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# It comes as no surprise that there is little consensus among economist

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Re: It comes as no surprise that there is little consensus among economist [#permalink]
can anyone explain Question 3 and 9 please?
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Re: It comes as no surprise that there is little consensus among economist [#permalink]
Hi,

Can someone please explain question 3 and question 8?
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Re: It comes as no surprise that there is little consensus among economist [#permalink]
4
Kudos
Para 1-Prospects of ECB - Optimists and pessimists
Para 2- Valid point of pessimists and why they think so
Para 3- Price difference within the regions
Para 4- Situation before and now after the introduction of Euro
Para 5- all is not lost - ECB might still succeed if...

Interesting passage. Took 13 mins in total, including 4 mins to read. All correct.

1. The primary purpose of the passage is to
C. provide support for the theory that Europe's transition to a central bank will have many obstacles - Correct - the author cites the obstacles - by giving the reasons why pessimists believe that ECB will fail

2. in the passage, the author is primarily concerned with which of the following?
D. describing a problem that will not be solved easily - Correct
while others are convinced that cultural differences and inevitable squabbles over monetary policy doom the central bank to failure.

As long as the lines of communication remain open and country representatives keep an open mind toward what may become a radical overhaul within European commerce. the euro and the ECB have a fighting chance to survive.

3. Which of the following best describes the organization of the passage?
A. Two historical backgrounds are compared and contrasted. - Incorrect
B. A problem is identified. discussed, and resolved. - Incorrect - the author explains the viewpoint of pessimists and still has some hope(last para). There is no resolution here .
C. A theory is discussed. and evidence is introduced to condemn it. - Incorrect - author does not condemn any theory
D. A paradox is described. and one side is shown to be more dominant than the other. - Incorrect - there is no paradox here
E. A debate is introduced, and supporting evidence for both sides is presented. - Correct - Though the author gives more weightage to pessimists thoughts

4. Which of the following best describes the relation of the last paragraph to the passage as a whole?
C. It adds some positive points to an otherwise negative outlook. - Correct
As long as the lines of communication remain open and country representatives keep an open mind toward what may become a radical overhaul within European commerce. the euro and the ECB have a fighting chance to survive.

5. The author‘s attitude toward the success of the ECB can best be described as
C. skepticism - Correct

As long as the lines of communication remain open and country representatives keep an open mind toward what may become a radical overhaul within European commerce. the euro and the ECB have a fighting chance to survive.

6. The author most probably mentions the Bundesbank in order to

D. indicate that there are other established fiscal entities for the ECB to emulate - Correct - there are two extraordinary financial models to study and replicate

7. The passage most clearly implies which of the following?

A. Countries whose economies are depressed by the price wars following the arrival of the euro will eventually rebound and prosper. - Irrelevant
B. The average German or Italian has more disposable income than does the average Portuguese or Spaniard. - Incorrect - we know that the average Portuguese or Spaniard is below the European average but we are given no information about German or Italian
C. Were it not for the Maastricht treaty. the ECB would never have come about. - Incorrect
D. The arrival of the euro has not solved the problem of price disparity in Europe. - Correct
Until now, Europe's different currencies have done well to divert consumers' attention from these price differentials. But now that Europe has adopted its one currency. the euro, Europeans are more likely to seek out the best price regardless of geography
E. The governing council may have to alter its plan of equal representation to account for the contributions of each country to Europe’s overall gross domestic product. - Incorrect

8. The passage suggests that the author believes which of the following?

A. Stabilizing the euro within global currency markets is the first step toward its legitimacy as a viable saving vehicle. - Incorrect - Price stability within the region is the primary goal of ECB ; It need not be the first step toward its legitimacy as a viable saving vehicle
The ECB's primary goal, as specified by the Maastricht treaty, is to bring about price stability within its area of sovereignty.
B. The cultures of the various European countries will begin to grow together soon after the euro completely supplants all the separate currencies that are now in use. - Irrelevant
C. Multiple factors will prevent price stability from happening anytime soon, and it probably won't happen at all. - Correct - the author is skeptical about the success of Euro and ECB but still has a little hope
D. The Bundesbank should assume all financial responsibilities for the European Union until the ECB becomes fully operational. - Incorrect - Bundesbank is one of the two extraordinary financial models to study and replicate
E. The gross domestic product of a nation should determine the number of delegates that nation sends to the ECB's governing council. - Incorrect

9. Which of the following, if true, would most clearly weaken the chances of the ECB's survival?

A. Federal Reserve Board governors have no experience with having to reconcile various languages and cultures into their financial policies. - Correct

Fortunately for the ECB‘s architects, there are two extraordinary financial models to study and replicate: the German Bundesbank and America‘s Federal Reserve Board. --> One of these models have worked in situation that is different from ECB's. So, there is a high probability that the Fed reserve model may not work in Europe.

B. The prices for most cosmetics in Belgium and The Netherlands are virtually identical. - Incorrect
C. Some of the legislation that is necessary for price reform will take years to put into effect. - Incorrect - but it still is possible
D. As prices fall in Russia. which is not part of the European Union, commercial entities in Europe will buy Russian raw materials in larger quantities.- Incorrect
E. The term of service for each member of the ECB's governing board is only three years. - Irrelevant

gempony wrote:
can anyone explain Question 3 and 9 please?

Aayush9093 wrote:
Hi,

Can someone please explain question 3 and question 8?

