During the Great Depression, Roosevelt's New Deal expanded

Question

During the Great Depression, Roosevelt’s New Deal expanded federal authority by creating several new government agencies designed to provide and administer relief to the country, which had been devastated by the 1929 stock market crash. Many agencies created under the New Deal were discontinued in subsequent decades, however, when policymakers grew uncomfortable with the amount of power wielded by the federal government. Additionally, a large number of economists at the time felt the market had recovered to the point that federal regulation had become more a hindrance to than a provider of economic stability.

The economists’ support of the discontinuation of New Deal programs rests on which of the following assumptions about the role of the federal government in the market?

A) Interference by federal government in the market can never create economic stability.
B) Federal regulation of the market is an emergency measure and, as such, should be temporary.
C) Agencies created under the New Deal routinely exercised control beyond what was stated in their charters.
D) Policymakers who discontinued New Deal programs were not the same policymakers who originally implemented them.
E) New Deal programs designed to provide economic relief actually perpetuated market instability.

GMAT Club Test: V04- 29

sudhir18n · Answer

I go with B on this one ..
Most important clue is 'economists at the time felt the market had  recovered to the point'

DevilDoggNC · Answer

B for me as well...it's the only option that is logically presents the relationship between the view of the economists and the role of the federal government.

jamifahad · Answer

Why do you guys reject C?
Sorry, i think B seems best option but i cannot find any reason to reject C.
Author is assuming that "Agencies created under the New Deal routinely exercised control beyond what was stated in their charters." and that is the reason agencies became hindrance rather than a provider of economic stability.

Correct me if i am wrong.
Thanks.

sudhir18n · Answer

how do we know what is stated in their chapters?
may be thats how their chapters are written , and they are perfectly within the scope of their chapters

gijoedude · Answer

Simple answer: B. Economists think that the federal govt should intervene only as required and stay out if the economy is ok.

vinayrsm · Answer

good one. I chose A. B seems clear now. A uses strong wording and I was inclined to reject it but between B and A picked A.

JohnGaltMBA · Answer

A) is wrong because it overbroad. Look for words like NEVER, ALWAYS, etc. These are probably going to be overbroad.
C) is incorrect because we have no idea what is in their charters
D) is incorrect because this is not an assumption that the economists' conclusion rests upon. Who cares if they aren't the same?
E) is incorrected because the stimulus refutes it. The economists actually acknowledge that there was recovery, not a perpetuation of instability.

tuanquang269 · Answer

During the Great Depression, Roosevelt’s New Deal expanded federal authority by creating several new government agencies designed to provide and administer relief to the country, which had been devastated by the 1929 stock market crash. Many agencies created under the New Deal were discontinued in subsequent decades, however, when policymakers grew uncomfortable with the amount of power wielded by the federal government. Additionally, a large number of economists at the time felt the market had recovered to the point that federal regulation had become more a hindrance to than a provider of economic stability.

The economists’ support of the discontinuation of New Deal programs rests on which of the following assumptions about the role of the federal government in the market?

(a) Interference by federal government in the market can never create economic stability.
(B) Federal regulation of the market is an emergency measure and, as such, should be temporary.
(C) Agencies created under the New Deal routinely exercised control beyond what was stated in their charters.
(D) Policymakers who discontinued New Deal programs were not the same policymakers who originally implemented them.
(E) New Deal programs designed to provide economic relief actually perpetuated market instability.

OA later some discussion

FatTailEvent · Answer

Make this one easy by keying in on the boldface text I've created above. C,D,E can be easily eliminated because they don't deal with the (general) role of the federal government in the market. So we're left with A and B. Throw out A because clearly economists didn't think federal intervention could *never* create stability since the article states they felt intervention *had become* a hindrance (i.e. previously intervention had not been a hindrance).

Therefore B.

Bowtie · Answer

I go for B.
In the question stem it says that the economy had recovered enough and now the regulation is a hinderence. So economists thought it worked and is now causing issues.

Option B best reflects the temporary view of the economists

C is out of scope 
E actually caught my eye at first but if that was the case the economy may not have recovered and economists may have seen it as a hindernce before.

Posted from my mobile device

tuanquang269 · Answer

3 guys correct and 3 guys incorrect.

Can anyone explain more on this question? This is tough one deserved to bring out of light :D.

calreg11 · Answer

A good way to answer this is to negate the answers. If the conclusion cannot hold true with the negated answer then that is the correct answer.

The two most common answers were C and B

(B) Federal regulation of the market is an emergency measure and, as such, should be temporary.
 ---(Negate) cannot be temporary. If they cannot be temporary then the agencies cannot be discontinued. This is the answer.
(C) Agencies created under the New Deal routinely exercised control beyond what was stated in their charters.
 ----(negate) rarely / did not exercise control beyond what was states in their charters. If they did not go beyond their charters then The discontinued agencies would still be there.

