During the 1980s, many economic historians studying Latin America

Question

Line 
 
 During the 1980s, many economic historians studying Latin America focused on the impact of the Great Depression of the 1930s. Most of these historians argued that although the Depression
 
 (5)  
 
began earlier in Latin America than in the United States, it was less severe in Latin America and did not significantly impede industrial growth there. The historians’ argument was grounded in national government records concerning tax revenues and
 
 (10)  
 
exports and in government-sponsored industrial censuses, from which historians have drawn conclusions about total manufacturing output and profit levels across Latin America. However, economic statistics published by Latin American
 
 (15)  
 
governments in the early twentieth century are neither reliable nor consistent; this is especially true of manufacturing data, which were gathered from factory owners for taxation purposes and which therefore may well be distorted. Moreover,
 
 (20) 
 
one cannot assume a direct correlation between the output level and the profit level of a given industry as these variables often move in opposite directions. Finally, national and regional economies are composed of individual firms and industries,
 
 (25)  
 
and relying on general, sweeping economic indicators may mask substantial variations among these different enterprises. For example, recent analyses of previously unexamined data on textile manufacturing in Brazil and Mexico suggest that the
 
 (30)  
 
Great Depression had a more severe impact on this Latin American industry than scholars had recognized.
 
   1 
 1. The primary purpose of the passage is to

A. compare the impact of the Great Depression on Latin America with its impact on the United States
B. criticize a school of economic historians for failing to analyze the Great Depression in Latin America within a global context
C. illustrate the risks inherent in comparing different types of economic enterprises to explain economic phenomena
D. call into question certain scholars’ views concerning the severity of the Great Depression in Latin America
E. demonstrate that the Great Depression had a more severe impact on industry in Latin America than in certain other regions

2 
 2. Which of the following conclusions about the Great Depression is best supported by the passage?

A. It did not impede Latin American industrial growth as much as historians had previously thought.
B. It had a more severe impact on the Brazilian and the Mexican textile industries than it had on Latin America as a region.
C. It affected the Latin American textile industry more severely than it did any other industry in Latin America.
D. The overall impact on Latin American industrial growth should be reevaluated by economic historians.
E. Its impact on Latin America should not be compared with its impact on the United States

3 
 3. Which of the following, if true, would most strengthen the author’s assertion regarding economic indicators in lines 25–27 ?

A. During an economic depression, European textile manufacturers’ profits rise while their industrial output remains steady.
B. During a national economic recession, United States microchips manufacturers’ profits rise sharply while United States steel
manufacturers’ profits plunge.
C. During the years following a severe economic depression, textile manufacturers’ output levels and profit levels increase in Brazil and
Mexico but not in the rest of Latin America.
D. Although Japanese industry as a whole recovers after an economic recession, it does not regain its previously high levels of production.
E. While European industrial output increases in the years following an economic depression, total output remains below that of Japan or the United States.

OG 2019 ID's:
RC00333-01
RC00333-02
RC00333-04

Kurtosis · Accepted Answer

1) The primary purpose of the passage is to

A. compare the impact of the Great Depression on Latin America with its impact on the United States - Incorrect. The passage does not compare the impact of Great Depression on Latin America with other nations. Rather the passage is focused on the impact of Great Depression on the industrial growth in Latin America.

B. criticize a school of economic historians for failing to analyze the Great Depression in Latin America within a global context - Incorrect. Global context?

C. illustrate the risks inherent in comparing different types of economic enterprises to explain economic phenomena - Incorrect. Out of context

D. call into question certain scholars’ views concerning the severity of the Great Depression in Latin America - Correct

E. demonstrate that the Great Depression had a more severe impact on industry in Latin America than in certain other regions - Incorrect. Same reason as A. The passage does not compare the impact of GD in Latin America with other regions.

Answer: D

2) Which of the following conclusions about the Great Depression is best supported by the passage?

Refer: Historians think that GD was less severe in Latin America and did not significantly impede industrial growth. The passage provides reasons to disprove the view of the historians.

Answer: D

3) Which of the following, if true, would most strengthen the author’s assertion regarding economic indicators in lines 25–27 ?

Refer: "Finally, national and regional economies are composed of   individual firms and industries  , and relying on general, sweeping economic indicators may   mask substantial variations   among these   different enterprises  ."

