GMAT Question of the Day - Daily to your Mailbox; hard ones only

It is currently 24 Aug 2019, 00:41

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

The government provides insurance for individuals' bank deposits

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
Manager
Manager
avatar
S
Joined: 29 May 2016
Posts: 65
Location: United States
Concentration: Finance, Strategy
GPA: 3.93
WE: Corporate Finance (Investment Banking)
Premium Member
The government provides insurance for individuals' bank deposits  [#permalink]

Show Tags

New post 11 Aug 2019, 01:12
00:00
A
B
C
D
E

Difficulty:

  55% (hard)

Question Stats:

83% (01:46) correct 17% (02:22) wrong based on 6 sessions

HideShow timer Statistics

The government provides insurance for individuals' bank deposits, but requires the banks to pay the premiums for the 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: PrepTest 7, February 1993 LSAT, Section 4, Question 5
Math Expert
User avatar
V
Joined: 02 Sep 2009
Posts: 57281
Re: The government provides insurance for individuals' bank deposits  [#permalink]

Show Tags

New post 11 Aug 2019, 03:01
Xin Cho wrote:
The government provides insurance for individuals' bank deposits, but requires the banks to pay the premiums for the 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: PrepTest 7, February 1993 LSAT, Section 4, Question 5


Please search before posting: https://gmatclub.com/forum/the-governme ... fl=similar
_________________
GMAT Club Bot
Re: The government provides insurance for individuals' bank deposits   [#permalink] 11 Aug 2019, 03:01
Display posts from previous: Sort by

The government provides insurance for individuals' bank deposits

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  





Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne