While new census data reveals that unemployment numbers are more dire

Question

While new census data reveals that unemployment numbers are more dire than was previously suspected, it is not clear that the forecast for American entrepreneurship is equally alarming. An article in a major national newspaper suggests that the contraction in hiring at existing companies might result in more new companies being founded. College graduates, unable to find traditional jobs, instead opt to start their own businesses. Where a recession may seem an unpropitious time for such a historically risky endeavor, with no better options, would-be entrepreneurs have little to lose. Unfortunately, this situation does not necessarily impact the economy positively. Though the average number of new businesses started per year has been higher during the recession than it was before, the proportion of high-value businesses founded each year has declined. So even if a business manages to stay solvent, it may not bring significant returns. Also, because of an inevitable dearth of angel investors and venture capitalists, many new entrepreneurs are putting their own money on the line. In certain ways, the choice between accepting a traditional job and starting a business is not unlike the choice between renting and buying property. The latter requires a significant initial outlay and carries heavier risks, but the rewards can be equally substantial.    1 
 1. The primary purpose of the passage is to

(A) propose changes in the way the public generally interprets census data
(B) maintain that college students should form their own companies, especially during economic recessions
(C) present a nuanced view of a contemporary economic issue
(D) evaluate the viability of low- versus high-value businesses under various environmental conditions
(E) draw an analogy between career decisions and real estate decisions, specifically the choice to rent or buy property

2  
 2. According to the passage, the reason that many college graduates are choosing to launch their own companies in the present economic climate is that

(A) they are hampered by the difficulty of finding outside investors
(B) they cannot easily find positions typically open to workers of their experience
(C) the prevalence of low-value companies has increased
(D) they are forced to decide between renting and buying property
(E) forecasts of the unemployment rate are likely to become less dire in coming years 
 
 3  
 3. It can be inferred from the passage that over the course of the recent recession, the number of American high-value businesses founded per year

(A) has fallen sharply
(B) has fallen moderately
(C) has risen sharply
(D) has risen moderately
(E) may have either fallen or risen

Sajjad1994 · Answer

OE

1. The primary purpose of the passage is to

The passage presents positive and negative views on the  “forecast for American entrepreneurship.”  The author is careful to present his or her arguments fairly and with some reservations (e.g.,  “it is not clear that,” “suggests that,” “may seem” ). Ultimately, the view is balanced, or  “nuanced,”  so choice  (C)  is correct.

Regarding  choice (A) , the author does not  “propose changes.”  Regarding  (B) , the author never argues that any group of college students should (or should not) form their own companies. If anything, the author offers both sides of the issue, leaving it up to individuals to decide. Regarding  (D) , the author offers one fact about the varying rates at which businesses of two types (low value and high value) are founded. However, the author never evaluates the viability (or likelihood of success) of these types.

As for  (E) , the analogy drawn in the last two sentences is not the main point of the passage; it is a final observation, one that sheds light on the issue, but this analogy is not the primary purpose for which the passage was written.

Answer: C

Sajjad1994 · Answer

OE

2. According to the passage, the reason that many college graduates are choosing to launch their own companies in the present economic climate is that

The question asks what is true  “according to the passage.”  There should be direct proof for the correct answer in the passage text. Specifically:  “College graduates, unable to find traditional jobs, instead opt to start their own businesses,” (lines 4–5) . Correct  choice (B)  matches the idea that college graduates are  “unable to find traditional jobs.”  Regarding  (A) , college graduates who start their own businesses may indeed be hampered by a lack of access to outside investment, but this is not offered as the reason that they start such businesses. Be careful of answer choices that restate truths from the passage but do not answer the specific question posed! As for  (C) , it may be true that lowvalue companies have become more prevalent, but again, this does not answer the specific question. Regarding  (D) , the choice between renting and buying property is offered only as an analogy, not as a literal choice for college graduates (let alone as the reason for their entrepreneurial decisions). Regarding  choice (E) , the passage says nothing about how forecasts of the unemployment rate are likely to evolve.

Answer: B

Sajjad1994 · Answer

OE

3. It can be inferred from the passage that over the course of the recent recession, the number of American high-value businesses founded per year

This question asks what  “can be inferred”  about the number of American high-value businesses; that is, what else must be true based upon the evidence given in the passage? The answer choices all have to do with how this number has changed (or may have changed) during the course of the recent recession. In particular, when you encounter mathematical language, take extra care to make the argument airtight mathematically. Search for the key phrase  “high-value businesses”: the passage states that “the proportion of high-value businesses founded each year has declined.”  Watch out! A proportion is not the same as a number. The proportion has fallen, but the overall number of new business starts has been higher over recent years. If the overall number is up, but the proportion is down, it is unknown whether the absolute number of high-value businesses is up or down; this is exactly what  choice (E)  indicates.

Answer: E

While new census data reveals that unemployment numbers are more dire

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