A. During an economic depression, European textile manufacturers’ profits rise while their industrial output remains steady. - Incorrect. Focus is only on textile manufacturers.

B. During a national economic recession, United States microchips manufacturers’ profits rise sharply while United States steel manufacturers’ profits plunge. - Correct. We have two different industries: Microchip and steel. There is a variation between the 2 industries profits.

C. During the years following a severe economic depression, textile manufacturers’ output levels and profit levels increase in Brazil and Mexico but not in the rest of Latin America. - Incorrect. Only textile manufacturers are considered.

D. Although Japanese industry as a whole recovers after an economic recession, it does not regain its previously high levels of production. - Incorrect. Japanese industry as a whole is considered.

E. While European industrial output increases in the years following an economic depression, total output remains below that of Japan or the United States. - Incorrect. Same reason as before.

Answer: B

GMATNinja · Answer

Harsh2111s  is on the right track! I'll explain a bit more in case it's useful.

First, take a look at the "claim" discussed in question #3:

"National and regional economies are composed of individual firms and industries, and relying on general, sweeping economic indicators may mask substantial variations among these different enterprises."

Here, the author says that you can't use  general  economic indicators to draw specific conclusions, because these indicators will miss variation in the performance of  "individual firms and industries."

To answer the question, we need to strengthen this claim. So, we are looking for something that shows that different firms or industries are experiencing different results.

This doesn't provide a comparison between different firms/industries -- instead, it compares profits and output in  one  industry. Eliminate (A).

Here we go! This shows that one industry (microchip manufacturing) had an increase in profits, while another industry (steel manufacturing) had a decrease in profits. This is exactly the kind of variation the author references in his/her claim. (B) is the correct answer to question #3.

I hope that helps!

sanjana90 · Answer

I am unable to figure out how AO is B in question no. 3? The passage talks about the US only in the beginning and nowhere mentions about steel and microchip industry of the US.

Casilas · Answer

This is an analogy Question (type).
You need to find out what the given condition / situation is ,  here it is-  sweeping economic
indicators may mask  substantial variations among
these different enterprises  . 
Now we need to use this idea to find our analogy.
Only in option B.  Different enterprises  are being talked about (United States microchips manufacturers& United States steel manufacturers) and the  substantial variations  . Ones profits rise sharply and the others plunge.

adkikani · Answer

generis   ammuseeru   nightblade354   pikolo2510 
 GMATNinja   KarishmaB

Can anyone explain (Book Question: 462)
Which of the following, if true, would most strengthen the author’s assertion regarding economic indicators in lines 25–27 ?
A. During an economic depression, European textile manufacturers’ profits rise while their industrial output remains steady.
B. During a national economic recession, United States microchips manufacturers’ profits rise sharply while United States steel manufacturers’ profits plunge.
C. During the years following a severe economic depression, textile manufacturers’ output levels and profit levels increase in Brazil and Mexico but not in the rest of Latin America.
D. Although Japanese industry as a whole recovers after an economic recession, it does not regain its previously high levels of production.
E. While European industrial output increases in the years following an economic depression, total output remains below that of Japan or the United States.

I failed to identify the main conclusion and supporting premise here.
I understood below:
 
Author seems to be disagreeing with historians that 
  Great depression was was less severe in Latin America than in US 
and did not significantly impede industrial growth there

Supporting premise used by author against historians  
 The premise used by historians ie economic statistics are neither accurate 
nor reliable

Additional supporting premise used by author against historians  
 one cannot assume a direct correlation between
the output level and the profit level of a given
industry as these variables often move in opposite
directions

I could not proceed further.

AliciaSierra · Answer

What i understood is

As per historians, great depression was less severe in Latin America than USA and great depression didn't delay Industrial Growth in Latin America.
Historians used data from National government records and government-sponsored industrial censuses to claim their assertion.

National Government Records--> Tax revenues and Exports
Government-sponsored industrial censuses--> Total Manufacturing Output and Profit Levels.

But as per Author, Historians claim is not reliable and not consistent. 
Author specifically points out that Historian claim is not valid for MANUFACTURING DATA.

