Despite views that globalization has reached its peak, a period

Question

Despite views that globalization has reached its peak, a period beginning in the nineteenth century and extending into the early twentieth century, in fact, is the interval during which international barriers to trade fell most steeply, as can be seen in the case of price convergence in commodities. The prices of cloves, pepper, and coffee failed to converge between Amsterdam and East Asia or between England and India from as far back as 1580 but began in 1820 to draw closer. Similarly, the difference in wheat prices in the United States and England fell from one hundred percent in the early nineteenth century to negligible levels late in the century and to no difference at all in the early twentieth century. A similar story unfolded during this period for bacon, cotton, and rice.
 
Peter Lindert and Jeffrey Williamson have summarized the price gaps in commodity markets between continents as evolving in three phases. From 1820 to 1914, these gaps fell by 81 percent; they attribute 72 percent of this decline to cheaper transport and 28 percent to trade policies. Second, during the wartime period of 1914 to 1950, the gaps doubled, due to a reversal in trade policies. Finally, from 1950 to 2000, they fell again by 76 percent, ending up 92 percent lower than in 1820, with about four-fifths of the total change attributable to cheaper transport and one-fifth to more favorable trade policies.
 
The question is often articulated in terms of the ratio of total trade volume to the gross domestic product, since commodity price information is not universally available. The values of this ratio in many advanced economies were higher in the mid-1990s than in the early 1900s, but not by much. In Japan, notably, the percentage of GDP for which trade accounted in 1995 was 17 percent, far under its 1910 level of 30 percent, as measured in current prices. Sure enough, the ratios have risen somewhat in other economies over that same time period--by 13 percentage points in United Kingdom, 8 points in France, and from 11 percent to 24 percent in the United States; this latter spike may explain why the attention to globalization has been especially acute in America. These increases, nevertheless, are modest given the fact that the world economy grew roughly twice as quickly in the twentieth century as in the nineteenth.
 
The ratios grow much more dramatically if they are computed in constant prices rather than in current prices, because the prices of goods relative to services fell due to sustained increases in productivity in the sectors producing these goods. Trade has grown most in those sectors in which prices have most fallen, so the proportions of GDP in constant prices have risen more than those in current prices.   1 
 1. The author cites which of the following as a consideration influencing the selection of data that has been presented in the passage?

A. Ease of calculation
B. Wide acceptance
C. Lack of bias
D. Availability
E. Universality

2 
 2. In the passage, the author anticipates which of the following as a possible objection to his argument?

A. The growth of the world economy could be seen as a reason to consider modern price convergence more significant than prior convergence.
B. The methodology to determine the impact of transport and trade policies on commodities prices has not been presented.
C. The ratios of trade volume to gross domestic product might point to a different conclusion if calculated in constant prices.
D. The increases in ratio of trade volume to gross domestic product presented by the argument were not typical for all nations of the world.
E. The argument fails to address whether the globalization of labor is higher today than at the turn of the twentieth century.

3 
 3. According to the passage, which of the following was true of commodities prices from 1950 to 2000?

A. They were brought closer together by favorable trade policies.
B. They were pushed down by cheaper transport.
C. They generated acute attention to globalization in the United States.
D. The gaps in these prices first increased, then decreased.
E. They rose by as much as 13 percent.

4 
 4. The author explicitly cites each of the following as evidence EXCEPT

A. the ratio of total trade volume to gross domestic product
B. price gaps in commodity markets prior to 1820
C. price gaps in commodity markets after 1820
D. the percentage of commodities imported
E. the rate of growth of the world economy

5 
 5. With which of the following statements would the author the passage be most likely to agree?

A. The current level of globalization across advanced economies is low.
B. Throughout the three phases discussed, cheaper transport had a larger effect on the gap in commodities prices than did trade policies.
C. When the difference between commodities prices across markets shrinks suddenly, it can be concluded that international barriers to trade have been lessened or removed.
D. The United States opened its markets more between the mid-1990s and early 1900s than did the United Kingdom.
E. The wars of 1914 to 1950 had no lasting effect on globalization across advanced economies.

6 
 6. The primary purpose of the passage is to

A. outline alternatives to an accepted theory
B. present information that resolves a debate
C. contribute to a theory by introducing new data
D. challenge a widely accepted view
E. further refute an already a discarded theory

Source: GMAT Free

Sajjad1994 · Accepted Answer

Official Explanation

5. With which of the following statements would the author the passage be most likely to agree?

Explanation

In this question, as in any such question, we will not attempt to read the author's mind, but rather choose the statement that is directly supported by the author's statements and maybe even required by the author's statements.  We can discard (A);  while the author may not consider the current level of globalization the highest level, he definitely doesn't consider it low.

On to (B).   This statement seems quite defensible at first, but there is a problem: we are told that cheaper transport had a greater impact in the first and third phases, but it appears to have been trumped by policy in the second phase, and therefore does not have a greater effect throughout the three phases. So (B) is out.

