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12 May 2025, 01:42
Kudos
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Hi experts KarishmaB GMATNinja DmitryFarber
277. The passage states that traditional studies of the financial market overlook imbalances in the allocation of financial resources because
(A) an optimum allocation of resources is the final result of competition among participants
In question 277, can we say that option A is wrong as there is no such causal relationship given in the passage?
If we look at the relevant lines "Most traditional financial-market analysis studies ignore financial markets' deficiencies in allocation because of analysts' inherent preferences for the simple model of perfect competition.", we don't see anything indicating on:
Competition among participants --> Optimum allocation of resources
Please let me know if my thought process is faltering somewhere.
277. The passage states that traditional studies of the financial market overlook imbalances in the allocation of financial resources because
(A) an optimum allocation of resources is the final result of competition among participants
In question 277, can we say that option A is wrong as there is no such causal relationship given in the passage?
If we look at the relevant lines "Most traditional financial-market analysis studies ignore financial markets' deficiencies in allocation because of analysts' inherent preferences for the simple model of perfect competition.", we don't see anything indicating on:
Competition among participants --> Optimum allocation of resources
Please let me know if my thought process is faltering somewhere.
17 May 2025, 18:54
Kudos
Bookmarks
That's right. The rest of the passage gives us an outline of the kind of complications that prevent "perfect competition" in real life. It's not about the perfect ("optimum") allocation of resources. It's the ability for everyone to compete equally with full access to the necessary resources and information. Since that doesn't exist, academics are oversimplifying the actual situation.
agrasan
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