Then Author says:
1. Manufacturing data may be distorted
2. CANNOT assume a direct correlation between the output level and the profit level of a given industry. These variables often move in opposite directions.
3. National and Regional Economies are consist of Individual firms and Industry. Economic Indicator, which is very wide, may hide substantial variation among DIFFERENT Firms/Enterprises.

Then Author gives example of textile manufacturing of Brazil and Mexico and says GD has more impact in Latin America than historians considered.

adkikani  to your question, please note "DIFFERENT Enterprises" which author mentioned in 3rd point. Only option B considers two different firms i.e. USA microchips manufacturers’ and USA steel manufacturers profits’
Other options talk about one industry only. So option B is correct.

pollymonkey · Answer

(Book Question: 461)
Which of the following conclusions about the Great Depression is best supported by the passage?
A. It did not impede Latin American industrial growth as much as historians had previously thought.
B. It had a more severe impact on the Brazilian and the Mexican textile industries than it had on Latin America as a region.
C. It affected the Latin American textile industry more severely than it did any other industry in Latin America.
D. The overall impact on Latin American industrial growth should be reevaluated by economic historians.
E. Its impact on Latin America should not be compared with its impact on the United States

I still don't understand why B is wrong in Question No.2.
the passage says, using general data would mask the variation among different industries, implying that the historians are considering the textile industries at the same level as the whole Latin America. 
And then the passage says, Brazil and Mexico textile industries suffered more severe impact than historians had recognized. Doesn't this mean the impact on the Brazilian and the Mexican textile industries is more severe than that is on Latin America as a region?

Can anyone help? Thanks!

ngmat12 · Answer

This is a trap they are trying to draw you into. The key words referenced in the answer are similar to those in the passage, but the conclusion cannot be directly inferred from/supported by the passage.

The passage merely states that  "recent analyses of previously unexamined data on textile manufacturing in Brazil and Mexico suggest that the Great Depression had a more severe impact on this Latin American industry than scholars had recognized."

This simply means that scholars originally thought (as an example) the Brazil + Mexico textile industry declined by 1% but actually it declined by 2% as a result of the Great Depression.

The answer is suggesting that this impact (the decline above as an example) was greater than the impact on Latin America as a region. In our example that would imply LatAm declined by <1%.
BUT the passage does not make any comparison between the two so that you could infer this.

For example it is perfectly possible that LatAm declined by 50%. In this case the passage would still support the fact that the decline in Brazil + Mexico textile industry was  greater than originally thought, BUT NOT greater than the decline in LatAm as a region.

Hope this helps explain why B is wrong.

Tracy95 · Answer

Here is my approach to question 3:

My understanding of  "Finally, national and regional economies are composed of individual firms and industries,and relying on general, sweeping economic indicators may mask substantial variations among these different enterprises."  is that  the author is implying that by only looking at general indicators, one might overlook varied data of component firms.  (same as  pollymonkey  's understanding)

A. During an economic depression,  European textile manufacturers’ profits  rise while their  industrial output  remains steady.  
=> I think this choice is meant to strengthen the given statament as it demonstrates a similar case of divergent textile manufacturers out of the total industry, but the only  flaw  that makes it out is that it compares "profits" and "output" (if it had compared either "manufacturers' profit" with "industrial profits" or "manufacturers' output" with "industrial output", this choice would be worth considering.)

B. During a national economic recession,  United States microchips manufacturers ’ profits rise sharply while  United States steel manufacturers ’ profits plunge.  
=> Though this choice doesn't address the "general-component" key point, it does tackle the part "substantial variations among these different enterprises.". Thus it's correct.

Piyu1 · Answer

GMATNinja  , Can you help with the 3rd Question. Why A is not correct?

Harsh2111s · Answer

Because option A comparing output with profit.

nikitamaheshwari · Answer

Can you provide an example for the below statement ? - you can't use  general  economic indicators to draw specific conclusions, because these indicators will miss variation in the performance of  "individual firms and industries." 
For ex: If we use profits as an economic indicator to draw conclusions. Now, during economic recession, one would generalize and say that manufacturing units incur losses. Such conclusion do not take into account that different firms react differently. Some may profit while the other may incur losses. but since large no. of them incur losses our conclusion is based on that?

saby1410 · Answer

GMATNinja   VeritasKarishma   ChiranjeevSingh   abhimahna  @MartyTargetprep 
Moreover,
one cannot assume a direct correlation between
the output level and the profit level of a given
industry as these variables often move in opposite
directions.

can you explain "these variable" refers to which entity and how it says that one cannot assume a direct correlation between
the output level and the profit level of a given industry as these variables often move in opposite directions.

please explain the above line how this variable often move in opposite direction doesn't direct impact the correlation between output level and profit level.