Hi gempony , Aayush9093 - hope this helps!!
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It comes as no surprise that there is little consensus among economist [#permalink]
Skywalker18 wrote:
Para 1-Prospects of ECB - Optimists and pessimists
Para 2- Valid point of pessimists and why they think so
Para 3- Price difference within the regions
Para 4- Situation before and now after the introduction of Euro
Para 5- all is not lost - ECB might still succeed if...

Interesting passage. Took 13 mins in total, including 4 mins to read. All correct.

1. The primary purpose of the passage is to
C. provide support for the theory that Europe's transition to a central bank will have many obstacles - Correct - the author cites the obstacles - by giving the reasons why pessimists believe that ECB will fail

2. in the passage, the author is primarily concerned with which of the following?
D. describing a problem that will not be solved easily - Correct
while others are convinced that cultural differences and inevitable squabbles over monetary policy doom the central bank to failure.

As long as the lines of communication remain open and country representatives keep an open mind toward what may become a radical overhaul within European commerce. the euro and the ECB have a fighting chance to survive.

3. Which of the following best describes the organization of the passage?
A. Two historical backgrounds are compared and contrasted. - Incorrect
B. A problem is identified. discussed, and resolved. - Incorrect - the author explains the viewpoint of pessimists and still has some hope(last para). There is no resolution here .
C. A theory is discussed. and evidence is introduced to condemn it. - Incorrect - author does not condemn any theory
D. A paradox is described. and one side is shown to be more dominant than the other. - Incorrect - there is no paradox here
E. A debate is introduced, and supporting evidence for both sides is presented. - Correct - Though the author gives more weightage to pessimists thoughts

4. Which of the following best describes the relation of the last paragraph to the passage as a whole?
C. It adds some positive points to an otherwise negative outlook. - Correct
As long as the lines of communication remain open and country representatives keep an open mind toward what may become a radical overhaul within European commerce. the euro and the ECB have a fighting chance to survive.

5. The author‘s attitude toward the success of the ECB can best be described as
C. skepticism - Correct

As long as the lines of communication remain open and country representatives keep an open mind toward what may become a radical overhaul within European commerce. the euro and the ECB have a fighting chance to survive.

6. The author most probably mentions the Bundesbank in order to

D. indicate that there are other established fiscal entities for the ECB to emulate - Correct - there are two extraordinary financial models to study and replicate

7. The passage most clearly implies which of the following?

A. Countries whose economies are depressed by the price wars following the arrival of the euro will eventually rebound and prosper. - Irrelevant
B. The average German or Italian has more disposable income than does the average Portuguese or Spaniard. - Incorrect - we know that the average Portuguese or Spaniard is below the European average but we are given no information about German or Italian
C. Were it not for the Maastricht treaty. the ECB would never have come about. - Incorrect
D. The arrival of the euro has not solved the problem of price disparity in Europe. - Correct
Until now, Europe's different currencies have done well to divert consumers' attention from these price differentials. But now that Europe has adopted its one currency. the euro, Europeans are more likely to seek out the best price regardless of geography
E. The governing council may have to alter its plan of equal representation to account for the contributions of each country to Europe’s overall gross domestic product. - Incorrect

8. The passage suggests that the author believes which of the following?

A. Stabilizing the euro within global currency markets is the first step toward its legitimacy as a viable saving vehicle. - Incorrect - Price stability within the region is the primary goal of ECB ; It need not be the first step toward its legitimacy as a viable saving vehicle
The ECB's primary goal, as specified by the Maastricht treaty, is to bring about price stability within its area of sovereignty.
B. The cultures of the various European countries will begin to grow together soon after the euro completely supplants all the separate currencies that are now in use. - Irrelevant
C. Multiple factors will prevent price stability from happening anytime soon, and it probably won't happen at all. - Correct - the author is skeptical about the success of Euro and ECB but still has a little hope
D. The Bundesbank should assume all financial responsibilities for the European Union until the ECB becomes fully operational. - Incorrect - Bundesbank is one of the two extraordinary financial models to study and replicate
E. The gross domestic product of a nation should determine the number of delegates that nation sends to the ECB's governing council. - Incorrect

9. Which of the following, if true, would most clearly weaken the chances of the ECB's survival?

A. Federal Reserve Board governors have no experience with having to reconcile various languages and cultures into their financial policies. - Correct

Fortunately for the ECB‘s architects, there are two extraordinary financial models to study and replicate: the German Bundesbank and America‘s Federal Reserve Board. --> One of these models have worked in situation that is different from ECB's. So, there is a high probability that the Fed reserve model may not work in Europe.

B. The prices for most cosmetics in Belgium and The Netherlands are virtually identical. - Incorrect
C. Some of the legislation that is necessary for price reform will take years to put into effect. - Incorrect - but it still is possible
D. As prices fall in Russia. which is not part of the European Union, commercial entities in Europe will buy Russian raw materials in larger quantities.- Incorrect
E. The term of service for each member of the ECB's governing board is only three years. - Irrelevant

gempony wrote:
can anyone explain Question 3 and 9 please?

Aayush9093 wrote:
Hi,

Can someone please explain question 3 and question 8?

Hi gempony , Aayush9093 - hope this helps!!

Hi Skywalker18
Would you mind explaining Q9 in detail please? Also, why is (C) incorrect?

Regards.
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Re: It comes as no surprise that there is little consensus among economist [#permalink]
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Re: It comes as no surprise that there is little consensus among economist [#permalink]
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