Housing is one of the most effective ways to stimulate the economy. To stimulate housing, the Federal Reserve
lowered the interest rates for mortgages with the aim of making mortgages more affordable. While this stimulus
did lead to increased housing purchases initially, it eventually led to home price inflation, making homes quite
unaffordable for first time buyers.
Which of the following conclusions about first time buyers is best supported by the passage?
A: The stimulus did not improve the economic condition of most first time home buyers enough to absorb the rise
in home prices
B: Apartment prices went up due to increasing demand from first time home buyers
C: Other than first time home buyers, all other buyers in the housing market were able to make use of the low
income rates and purchase houses at a price lower than they would have paid had the stimulus not been put
into effect.
D: More and more college students started living with their parents longer
E: more and more jobs were created due to the stimulus
This is a conclusion question, so the answer should pass the "fact Test".
Housing is one of the most effective ways to stimulate the economy. is author opinion. rest everything
the Federal Reserve
lowered the interest rates for mortgages with the aim of making mortgages more affordable. While this stimulus
did lead to increased housing purchases initially, it eventually led to home price inflation, making homes quite
unaffordable for first time buyers. is a fact set.
In Conclusion question, it is important to remember that any statement that does not pass the "fact test" will always be wrong.
Never pick a answer that is giving an opinion or suggestion.
Stay very close to the argument. The right answer will always pass the fact test.
Most of the answer options would be "could be true" , it is very important that you identify these choices and what is more important is to answer them directly from what is given in the argument, rather than using your own knowledge to determine the possibility.
lastly remember, we need to prove the
Validity not the
possibility of a statement.
A: The stimulus did not improve the economic condition of most first time home buyers enough to absorb the rise
in home prices ----
If the stimulus made the houses unaffordable for the first time buyers then it can be inferred that before the stimulus it was difficult for first time buyers to afford mortgage and if after elevating the interest rate for the mortgage it became impossible. Then surely The stimulus did not improve the economic condition of most first time home buyers enough to absorb the rise
in home pricesB: Apartment prices went up due to increasing demand from first time home buyers --
The argument does not mention that there was an increase in demand from first time buyer. It only mention that the stimulus made homes unaffordable for first time buyers. C: Other than first time home buyers, all other buyers in the housing market were able to make use of the low
income rates and purchase houses at a price lower than they would have paid had the stimulus not been put
into effect. ---
Way too much of an inference, it could be true but the argument does not provide me any information to validate the "other than first time home buyers". It fails the fact test.D: More and more college students started living with their parents longer --- This again strengthen the argument that there was indeed some problem with the economy. But at the best we do not know anything. Remember we are only looking for something that is mentioned in the argument and which will pass out fact test.
E: more and more jobs were created due to the stimulus ----
Good, it would definitely helps economy. But we are no concerned about what other factors helped to stimulate the economy. Remember in Conclusion question, never pick a choice which makes a suggestion or give an opinion or gives you a another parallel premise. it will strengthen the argument.