GMATNinja · Answer

Your example is a good one! It provides an example of general indicators missing variation in the performance of "individual firms and industries."

BUT  our task in this question isn't to come up with examples, it's to choose the answer choice that most strengthens the author's assertion.

The author argues that relying on "general, sweeping economic indicators" may mask substantial variation among "individual firms and  industries ". (B) shows variation among different industries and therefore strengthens the author's claim.

While your example is correct, there's no need to create further examples to answer this question -- we just need to determine whether each answer choice strengthens the author's claim, and eliminate the answers that do not.

I hope that helps!

saby1410 · Answer

GMATNinja   mikemcgarry   VeritasKarishma

will you explain why option c of ques 3 is wrong ?

KarishmaB · Answer

We know that 
Output - Cost = Profit

The line simply means that one cannot assume that if output of an industry grows, its profit grows too. That, one cannot assume that if output of an industry increases, its profit increases too. 
The line tells us that these two variables often move in opposite directions. So if the output of an industry grows, profit often slips (perhaps because cost rises significantly when one tries to increase the output, increased output may not be most efficient). e.g. larger conglomerates often have smaller profit margins compared with tightly owned family businesses.

KarishmaB · Answer

lines 25 - 27:

Finally, national and regional economies
are composed of individual firms and industries,
 and relying on general, sweeping economic
indicators may mask substantial variations among
these different enterprises.

The line is saying that economic indicators may not capture the variations among industries.

Previous sentences:
 The historians’ argument was grounded in national
government records concerning tax revenues and
(10)
exports and in government-sponsored industrial
censuses, from which historians have drawn
conclusions about total manufacturing output
and profit levels across Latin America.

These tell us that historians have used various economic indicators to draw conclusions about output etc. The highlighted portion is saying that these economic indicators do not explain the variations between industries. 
Say the historians drew a conclusion that manufacturing output increased by 2% during depression. Perhaps the output decreased by 20% in textile while it increased by 5% in the steel sector.

B. During a national economic recession, United States microchips manufacturers’ profits rise sharply while United States steel manufacturers’ profits plunge.
Correct. Helps author's highlighted assertion

C. During the years following a severe economic depression, textile manufacturers’ output levels and profit levels increase in Brazil and Mexico but not in the rest of Latin America.
The author is not talking about output and profit in the highlighted sentences. He is talking about different industries' data not getting captured in economic indicators.

homersimpsons · Answer

OE 
Q1. The primary purpose of the passage is to
A. compare the impact of the Great Depression on Latin America with its impact on the United StatesB. criticize a school of economic historians for failing to analyze the Great Depression in Latin America within a global context
C. illustrate the risks inherent in comparing different types of economic enterprises to explain economic phenomena
D. call into question certain scholars’ views concerning the severity of the Great Depression in Latin America
E. demonstrate that the Great Depression had a more severe impact on industry in Latin American than in certain other regions
 Main idea 
This question depends on understanding the passage as a whole. The passage first describes the view of many economic historians of the 1980s. It next describes the evidence on which that view is based. The remainder of the passage raises issues about the rationale for that view.
A. The comparison between Latin America and the United States is only a small part of a larger argument analyzing studies of the Great Depression in Latin America.
B. The passage does not discuss a global context for the Great Depression.
C. The passage does not primarily aim to illustrate risks that may be generally inherent in explaining economic phenomena.
D.  Correct . The passage claims that certain scholars underestimate the severity of the Great Depression in Latin America.
E. The passage does not claim that the impact of the Great Depression on Latin American industry was generally more severe than its impact on industry elsewhere.
 The correct answer is D.

