Federal efforts to aid minority businesses began in the 1960

Question

Federal efforts to aid minority businesses began in the 1960’s when the Small Business Administration (SBA) began making federally guaranteed loans and government-sponsored management and technical assistance available to minority business enterprises. While this program enabled many minority entrepreneurs to form new businesses, the results were disappointing, since managerial inexperience, unfavorable locations, and capital shortages led to high failure rates. Even 15 years after the program was implemented, minority business receipts were not quite two percent of the national economy’s total receipts.

Which of the following statements about the SBA program can be inferred from the passage?

Which of the following statements about the SBA program can be inferred from the passage?

a) The maximum term for loans made to recipient businesses was 15 years.

b) Business loans were considered to be more useful to recipient businesses than was management and technical assistance.

c) The anticipated failure rate for recipient businesses was significantly lower than the rate that actually resulted.

d) Recipient businesses were encouraged to relocate to areas more favorable for business development.

e) The capitalization needs of recipient businesses were assessed and then provided for adequately.

This question is extracted from this RC question:  LINK

avinashrao9 · Answer

IMO its C.

A) SBA analyses the situation after 15 years but the passage never said 15 years is the limit
B) SBA provides loans but it is not mentioned for which category, importance is given
C) SBA anticipated failure rate to be less because of all facilities provided but ended up disappointing as not even 2% were successful (CORRECT)
D) Passage never talks about encouragement of new locations and also clearly says one of the reason for failure is unfavourable location
E) Not mentioned in the passage.

getgyan · Answer

+1 C

It is an “Inference” type

a) The maximum term for loans made to recipient businesses was 15 years. (We cannot infer this as nothing is given about term loans, eliminate)
b) Business loans were considered to be more useful to recipient businesses than was management and technical assistance. (We cannot be sure as technical assistance was provided too, eliminate)
c) The anticipated failure rate for recipient businesses was significantly lower than the rate that actually resulted. (This is our answer as it is mentioned that managerial inexperience, unfavorable locations, and capital shortages led to high failure rates)
d) Recipient businesses were encouraged to relocate to areas more favorable for business development. (There is no mention is the premise about encouragement provided to relocate)
e) The capitalization needs of recipient businesses were assessed and then provided for adequately. (We cannot say this for sure as there is no mention of the same in the premise)

:-D

niki128 · Answer

it's C besause, the argument said: the results were disappointing, which means that "The anticipated failure rate for recipient businesses was significantly lower than the rate that actually resulted"

w1ck3d64 · Answer

thanks for the explanations, i thought it was B but it was not specific as avinashrao9 mentioned. I always try to think outside the box but always get it wrong. I think i need to focus more on the more obvious answers.

w1ck3d64 · Answer

thanks for the explanations, i thought it was B but it was not specific as avinashrao9 mentioned. I always try to think outside the box but always get it wrong. I think i need to focus more on the more obvious answers.

chesstitans · Answer

this question comes from gmatpill, a reliable gmat source. Nevertheless, this question looks like a conclusion question which is extremely rare in gmat. I am still unconvinced that C is the inference that ones can draw from the argument even though C is quite s solid answer.

Ones cannot tell whether the failure rate is high or low based on the information that "the result is disappointing". To me, this question is likely to come from a RC passage.

Crytiocanalyst · Answer

a) The maximum term for loans made to recipient businesses was 15 years.
The end date and current date of the publishing data of the report is not reported therefore we cannot definitely decide therefore out

b) Business loans were considered to be more useful to recipient businesses than was management and technical assistance.
This is not explicitly and cannot be infered anywhere therefore out

c) The anticipated failure rate for recipient businesses was significantly lower than the rate that actually resulted.
This is the only inference that can be infered even though it's not expicitly stated

d) Recipient businesses were encouraged to relocate to areas more favorable for business development.
The passage only states that the buisness were conducted in unfavourable places nowhere is it staed that any external source advised them to locate to a favourable location

e) The capitalization needs of recipient businesses were assessed and then provided for adequately.
This is not the case since it's stated that the companies faced severe capital shortages

therefore IMO C

VerbalBot · Answer

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Federal efforts to aid minority businesses began in the 1960

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Federal efforts to aid minority businesses began in the 1960

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