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We should abolish the public education system and allow schools to operate as autonomous units competing for students. Students will receive government funds in the form of vouchers which they can then “spend” at the school of their choice. This will force schools to compete for students by offering better and more varied educational services. As in private industry, only the schools that provide customer satisfaction will survive. Since schools that cannot attract students will close, we will see an overall improvement in the quality of education. The argument above rests on which of the following unsupported assumptions?
--------------------------------------

What do we have.
1. Students will receive government funds
2. This will force schools to compete for students by offering better and more varied educational services.
3. Only the schools that provide customer satisfaction will survive
4. Since schools that cannot attract students will close, we will see an overall improvement in the quality of education.

So 4 it is a conclusion.
What is the quality of education?
Does it matter, "bad" school or in "good school" if students attending these schools do not want to learn?
If we think about the answers to these questions, we will understand that the only one good option is A.

The quality of education = good student learning

We need link between winning of good schools over bad schools and improvement in quality of education.

Good school ---> Maximizing student and parent satisfaction ---> maximizing of student learning ---> improvement in the quality of education.

----------------------
(A) Maximizing student and parent satisfaction also maximizes student learning.
(B) In order to attract students, all schools will eventually have to offer essentially the same curriculum. It does not matter. Out
(C) Giving students direct financial aid encourages them to study harder. The link between fin aid and hard learning is not important. Out
(D) Schools should provide only educational services and not additional co-curricular or extra-curricular activities. Totally out of scope
(E) All education, both public and private, should be funded either directly or indirectly by government expenditures. Does not matter
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Official Explanation

Examine each statement. (A) is a hidden assumption of the argument. Under the proposed system, according to the speaker, schools will have to make the customers happy and concludes that this will result in improved education. Thus, a hidden assumption of the argument is the equation between “happy customers” and “improved education.”

(B) is not an assumption of the argument. Indeed, the speaker implies that in an effort to attract students, schools will try to differentiate themselves from each other.

And as for (C), the speaker does not assume that there is any causal connection between “aid” and “study.” The speaker expects to see a positive result because schools are doing a better job. That may prompt students to study harder, but the motivating factor then is not “direct financial aid.”

(D) is apparently a misreading of the paragraph. The speaker says that schools will compete in terms of “educational services,” which may be broad enough to include other activities but, in any event, certainly does not preclude offering other activities in the mix.

And as for (E), the speaker does not say that there should be no privately funded schools at all—only that the public schools should be funded on a different model.

The correct answer is (A).
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