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sayan640
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Once a major source of loans for overseas development projects, the Updated on: 03 Jul 2024, 23:45
Originally posted by sayan640 on 03 Jul 2024, 16:19.
Last edited by Bunuel on 03 Jul 2024, 23:45, edited 3 times in total.
Renamed the topic and edited the question.
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Which of the following most logically completes the argument?  

Once a major source of loans for overseas development projects, the Republic of Lyttonia endured a period of deflation and sluggish growth after a speculative bubble in the domestic property market burst twenty years ago. Few overseas development loans were initiated during this period of economic stagnation.  More recently, the Lyttonian economy has improved significantly, and the country now has a significant supply of funds earmarked for investment.  However, it is a mistake to assume that this increase in investment capital will result in a renewed commitment to loans for overseas development projects, because __________. 

A. Lyttonia's overhang of bad debt resulting from the property market collapse has now been cleared. 

B. a number of worthwhile overseas development projects were postponed during the last twenty years and are still awaiting funding. 

C. the average savings rate in Lyttonia's private sector is higher now than it was twenty years ago. 

D. Lyttonia urgently needs to invest in upgrading its domestic infrastructure, which deteriorated during the long period of economic stagnation. 

E. loans for overseas development projects require some level of trust and cooperation between the government of Lyttonia and the government of the nation that receives the aid. ­
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D
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Once a major source of loans for overseas development projects, the 03 Jul 2024, 21:16
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sayan640
Which of the following most logically completes the argument?  

Once a major source of loans for overseas development projects, the Republic of Lyttonia endured a period of deflation and sluggish growth after a speculative bubble in the domestic property market burst twenty years ago.  Few overseas development loans were initiated during this period of economic stagnation.  More recently, the Lyttonian economy has improved significantly, and the country now has a significant supply of funds earmarked for investment.  However, it is a mistake to assume that this increase in investment capital will result in a renewed commitment to loans for overseas development projects, because __________. 



  1. Lyttonia's overhang of bad debt resulting from the property market collapse has now been cleared. 
  2. a number of worthwhile overseas development projects were postponed during the last twenty years and are still awaiting funding. 
  3. the average savings rate in Lyttonia's private sector is higher now than it was twenty years ago. 
  4. Lyttonia urgently needs to invest in upgrading its domestic infrastructure, which deteriorated during the long period of economic stagnation. 
  5. loans for overseas development projects require some level of trust and cooperation between the government of Lyttonia and the government of the nation that receives the aid. 
 

­
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­The Answer is D - because if Lyttonia needs amount for it's own development, it will prioritise that over loans for overseas development projects which is good extension to the statement.

Anyone, can explain why E is not the answer?
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Once a major source of loans for overseas development projects, the 03 Jul 2024, 21:41
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Because option E only stated about the level of trust required .
But it dint mention how the level of trust and cooperation currently is between Lyttonia and the country that receives that aid.
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sayan640
Which of the following most logically completes the argument?  

Once a major source of loans for overseas development projects, the Republic of Lyttonia endured a period of deflation and sluggish growth after a speculative bubble in the domestic property market burst twenty years ago.  Few overseas development loans were initiated during this period of economic stagnation.  More recently, the Lyttonian economy has improved significantly, and the country now has a significant supply of funds earmarked for investment.  However, it is a mistake to assume that this increase in investment capital will result in a renewed commitment to loans for overseas development projects, because __________. 



  1. Lyttonia's overhang of bad debt resulting from the property market collapse has now been cleared. 
  2. a number of worthwhile overseas development projects were postponed during the last twenty years and are still awaiting funding. 
  3. the average savings rate in Lyttonia's private sector is higher now than it was twenty years ago. 
  4. Lyttonia urgently needs to invest in upgrading its domestic infrastructure, which deteriorated during the long period of economic stagnation. 
  5. loans for overseas development projects require some level of trust and cooperation between the government of Lyttonia and the government of the nation that receives the aid. 
 

­
­The Answer is D - because if Lyttonia needs amount for it's own development, it will prioritise that over loans for overseas development projects which is good extension to the statement.

Anyone, can explain why E is not the answer?
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Once a major source of loans for overseas development projects, the 03 Sep 2026, 10:03
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While D may be more suitable, why is B incorrect?
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Once a major source of loans for overseas development projects, the 03 Sep 2026, 18:00
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Which of the following most logically completes the argument?

Once a major source of loans for overseas development projects, the Republic of Lyttonia endured a period of deflation and sluggish growth after a speculative bubble in the domestic property market burst twenty years ago. Few overseas development loans were initiated during this period of economic stagnation. More recently, the Lyttonian economy has improved significantly, and the country now has a significant supply of funds earmarked for investment. However, it is a mistake to assume that this increase in investment capital will result in a renewed commitment to loans for overseas development projects, because __________.

The argument says that Lyttonia once made many overseas development loans, then stopped during a long economic slump, and now again has plenty of investment capital. The missing idea must explain why that available capital may be used somewhere else instead of for overseas development loans.

(A) Lyttonia's overhang of bad debt resulting from the property market collapse has now been cleared.

Incorrect. This removes a financial obstacle and therefore makes renewed overseas lending more plausible.

(B) a number of worthwhile overseas development projects were postponed during the last twenty years and are still awaiting funding.

Incorrect. This strengthens the expectation that Lyttonia may resume overseas development lending because there are attractive projects waiting for funds.

(C) the average savings rate in Lyttonia's private sector is higher now than it was twenty years ago.

Incorrect. A higher savings rate may help explain why more investment capital is available, but it does not explain why that capital will not go to overseas development projects.

(D) Lyttonia urgently needs to invest in upgrading its domestic infrastructure, which deteriorated during the long period of economic stagnation.

Correct. If Lyttonia has an urgent need for major domestic investment, its newly available funds may be directed toward rebuilding its own infrastructure rather than financing projects abroad. This directly explains why more investment capital does not necessarily mean a return to overseas development lending.

(E) loans for overseas development projects require some level of trust and cooperation between the government of Lyttonia and the government of the nation that receives the aid.

Incorrect. This describes a general requirement for such loans, but gives no reason to think that the necessary trust or cooperation is currently lacking.

Answer: (D)
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