Events & Promotions
|
|
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
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
May 0510:00 AM PDT
-11:00 AM PDT
GMAT Inequalities is a high-frequency topic in GMAT Quant, but many students struggle because the concepts behave differently from standard algebra. Understanding the right rules, patterns, and edge cases can significantly improve both speed and accuracy.- May 06
08:30 AM PDT
-09:30 AM PDT
In Episode 3 of our GMAT Ninja Critical Reasoning series, we tackle Discrepancy, Paradox, and Explain an Oddity questions. You know the feeling: the passage gives you two facts that seem completely contradictory.... - May 08
08:00 AM PDT
-08:30 AM PDT
Join the special YouTube live-stream for selecting the winners of GMAT Club MBA Scholarships sponsored by Juno live. Watch who gets these coveted MBA scholarships offered by GMAT Club and Juno.
20 Feb 2026, 20:35
Kudos
Bookmarks
Central bank digital currencies (CBDCs) are being introduced as a way to strengthen financial systems by reducing dependence on private banks. Proponents argue that since CBDCs offer a risk-free place to hold funds directly with the government, individuals will shift deposits away from commercial banks, lowering the risk of bank runs during economic crises. Therefore, widespread adoption of CBDCs would enhance overall financial stability.
Which of the following, if true, most seriously undermines the reasoning in the argument above?
A. The majority of CBDC pilot users report satisfaction with transaction speed and digital convenience features.
B. Central banks may restrict CBDC account limits to avoid destabilizing commercial lending markets.
C. Surveys show that in regions with high trust in government institutions, public interest in CBDC adoption has been stronger.
D. Private banks have begun offering real-time payment systems and deposit insurance enhancements to retain their customer base.
E. In countries where CBDC pilots have been launched, many citizens have opted to use them for payments but continue to hold their savings in private banks.
Which of the following, if true, most seriously undermines the reasoning in the argument above?
A. The majority of CBDC pilot users report satisfaction with transaction speed and digital convenience features.
B. Central banks may restrict CBDC account limits to avoid destabilizing commercial lending markets.
C. Surveys show that in regions with high trust in government institutions, public interest in CBDC adoption has been stronger.
D. Private banks have begun offering real-time payment systems and deposit insurance enhancements to retain their customer base.
E. In countries where CBDC pilots have been launched, many citizens have opted to use them for payments but continue to hold their savings in private banks.
20 Feb 2026, 20:35
Kudos
Bookmarks
Official Solution:
Central bank digital currencies (CBDCs) are being introduced as a way to strengthen financial systems by reducing dependence on private banks. Proponents argue that since CBDCs offer a risk-free place to hold funds directly with the government, individuals will shift deposits away from commercial banks, lowering the risk of bank runs during economic crises. Therefore, widespread adoption of CBDCs would enhance overall financial stability.
Which of the following, if true, most seriously undermines the reasoning in the argument above?
A. The majority of CBDC pilot users report satisfaction with transaction speed and digital convenience features.
B. Central banks may restrict CBDC account limits to avoid destabilizing commercial lending markets.
C. Surveys show that in regions with high trust in government institutions, public interest in CBDC adoption has been stronger.
D. Private banks have begun offering real-time payment systems and deposit insurance enhancements to retain their customer base.
E. In countries where CBDC pilots have been launched, many citizens have opted to use them for payments but continue to hold their savings in private banks.
A. The majority of CBDC pilot users report satisfaction with transaction speed and digital convenience features.
This actually supports the idea that people like CBDCs. If anything, it could strengthen the argument by showing adoption might grow.
B. Central banks may restrict CBDC account limits to avoid destabilizing commercial lending markets.
This undermines the argument but in a slightly indirect way. If there are limits, people can’t move large amounts of money out of banks into CBDCs. That would mean the effect on bank runs might be minimal. Seems more speculative, so let's hold for now.
C. Surveys show that in regions with high trust in government institutions, public interest in CBDC adoption has been stronger.
This says interest in CBDCs depends on trust in government. That’s interesting, but it doesn’t actually show whether people will move their deposits or whether stability improves.
D. Private banks have begun offering real-time payment systems and deposit insurance enhancements to retain their customer base.
This shows banks are fighting back to keep deposits, but it doesn’t prove people won’t move their money to CBDCs. It’s a side detail. We’re looking for something that flat-out undercuts the “CBDCs will drain deposits” link.
E. In countries where CBDC pilots have been launched, many citizens have opted to use them for payments but continue to hold their savings in private banks.
The argument hinges on people shifting deposits away from private banks to CBDCs. If, in practice, people just use CBDCs for quick payments but keep their savings in banks, then the whole “less bank runs” logic collapses. This strongly weakens the argument.
Looking at all the options, E seems to be the best answer.
Answer: E
Central bank digital currencies (CBDCs) are being introduced as a way to strengthen financial systems by reducing dependence on private banks. Proponents argue that since CBDCs offer a risk-free place to hold funds directly with the government, individuals will shift deposits away from commercial banks, lowering the risk of bank runs during economic crises. Therefore, widespread adoption of CBDCs would enhance overall financial stability.
Which of the following, if true, most seriously undermines the reasoning in the argument above?
A. The majority of CBDC pilot users report satisfaction with transaction speed and digital convenience features.
B. Central banks may restrict CBDC account limits to avoid destabilizing commercial lending markets.
C. Surveys show that in regions with high trust in government institutions, public interest in CBDC adoption has been stronger.
D. Private banks have begun offering real-time payment systems and deposit insurance enhancements to retain their customer base.
E. In countries where CBDC pilots have been launched, many citizens have opted to use them for payments but continue to hold their savings in private banks.
A. The majority of CBDC pilot users report satisfaction with transaction speed and digital convenience features.
This actually supports the idea that people like CBDCs. If anything, it could strengthen the argument by showing adoption might grow.
B. Central banks may restrict CBDC account limits to avoid destabilizing commercial lending markets.
This undermines the argument but in a slightly indirect way. If there are limits, people can’t move large amounts of money out of banks into CBDCs. That would mean the effect on bank runs might be minimal. Seems more speculative, so let's hold for now.
C. Surveys show that in regions with high trust in government institutions, public interest in CBDC adoption has been stronger.
This says interest in CBDCs depends on trust in government. That’s interesting, but it doesn’t actually show whether people will move their deposits or whether stability improves.
D. Private banks have begun offering real-time payment systems and deposit insurance enhancements to retain their customer base.
This shows banks are fighting back to keep deposits, but it doesn’t prove people won’t move their money to CBDCs. It’s a side detail. We’re looking for something that flat-out undercuts the “CBDCs will drain deposits” link.
E. In countries where CBDC pilots have been launched, many citizens have opted to use them for payments but continue to hold their savings in private banks.
The argument hinges on people shifting deposits away from private banks to CBDCs. If, in practice, people just use CBDCs for quick payments but keep their savings in banks, then the whole “less bank runs” logic collapses. This strongly weakens the argument.
Looking at all the options, E seems to be the best answer.
Answer: E
