It is currently 16 Oct 2017, 19:12

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

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Verbal Diagnostic Test No : 6 – CR Q No: 2

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

3 KUDOS received
Retired Moderator
User avatar
P
Status: worked for Kaplan's associates, but now on my own, free and flying
Joined: 19 Feb 2007
Posts: 4290

Kudos [?]: 7867 [3], given: 363

Location: India
WE: Education (Education)
Verbal Diagnostic Test No : 6 – CR Q No: 2 [#permalink]

Show Tags

New post 13 Mar 2014, 10:18
3
This post received
KUDOS
6
This post was
BOOKMARKED
00:00
A
B
C
D
E

Difficulty:

  95% (hard)

Question Stats:

38% (01:54) correct 62% (02:02) wrong based on 232 sessions

HideShow timer Statistics

The Central Banks mostly depend upon tinkering with interest rates for regulating the money supply and thereby inflation, momentarily ignoring the importance of growth and judicious supply of goods. They also cite rapid ballooning of the money supply and black money because of globalization as reasons for inclining toward interest rate cuts as the chief tools for smoothening a dented economy

Which of the following, if true, most weakens the argument above?

A: Economists across the world have proposed that in the near medium term the rate cuts will minimize the fiscal deficit than do higher exports.
B: Greenspan used effective rate- management for the successful re-vitalisation of the US economy
C: Franklin Roosevelt indulged in massive growth orientation of the economics even though he burdened the country with massive debts, but still pulled the country out of woods
D: Rate manoeuvres have an instant impact and rattle many vital sectors of the economy
E: Central Banks silently adhere to the politics of the governments rather than follow principles of Economics these days

[Reveal] Spoiler:
OA: C
OE:
A: Near medium term is out of scope.
B: This is a strengthener
C: Correct answer; This precedence helps to deny the effectual impact of rate cuts in buttressing a lame economy
D: This is a strengthener
E: Out of scope
[Reveal] Spoiler: OA

_________________

“Better than a thousand days of diligent study is one day with a great teacher” – a Japanese proverb.
9884544509

Kudos [?]: 7867 [3], given: 363

Economist GMAT Tutor Discount CodesEMPOWERgmat Discount CodesVeritas Prep GMAT Discount Codes
Senior Manager
Senior Manager
avatar
Joined: 15 Sep 2011
Posts: 358

Kudos [?]: 403 [0], given: 45

Location: United States
WE: Corporate Finance (Manufacturing)
GMAT ToolKit User
Re: Verbal Diagnostic Test No : 6 – CR Q No: 2 [#permalink]

Show Tags

New post 13 Mar 2014, 18:14
A weaken statement attacks any part of the argument. The conclusion is "inclining toward interest rate cuts as the chief tools for smoothening a dented economy." If central banks adhere differently, then interest rate cuts are not the chief tools for smoothing an economy, but politicizing. Furthermore, interest rate cuts are synonymous to massive growth orientation because both are expansionary policies, thereby strengthening the argument in general. Respectfully speaking, if a weakening argument were made from a precedent, at least detail the move by Volcker's Federal Reserve in which they raised rates in order to restore a lame economy. IMO E.

Kudos [?]: 403 [0], given: 45

Senior Manager
Senior Manager
avatar
Joined: 12 Mar 2010
Posts: 357

Kudos [?]: 270 [0], given: 87

Concentration: Marketing, Entrepreneurship
GMAT 1: 680 Q49 V34
Re: Verbal Diagnostic Test No : 6 – CR Q No: 2 [#permalink]

Show Tags

New post 13 Mar 2014, 23:04
I was stuck between C and D, and I chose D over C.

Can somebody explain why is D wrong?

Kudos [?]: 270 [0], given: 87

GMAT Club Legend
GMAT Club Legend
User avatar
Joined: 01 Oct 2013
Posts: 10144

Kudos [?]: 261 [0], given: 0

Premium Member
Re: Verbal Diagnostic Test No : 6 – CR Q No: 2 [#permalink]

Show Tags

New post 04 Sep 2015, 07:25
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.

Kudos [?]: 261 [0], given: 0

Manager
Manager
avatar
B
Joined: 14 Jul 2014
Posts: 191

Kudos [?]: 19 [0], given: 110

Location: United States
GMAT 1: 600 Q48 V27
GMAT 2: 720 Q50 V37
GPA: 3.2
Reviews Badge
Re: Verbal Diagnostic Test No : 6 – CR Q No: 2 [#permalink]

Show Tags

New post 26 Oct 2015, 09:13
Picked D. Not sure how C helps weaken.

Kudos [?]: 19 [0], given: 110

2 KUDOS received
Retired Moderator
User avatar
P
Status: worked for Kaplan's associates, but now on my own, free and flying
Joined: 19 Feb 2007
Posts: 4290

Kudos [?]: 7867 [2], given: 363

Location: India
WE: Education (Education)
Re: Verbal Diagnostic Test No : 6 – CR Q No: 2 [#permalink]

Show Tags

New post 27 Oct 2015, 09:09
2
This post received
KUDOS
dina98

The Central Bank’s arguments hinge on one single factor that containment of money supply and thereby inflation is the means of achieving prosperity. This is a debatable point. There are other ways through which growth can be spurred. For example, Roosevelt proved in the 1930’s when the country was going through the Great depression that by massive development, one can stoke growth. The ignoring of other viable alternative causes is what weakens the Central Bank’s narrow perspective relative to money supply.

It must be noted that the issue is about interest rate maneuvers in general and not about exclusive reference to either increases or decreases in rate. While lowering the rate may aid an already flourishing economy, it may not assist that much a dented economy. That is the reason many developing nations have to create wealth through growth, even at the risk of some inflation.

D is silent on the core issue of bailing out a weak economy; it is just scratching the surface of problem, akin to treating the symptoms of a disease rather than the cause of the disease by admitting that the effect is temporary.

May be this is a bit of discourse on Economics, though essential to deal with critical reasoning. This was my perception honestly when I formatted the answer choices
_________________

“Better than a thousand days of diligent study is one day with a great teacher” – a Japanese proverb.
9884544509

Kudos [?]: 7867 [2], given: 363

Intern
Intern
avatar
B
Joined: 10 Aug 2017
Posts: 18

Kudos [?]: 2 [0], given: 120

Re: Verbal Diagnostic Test No : 6 – CR Q No: 2 [#permalink]

Show Tags

New post 21 Sep 2017, 00:08
This is not related to answering the question itself, but isn't interest cut an expansionary monetary policy - I imagine interest cut would have the opposite effect of containing ballooning of money supply (and hence inflation).

While I am aware that GMAT questions do not require outside knowledge, I find the logic in the question stem to be misleading and questionable.

Please correct me if I am wrong.

Kudos [?]: 2 [0], given: 120

Re: Verbal Diagnostic Test No : 6 – CR Q No: 2   [#permalink] 21 Sep 2017, 00:08
Display posts from previous: Sort by

Verbal Diagnostic Test No : 6 – CR Q No: 2

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


GMAT Club MBA Forum Home| About| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

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

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.