Choice (C)  makes a statement that may sound arbitrary, but we might find that it's required by the argument. Indeed, right in the first sentence, the author says that  "international barriers to trade fell most steeply, as can be seen in the case of price convergence in commodities" (lines 3-5) . For this statement to be true, the statement in  choice (C) must be true. Choice (C)  will be our answer.

Choice (D)  is inaccurate, because the UK's ratio changed by 13 points and the United States' by 12.

Choice (E)  makes a claim that is implausible and not supported by the passage; the fact that commodities gaps were closed again and that barriers fell again doesn't mean that globalization, which has not been defined to be limited to those factors, didn't have other lasting effects.

The correct answer is (C).

Hope it helps

KarishmaB · Answer

The first sentence gives you the answer:

"Despite  views that globalization has reached its peak, a period beginning in the nineteenth century and extending into the early twentieth century,  in fact,  is the interval during which international barriers to trade fell most steeply,"

The current view is that globalisation has reached its peak now but the author is saying that actually, early 1800s to early 1900s is the time when international barriers to trade fell most (so economy opened up most). Then he/she goes on to prove this using data.

Hence (D) is correct.

Sajjad1994 · Answer

Official Explanation

2. In the passage, the author anticipates which of the following as a possible objection to his argument?

Explanation

The question asks which objections the author forestalls. In the natural course of communication, forestalling objections tends to happen during the course of making an argument, in little bits, and then in big chunks after the author has made his point. The last paragraph, for example, can be thought of as forestalling the possible objection that the trade volume ratio should not have been calculated in current prices and should have been calculated in constant prices, for whatever reason. Looking for that, we find answer  choice (C) , which is therefore a good candidate for the correct answer.

Choices (B), (D), and (E)  present objections to the argument that may be worthy and which the author has not addressed.

Choice (A)  sounds like something the author might have said, so we can go looking for it.The author says,  "These increases, nevertheless, are modest given the fact that the world economy grew roughly twice as quickly in the twentieth century as in the nineteenth."  The author discusses the growth of the world economy, but he is not addressing the objection stated in  (A) . The author is saying that, given the growth, the values are not very big. The objection states that, given the growth, the smaller values have a greater significance--they count for more, in a sense. Therefore, the author hasn't addressed  (A).

The correct answer is (C).

Hope it helps

Sajjad1994 · Answer

Official Explanation

3. According to the passage, which of the following was true of commodities prices from 1950 to 2000?

Explanation

This question addresses a specific window of time, one that seems to correspond to third of the three  "phases"  discussed in the  second paragraph . Going back to that paragraph, we confirm what the author has to say about this period: the price gaps in commodities markets fell again (since the world war period was over) by 76 percent, due mostly to cheaper transport and partly to favorable trade policies. Let's see which answer choices are consistent with these statements.  Choice (A) is correct.

Choice (B)  is a distortion, because it's the price gaps that were made smaller, not the prices themselves; some prices probably went up as the gaps shrunk.

Choice (C)  might be plausible, but it has no support in the passage.

Choice (D)  is inaccurate, since we are talking about just the third phase, not overall.

Choice (E)  is out of place, because that figure refers to a different comparison in time, in the next paragraph.

The correct answer is (A).

Hope it helps

Sajjad1994 · Answer

Official Explanation

1. The author cites which of the following as a consideration influencing the selection of data that has been presented in the passage?

Explanation

This question goes after a consideration not much discussed by the author, which is why certain data was presented in the passage. The author does say, however, that,  "The question is often articulated in terms of the ratio of total trade volume to the gross domestic product, since commodity price information is not universally available"  (lines 23-25). By implication, commodities prices would have been used if they had been available, and the trade volume ratio was used instead because it was available.

Therefore, the correct answer is (D).

Hope it helps

Sajjad1994 · Answer

Official Explanation

6. The primary purpose of the passage is to

Explanation

In this question, we can formulate an answer before looking at the choices, even if our prediction is inexact: the author makes a claim, one which is contrary to a common conception, and then he presents data to support that claim. Turning to the answer choices, we find that  (D) is appropriate , since he is  "refuting."  He doesn't propose more than one interpretation, so  (A)  is out. And he is challenging a view, not resolving an argument, so  (B)  is out. We have no sense that the data he presents are new, or that the theory he challenges is discarded, so  (C) and (E)  are out.

The correct answer is (D).

Hope it helps

Harsh2111s · Answer

VeritasKarishma   GMATNinja 
Nowhere in the passage i felt that author is challenging any view,instead author explains how below statement is true in whole passage.
"a period beginning in the nineteenth century and extending into the early twentieth century, in fact, is the interval during which international barriers to trade fell most steeply, as can be seen in the case of price convergence in commodities".

If D is true what's the view he is challenging?
Please explain option D.

VerbalBot · Answer

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Despite views that globalization has reached its peak, a period

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Despite views that globalization has reached its peak, a period

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