Let me know what your opinion is on how i answered the question. I am still rusty on answering CR questions.

prab · Answer

Hope this makes sense,

(a) Interference by federal government in the market can never create economic stability.
-- very strong. Avoid strong word as 'never'

(B) Federal regulation of the market is an emergency measure and, as such, should be temporary.
--federal reg. came in when there was crisis and people want them out when no crisis. Hence 
correct

(C) Agencies created under the New Deal routinely exercised control beyond what was stated in their charters.
-- this is not stated. Nothing abt exercising control mentioned.

(D) Policymakers who discontinued New Deal programs were not the same policymakers who originally implemented them.
-- way out. out of scope

(E) New Deal programs designed to provide economic relief actually perpetuated market instability.
-- discussion is about the power and distribution. the new deal actually made the market stable.

goalset · Answer

B it is.If the economy becomes stable then the federal agencies and their powers should be withdrawn as they will only prove themselves an hindrance as compared to an business booster.

nirakrish · Answer

17) During the Great Depression, Roosevelt’s New Deal expanded federal authority by creating several new government agencies designed to provide and administer relief to the country, which had been devastated by the 1929 stock market crash. Many agencies created under the New Deal were discontinued in subsequent decades, however, when policymakers grew uncomfortable with the amount of power wielded by the federal government. Additionally, a large number of economists at the time felt the market had recovered to the point that federal regulation had become more a hindrance to than a provider of economic stability.

The economists’ support of the discontinuation of New Deal programs rests on which of the following assumptions about the role of the federal government in the market?

A) Interference by federal government in the market can never create economic stability.
B) Federal regulation of the market is an emergency measure and, as such, should be temporary.
C) Agencies created under the New Deal routinely exercised control beyond what was stated in their charters.
D) Policymakers who discontinued New Deal programs were not the same policymakers who originally implemented them.
E) New Deal programs designed to provide economic relief actually perpetuated market instability.

Please discuss.

thevenus · Answer

A) Interference by federal government in the market can never create economic stability.
B) Federal regulation of the market is an emergency measure and, as such, should be temporary.
 at the time of need federal regulation's help was good , temporarily but later when the need was not required then it could have been stopped. 
C) Agencies created under the New Deal routinely exercised control beyond what was stated in their charters.
D) Policymakers who discontinued New Deal programs were not the same policymakers who originally implemented them.
E) New Deal programs designed to provide economic relief actually perpetuated market instability.

hfbamafan · Answer

I was about to choose option E until I reread the question stem.

This is a weird assumption stem because it asks for a specific assumption. The question is asking for an assumption based on the economists POV. The premise is stating that congress was growing uncomfortable with the regulations that have not been dismantled, and Congress wants the government to have less control.

The economists statement is what the question is asking us to draw an assumption from. Their view is that to much regulation could impede the country's ability to grow on its own. Answer choice B is basically saying that the regulations worked during troubled times, but is a hindrance to economic growth during times of prosperity.

ssbisht · Answer

The Question in the passage is about what economists.
The most important point to note here is what economist felt.
 So the key line is: economists at the time felt the market had recovered to the point…

Now look at the choices and eliminate the wrong choices:
During the Great Depression, Roosevelt’s New Deal expanded federal authority by creating several new government agencies designed to provide and administer relief to the country, which had been devastated by the 
A) Interference by federal government in the market can never create economic stability.
-- This is nowhere said or meant by the economists.

B) Federal regulation of the market is an emergency measure and, as such, should be temporary.
 Correct! This is correct as it indicates what economist means when they said that At this point market has recovered to a point. 
C) Agencies created under the New Deal routinely exercised control beyond what was stated in their charters.
- -Not relevant as not related to provided economist thinking in anyway.

D) Policymakers who discontinued New Deal programs were not the same policymakers who originally implemented them.
- -Not relevant as not related to provided economist thinking in anyway.

E) New Deal programs designed to provide economic relief actually perpetuated market instability.
- -Not relevant as not related to provided economist thinking in anyway.

Carcass · Answer

Well from a standpoint that adheres to reality B is not always true.

But, considering that this is gmatland and the argument must be taken as such, B is correct.

I will pick it wrong, for sure during the test if I think like an aconomist due to my degree

:

Good stuff rock

: Good stuff rock

During the Great Depression, Roosevelt's New Deal expanded

Prep Toolkit

Top 5 GMAT Debrief Videos

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards

GMAT Critical Reasoning (CR) Questions

During the Great Depression, Roosevelt's New Deal expanded

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards