What is it that keeps the developing world in an apparent state of per

Question

New Project RC Butler 2019  -  Practice 2 RC Passages Everyday   
Passage # 65, Date : 05-MAR-2019
 This post is a part of New Project RC Butler 2019 .  Click here for Details

What is it that keeps the developing world in
an apparent state of perpetual poverty? Poor
education, lack of basic medical care, and the
Line absence of democratic structures all certainly
 (5)  contribute to these nations’ plight. However,
according to Peruvian economist Hernando de
Soto, the overriding cause is the overwhelming
prevalence of black market activity, well outside the
formal economy, in these countries. The losses
 (10)  incurred from this condition are twofold. First, they
deny the government tax revenues which could be
used to improve education, medical treatment, and
government efficiency. More important, however,
they deny earners the chance to accumulate assets
 (15)  recognized by law and thus prevent them from
leveraging those assets to borrow. Reforming
these nations’ legal systems in order to confer
ownership through titling, De Soto argues, would
help the poor there access the assets their work
 (20)  should be generating. These assets could then be
used to buy homes and construct businesses, thus
building a more stable and prosperous economy.
De Soto estimates the value of these assets,
which he terms “dead capital,” at nearly $10 trillion
 (25)  worldwide.

De Soto is not the first to locate the developing
world’s problems in the domain of property
rights. Others have tried property rights reform
and failed. According to de Soto, this is because
 (30)  his predecessors attempted to model their plans
on existing, successful property rights systems.
In other words, they tried to transplant American
and British property law to an inhospitable host.
De Soto argues that within many of the extralegal
 (35)  markets of the developing world, mutually agreed
upon rules for distributing assets and recognizing
property rights already exist. Rather than force
these markets to adjust to a new, foreign system
of property titling, reformers should focus on
 (40)  codifying the existing systems wherever it is
practical to do so. This would facilitate a quicker,
more natural transition to an economy that builds
wealth rather than squanders it.   1 
 D 
 1. The author’s primary goal in the passage is to

A. compare several failed attempts to address a problem
B. respond to criticism of a new theory
C. identify the problems inherent in a new economic theory
D. describe a novel approach to an old problem
E. compare different property rights systems in the industrial world

2 
 B 
 2. According to the passage, de Soto believes that the quickest way to address poverty in the developing world is to

A. increase funding for education
B. build the infrastructure to support lending
C. ensure medical care for all citizens
D. aggressively root out corruption in government
E. increase tax rates on all citizens in developing countries

3 
 A 
 3. The author’s assertion that “reformers should focus on codifying the existing systems wherever it is practical to do so” (lines 39–41) suggests that

A. in some instances, current systems are inadequate to meet the needs of a market economy
B. these systems are already written down and need only be enacted as law
C. where it is impractical to codify existing systems, countries should adopt American property law
D. the existing systems are superior to those currently in use in modern industrialized countries
E. improving education and medical care in these countries should take priority over reforming property laws

4 
 D 
 4. The term “dead capital” (line 24) refers to

A. loans that are never repaid
B. failed investments in new businesses 
C. cities ruined by over-industrialization
D. the proceeds of extralegal commerce
E. property passed from generation to generation

apovit · Answer

Hello Sajjad,

Please post the explanation for Q3 and Q4!
For Q4 Dead capital i selected "loan that are never repaid" but know i feel that "the other option means the money which is out of legal" in the sense it talks more about illegal activities i guess.
Got the third one wrong as well."codifying the existing systems" question.
Please post the explanation "codifying the existing "

blueshores · Answer

Kindly explain the answers for 1,3 and 4

anmit123 · Answer

Q1-
Answer is D because the author is talking about new ways (black market activity) of looking at the old age problem of 'What is it that keeps the developing world in
an apparent state of perpetual poverty'

Q2-
Answer is B since this is one of the problems as per Soto-'However, they deny earners the chance to accumulate assets recognized by law and thus prevent them from leveraging those assets to borrow.'

Q3-
Answer is A as per last para.

Q4-
Answer is D as per first para.

Sajjad1994 · Answer

Hello  apovit   blueshores

Official Explanation

1. The author’s primary goal in the passage is to

Explanation

Use POE. The author briefly mentions failed attempts, but it’s not the main point of the passage, so  (A)  is incorrect. Choices  (B)  and  (C)  are incorrect because the author doesn’t mention any criticisms or problems with the new theory.  Choice (D) is supported by the passage  because the author says that poverty is a perpetual problem and that de Soto’s approach is different, or novel. Choice  (E)  is incorrect because while it is briefly mentioned, it’s not the main point of the passage.

The correct answer is (D)

2. According to the passage, de Soto believes that the quickest way to address poverty in the developing world is to

Explanation

The passage states that de Soto feels it’s a problem that the poor are prevented from borrowing  (lines 15–16)  and that by  reforming…legal systems…to confer ownership through titling   (16–20)  the poverty would decrease.  This supports (B) . Some of the other answer choices are mentioned as problems in the developing world, but they aren’t attributed to de Soto.

The correct answer is (B)

3. The author’s assertion that “reformers should focus on codifying the existing systems wherever it is practical to do so” (lines 39–41) suggests that

Explanation

The passage indicates that many of the black markets are already systems but aren’t written into law.  Choice (A) is supported  by the quotation because it states  wherever possible , so there may be some places that do not have sufficient systems to make into law.  Choice (B) is a reversal —the passage states that the systems are not written. Choice  (C)  is incorrect because the author states that as a strategy failed.  Eliminate (D)  because the author makes no such comparison to those in industrialized countries.  Choice (E) is the opposite  of what is stated in the passage.

The correct answer is (A)

4. The term “dead capital” (line 24) refers to

Explanation

The passage refers  dead capital  back to these assets which ultimately are the  assets     work should be generating . The poor use black markets and thus do not receive the assets they would if their work were legal.  This supports (D)  because  extralegal  means outside of the law.

The correct answer is (D)

Hope it Helps

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What is it that keeps the developing world in an apparent state of per

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