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# The government provides insurance for individuals’ bank

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Senior CR Moderator
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The government provides insurance for individuals’ bank  [#permalink]

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20 Sep 2017, 02:36
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Difficulty:

15% (low)

Question Stats:

78% (01:46) correct 22% (01:56) wrong based on 312 sessions

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The government provides insurance for individuals’ bank deposits, but requires the banks to pay the premiums for this insurance. Since it is depositors who primarily benefit from the security this insurance provides, the government should take steps to ensure that depositors who want this security bear the cost of it and thus should make depositors pay the premiums for insuring their own accounts.

Which one of the following principles, if established, would do most to justify drawing the conclusion of the argument on the basis of the reasons offered in its support?

(A) The people who stand to benefit from an economic service should always be made to bear the costs of that service.

(B) Any rational system of insurance must base the size of premiums on the degree of risk involved.

(C) Government-backed security for investors, such as bank depositors, should be provided only when it does not reduce incentives for investors to make responsible investments.

(D) The choice of not accepting an offered service should always be available, even if there is no charge for the service.

(E) The government should avoid any actions that might alter the behavior of corporations and individuals in the market.

Source: LSAT

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Re: The government provides insurance for individuals’ bank  [#permalink]

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20 Sep 2017, 04:54
broall wrote:
The government provides insurance for individuals’ bank deposits, but requires the banks to pay the premiums for this insurance. Since it is depositors who primarily benefit from the security this insurance provides, the government should take steps to ensure that depositors who want this security bear the cost of it and thus should make depositors pay the premiums for insuring their own accounts.

Which one of the following principles, if established, would do most to justify drawing the conclusion of the argument on the basis of the reasons offered in its support?

(A) The people who stand to benefit from an economic service should always be made to bear the costs of that service.

(B) Any rational system of insurance must base the size of premiums on the degree of risk involved.

(C) Government-backed security for investors, such as bank depositors, should be provided only when it does not reduce incentives for investors to make responsible investments.

(D) The choice of not accepting an offered service should always be available, even if there is no charge for the service.

(E) The government should avoid any actions that might alter the behavior of corporations and individuals in the market.

Source: LSAT

Will go with Option A .
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The government provides insurance for individuals’ bank  [#permalink]

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19 Nov 2017, 18:38
broall wrote:
The government provides insurance for individuals’ bank deposits, but requires the banks to pay the premiums for this insurance. Since it is depositors who primarily benefit from the security this insurance provides, the government should take steps to ensure that depositors who want this security bear the cost of it and thus should make depositors pay the premiums for insuring their own accounts.

Which one of the following principles, if established, would do most to justify drawing the conclusion of the argument on the basis of the reasons offered in its support?

(A) The people who stand to benefit from an economic service should always be made to bear the costs of that service.

(B) Any rational system of insurance must base the size of premiums on the degree of risk involved.

(C) Government-backed security for investors, such as bank depositors, should be provided only when it does not reduce incentives for investors to make responsible investments.

(D) The choice of not accepting an offered service should always be available, even if there is no charge for the service.

(E) The government should avoid any actions that might alter the behavior of corporations and individuals in the market.

Source: LSAT

Boiled down to A and B.
B is a trap even though B concerns with the concept of risk.
A is better b/c A directly links with the argument. B is too extreme b/c of "any". "Cost" in A actually refers to risks associating with premium benefits.

Finally, this is a LSAT question, and this question is the parallel / application question.
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Re: The government provides insurance for individuals’ bank  [#permalink]

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19 Nov 2017, 20:47
Banks pay for insurance govt gives. Depositors benefit from govt service. Conclusion: Only depositors should pay not banks. Assumption: those who benefit must pay not others.

Target gmat against the odds.
Re: The government provides insurance for individuals’ bank &nbs [#permalink] 19 Nov 2017, 20:47
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# The government provides insurance for individuals’ bank

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