Q2. Which of the following conclusions about the Great Depression is best supported by the passage?
A. It did not impede Latin American industrial growth as much as historians had previously thought.
B. It had a more severe impact on the Brazilian and the Mexican textile industries than it had on Latin America as a region.
C. It affected the Latin American textile industry more severely than it did any other industry in Latin America.
D. The overall impact on Latin American industrial growth should be reevaluated by economic historians.
E. Its impact on Latin America should not be compared with its impact on the United States.
 Inference 
This question asks which conclusion is most strongly supported by the passage. The passage presents the rationale of some historians for their conclusion that the Great Depression did not significantly interfere with economic growth in Latin America. It then critiques that rationale and conclusion. By questioning the historians’ claims, the passage suggests that a reevaluation of the Great Depression’s effect on Latin America is needed.
A. The passage does not significantly support this. The passage indicates that, in fact, the Great Depression impeded Latin American economic development more than some historians had thought.
B. The passage does not significantly support this. The passage does not compare the impact on the Brazilian and Mexican textile industries to the impact on the Latin American region.
C. The passage does not significantly support this. The passage does not compare the effect of the Great Depression on the textile industry to its effect on other industries.
D.  Correct . As presented in the passage, the passage author’s critique of the historians’ rationale fortheir claims provides significant support for the conclusion that their claims should be reevaluated.
E. The passage does not significantly support the claim that the comparison in question should not be made.
 The correct answer is D.

Q3A. During an economic depression, European textile manufacturers’ profits rise while their industrial output remains steady.
B. During a national economic recession, United States microchips manufacturers’ profits rise sharply while United States steel manufacturers’ profits plunge.
C. During the years following a severe economic depression, textile manufacturers’ output levels and profit levels increase in Brazil and Mexico but not in the rest of Latin America.
D. Although Japanese industry as a whole recovers after an economic recession, it does not regain its previously high levels of production.
E. While European industrial output increases in the years following an economic depression, total output remains below that of Japan or the United States.
 Application 
The question involves applying information from outside the passage to a claim made by the author. The text in lines 25–27 asserts that broad economic indicators pertaining to a nation or region can obscure differences between individual firms or industries within that nation or region. The question asks which evidence would most strengthen the support for that conclusion.
A. This refers only to the relationship between a single industry’s profits and its output, not to general economic indicators.
B.  Correct.  The phrase a national recession refers to a general economic indicator. Suppose that in a situation described as a national recession, one industry (microchip manufacturing) prospers while another industry (steel manufacturing) does not. This would provide some additional support, over and above that given in the passage, for the assertion that broad economic indicators may mask differences between industries.
C. Economic differences between countries do not strengthen the support for the author’s assertion regarding variations among different firms and industries in one country or region.
D. This has no obvious bearing on how sweeping economic indicators can mask differences between industries or enterprises in a single country or region.
E. A comparison of different countries does not pertain to the assertion regarding variation among firms and industries in the same country.
 The correct answer is B.

jabhatta2 · Answer

GMATNinja   VeritasKarishma

On question 3, i chose option C, not B

Here is why:

Finally, national and regional economies
are composed of individual firms and industries,
and relying on general, sweeping economic
indicators may mask substantial variations among
these different enterprises.

When i read this i was looking for the following for my strengthener in terms of criteria :

-- Concept of "masking" specifically. 
-- Looking for an example of how high level indicators MASK variations / changes between different enterprises.

As an analogy, I was looking for overall GDP of Asia to be the same but going one level deeper, GDP of China and Japan are have increased significantly whereas GDP of India and Sri-lanka are have decreased significantly

I thought C did a much better job than B to show this analogy :

-- The high level indicators is regional Latin america output 
-- Within Latin America, OVERALL output is the same or negative BUT variations in Brazil and Mexico actually increases

This gives an example of how masking can take place.

Sure Latin America/ Brazil / Mexico are NOT enterprises - but so what ? It is the "Criteria" in pink i am looking to match. It doesn't have to be necessarily "enterprises" only i have to look for in order to strengthen

B on the other hand DOES not have any masking 
- US microchips manufacturers’ profits rise sharply while United States steel manufacturers’ profits plunge.

Where is the masking here ? They are directional-y opposite but we don't know what the aggregate high level indicator is in this case and whether the high level indicator is showing something else ?

Please let me know where is the issue in my thinking !

During the 1980s, many economic historians studying Latin America

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During the 1980s, many economic historians studying Latin America

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