own Kudos:
Given Kudos: 290
Posts: 31
Kudos: 7
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Can someone explain the meaning of this RC. The first two paras are not clear

Posted from my mobile device
User avatar
Sajjad1994
User avatar
GRE Forum Moderator
Joined: 02 Nov 2016
Last visit: 29 Apr 2026
Posts: 16,777
Own Kudos:
Given Kudos: 6,340
GPA: 3.62
Products:
Posts: 16,777
Kudos: 51,975
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Nidhibatra
Can someone explain the meaning of this RC. The first two paras are not clear

Posted from my mobile device
­The first two paragraphs suggests that historically, central banks haven't prioritized maximizing public understanding, and there's debate over whether increasing common knowledge always benefits welfare. It also highlights the focus of the transparency literature on when deliberate surprises by central banks are optimal, overlooking arguments for clear communication emphasized by ITF advocates and others.
Moderators:
GMAT Club Verbal Expert
7391 posts
509 posts
363 posts