Federally imposed restrictions on how much they may pay small savers h

Federally imposed restrictions on how much they may pay small savers has made difficulties for savings banks as they are competing with such unregulated investment vehicles as money market certificates.

Analyzing the meaning of the sentence reveals that restrictions (plural) have (plural) made it difficult for banks to compete and also gives an example of a type of competition.
Since subject restrictions is plural verb has to be plural, eliminate options A & B for S-V error.
Such as is used to give examples, therefore, eliminate option C
Only deal breaker for me between D & E is use of they in E which gives ambiguity. Therefore, IMO D is the answer.

In option D and E, what does 'it' refer to? I eliminated these options as I was unsure of this reference

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In option D, the it refers to "to compete..."

The it in option E doesn't really refer to anything in the sentence.

what does it refers to ?in the above post

It has been used here as a placeholder . read more from our GMAT SC Guru daagh

https://gmatclub.com/forum/placeholder- ... ml#p905757

Hi aaggarwal191, in option D, it refers to the phrase to compete with such unregulated investment vehicles as money market certificates.

This is one of the cases where the pronoun (it) is used before the antecedent.

p.s. Our book EducationAisle Sentence Correction Nirvana discusses pronoun use before the antecedent, its application and examples in significant detail. If you or someone is interested, PM me your email-id; I can mail the corresponding section.

The right answer to this question should be D. As with all SC questions (and Verbal Qs on the GMAT in general), the ideal strat to follow is to eliminate the answers that don't work until you're left with the right one.

Options A & B - The first toss up is between 'has' and 'have'. Well, what has/have made things difficult? It is the restrictions, which are plural. Hence, the use of 'has' in A and B is incorrect. OUT

Option C - At first glance, the "it" in D and E seems kind of incorrect, because what noun is it replacing? However, the pronoun 'it' can be used as a placeholder pronoun to describe the general state of things(Eg - It rained today). In fact, for this sentence, the usage of 'it' is actually the optimal way to go, since things in general have been made difficult. It is not difficulties themselves that have been made, and this is why C is incorrect. OUT

Option E - D and E don't have much in between them, but what difference exists is actually very significant. E says that "the restrictions have made it difficult for savings banks as a whole because they have to compete". But, this is NOT the intended meaning. The difficulty created is specific to the action of competing. Hence, D's construction of "have made it difficult to compete" captures the meaning far better. Therefore, E is OUT.

Hence, D is the right answer.

Always remember to eliminate to arrive at the correct answer, and only eliminate an option when you're sure it is wrong. This will help improve your overall accuracy!

- Matoo

If you felt that this was useful, be sure to hit me up with a Kudos!

Here's the official explanation provided by the GMAC for this question:

This sentence refers to a difficulty (or difficulties) that savings banks face as a result of federal restrictions. The original version suggests that there may be some relationship between the difficulties and the fact that the banks compete with unregulated investment vehicles. However, this wording is uninformative and puzzling in that it does not clearly indicate what the difficulties are or why they are mentioned in relation to the competition. Furthermore, the singular verb has does not agree with the plural subject restrictions.

Option A: The singular verb has does not agree with the plural subject restrictions. The wording is indirect and ambiguous. It could beintended to mean that the restrictions have made it difficult for savings banks to compete with the unregulated investment vehicles or that the restrictions have caused some unspecified difficulties for the savings banks. On either interpretation, with this wording, as can have two different meanings: during the time that or because.

Option B: The singular verb has does not agree with the plural subject restrictions. The wording does not clearly indicate whether the difficulties are related to the banks' competition with unregulated investment vehicles.

Option C: This wording is indirect and ambiguous. It could be intended to mean that the restrictions have made it difficult for savings banks to compete with the unregulated investment vehicles or that the restrictions have caused some unspecified difficulties for the savings banks. On either interpretation, with this wording, as can have two different meanings: during the time that or because.

Option D: Correct. The verbs all agree with their subjects. The wording is clear, concise, and direct and uses the correct idiomatic form make it difficult for X to do Y.

Option E: This wording is indirect and ambiguous. It could be intended to mean that the restrictions have made it difficult for savings banks to compete with the unregulated investment vehicles or that the restrictions have caused some unspecified difficulties for the savings banks. On either interpretation, with this wording, as can have two different meanings: during the time that or because.

The correct answer is D.

Please note that I'm not the author of this explanation. I'm just posting it here since I believe it can help the community.

Hello AjiteshArun,
I was wondering whether you could help me with the following issue,
Correct me if I'm wrong, isn't the "it" in answer choice D called expletive it?, so

this one,
Federally imposed restrictions on how much they may pay small savers have made it difficult for savings banks to compete with such unregulated investment vehicles as money market certificates.

could be also written like this, by removing "it" and placing the actual thing that "it" replaces
Federally imposed restrictions on how much they may pay small savers have made to compete with such unregulated investment vehicles as money market certificates difficult for saving banks

My question is the following, when we want to test what "it" refers to , and we replace it with the phrase , should it make grammatical sense except for meaning? What I mean is, "Federally imposed restrictions on how much they may pay small savers have made to compete with such unregulated" I think this is not grammatically correct (the correct should be competing with such unregulated... right?) , however the reason we accept it is because meaning wise it makes sense even if it is not grammatically perfect when we try to replace "it"?

Hi UNSTOPPABLE12,

Here is a very short example:
1. He found RC difficult.

(1) is straightforward. It is ~ "he found {something} difficult".

2. He found it difficult to stop reading the passage.

In (2), he again found {something} difficult. But what exactly did he find difficult? "To stop reading the passage".

The reason we go for (1) with a simple noun like RC but switch to (2) for a more complicated ("heavy") thought like to stop reading the passage is that (generally) it is easier to understand something that is "right-shifted" (I don't remember the exact name for the process). For example, in the previous sentence, I went with "it is easier to understand something that is 'right-shifted'" instead of "to understand something that is 'right-shifted' is easier". The final point here is that choosing to shift a "heavy" component of the sentence to the right is not always a question of making something easier to understand. In some cases, it is mandatory. This is why you may feel that switching the "heavy" component to the left results in a sentence that doesn't sound good (because (a) it usually doesn't, and (b) in some cases, it isn't possible).

I'm not aware of any simple way to decide when it is okay to not use an it to move something to the right, so more opinions on this would be welcome.

what is it referring to in option D .also if in meaning wise in option c imposed restriction have made difficulties why it is wrong

The pronoun "it" in (D) doesn't really refer to anything, making it a non-referential pronoun. Non-referential pronouns are somewhat rare on the GMAT, but we have seen them in a handful of correct OAs. (For more on that, check out this post.)

As for (C), the meaning of the "as" is a bit confusing. Does it mean "while"? As in, "restrictions have made difficulties for savings banks while they are competing..."? If so, it would seem to suggest that the difficulties only arise WHILE the banks are competing with unregulated investment vehicles.

Or does the "as" mean "because"? If so, it would suggest that "restrictions have made difficulties for savings banks because they are competing...".

These two interpretations have completely different meanings. That's not necessarily a deal-breaker, but the meaning is much clearer in choice (D) and isn't really open to interpretation.

Also, (C) introduces another an extra, somewhat confusing pronoun ("they"). So you could argue that both (C) and (D) have one confusing pronoun. The meaning/clarity issue is a much bigger factor.

I hope that helps!