If interest rates remain at their current high levels, many people who

Question

If interest rates remain at their current high levels, many people who currently rent their residences will hesitate to purchase homes.  As the price of real estate continues to climb, the costs of a mortgage will be too burdensome. Sellers will be forced to lower their asking prices.  So, high interest rates will eventually cause the real estate market to stabilize.

In the argument above, the portions in boldface play which of the following roles?

(A) The first is the author’s main point; the second is a prediction that follows from that point.

(B) The first is a consideration that the author believes will result in a certain situation; the second is that situation.

(C) The first is a consideration that weighs against the author’s main point; the second is the author’s main point.

(D) The first is a prediction; the second is evidence in support of that prediction.

(E) The first is the author’s main point; the second is evidence used to argue against that point.

pqhai · Accepted Answer

Very very tricky question, indeed. IMO, B is correct.

Here is my 2 cents.

Interest rates remain high ==> prices of homes increase ==> People stop purchasing homes ==> In turn, people will stop selling homes, because there's no demand 
==>  The real estate market is frozen because there's no buyers and no sellers. ==> Equilibrium point / Stabilization

Hence, B is correct.

Bunuel · Answer

OFFICIAL EXPLANATION

The question asks us to analyze the structure of the argument. Specifically, we are asked to determine the respective roles of the two portions in boldface. To do so, we need first to find the conclusion of the argument and then determine the relationship of each boldface portion to that conclusion.

The author argues that high interest rates will cause people to refrain from buying homes because their mortgage costs will be too high. In turn, sellers will be forced to lower their asking prices. In the end, this chain of events will work to stabilize the real estate market. So the last sentence, which happens to be the second boldface portion, is the conclusion. The first boldface portion is a fact that the author belives will lead to the stabilization of the market. We need to find a choice that reflect this assessment.

(A) The first portion is not the author's main point (another term for conclusion).

(B) CORRECT.  The first portion is indeed a consideration that the author believes will result in a particular situation, namely the stabilization of the market. The second is indeed that situation.

(C) The first portion does not weigh against (contradict) the author's main point (conclusion).

(D) The first is indeed a prediction, but the second portion is not evidence -- it is the conclusion.

(E) The first portion is not the main point (conclusion).

happyinlove505 · Answer

I was thinking between A and C, and I can't understand why B is correct.

B says:
 The first is a consideration that the author believes will result in a certain situation; the second is that situation.

If paraphrased, it means to me that second (stable market) is a situation and then the first one (people hesitating to buy homes) follows that situation. However, it is exactly the opposite in the question stem: people hesitating to buy homes eventually leads to stable market.

Please correct me if I am wrong.

ramannanda9 · Answer

IMO B,

I think you misunderstood it; The first is a condition that leads to the second and not the other way around.  High interest rates lead to stabilization, but you cannot say stabilization leads to high interest rates.

pqhai · Answer

Hi happyinlove505

I'm glad to help.

This question requires you to have some backgrounds of economics.

Your first understanding:   "people hesitating to buy homes eventually leads to stable market ==> B is illogical"  is not correct. Why? 
First of all, stable market happens when demand and supply meet. If customers hesitate to buy homes, the demand declines. If the supply does not decline or declines faster than demand, we have a situation, namely "over supply", leading to UNSTABLE market, not stable market.

Why B is correct?

B seems to be illogical but it's correct. Let see.
The logic of B is: high interest rates -->  sub-effect:  stable market -->  main-effect:  people hesitate to buy homes. 
The idea that B wants to conveys is: A belief (People hesitate to buy home) will happens in a situation (stable market  when interest rate is high ). 
 "High interest rate"  is  KEY  and the main  CONDITION  leading to the effect "people hesitate to buy homes". The fact  "stable market"  is just the  situation  that reflects "high interest rates". If the market is stabilized NOT because of "high interest rate", the logic "people hesitate to buy homes in a stable market" is wrong.

That's why B means "people hesitate to buy homes in a situation - stable market" is correct.

Hope it helps.

benguy · Answer

If interest rates remain at their current high levels, many people who currently rent their residences
will hesitate to purchase homes.  As the price of real estate continues to climb, the costs of a mortgage will be
too burdensome. Sellers will be forced to lower their asking prices.  So, high interest rates will eventually
cause the real estate market to stabilize.

high interest --> people hesitate buy home
 real estate high + high interest, --> mortgage cost high --> lower real estate
conclusion: real estate market stabilizes

In the argument above, the portions in boldface play which of the following roles?

• The first is the author’s main point; the second is a prediction that follows from that point.
 The first is NOT the author’s main point;

• The first is a consideration that the author believes will result in a certain situation; the second is that situation.
 correct

• The first is a consideration that weighs against the author’s main point; the second is the author’s main point.
 The first is a consideration that NOT weighs against the author’s main point

• The first is a prediction; the second is evidence in support of that prediction.
 The first is NOT a prediction

• The first is the author’s main point; the second is evidence used to argue against that point.
 the second is NOT evidence used to argue against that point

happyinlove505 · Answer

Hello pqhai, I reviewed your explanation several times, but still could not understand

However, not I think I see where my understanding was wrong. When I first read B, I misinterpreted "The first is a consideration that ... will result in a certain situation" as certain situation will lead to consideration or first . In other words consideration will happen in a situation:) However, now I see that situation is actually a result of consideration

VerbalBot · Answer

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