Conc : Insurance is partly responsible for the high rate of bankfailures.
Note - Keep in mind the conclusion is regarding the insurance. The remaining statements in the argument, post the conclusion are premises that support the economist's position.
(A) Bank failures are caused when big borrowers default on loan repayments - States another factor causing bank failures. Doesn't justify economist viewpoint.Drop
(B) A significant proportion of depositors maintain accounts at several different banks. - The logical implication being that depositors protect themselves against bank failures if the govt. didn't step in. But that assumption breaks, since government does provides insurance against bank failure. This information doesn't help with the economist'sviewpoint. Drop
(C) The more a depositor has to deposit, the more careful he or she tends to be in selecting a bank - Explains a factor that makes depositor more selective. However, doesn't justify the cause-effect link between insurance
...
Note - Keep in mind the conclusion is regarding the insurance. The remaining statements in the argument, post the conclusion are premises that support the economist's position.
(A) Bank failures are caused when big borrowers default on loan repayments - States another factor causing bank failures. Doesn't justify economist viewpoint.Drop
(B) A significant proportion of depositors maintain accounts at several different banks. - The logical implication being that depositors protect themselves against bank failures if the govt. didn't step in. But that assumption breaks, since government does provides insurance against bank failure. This information doesn't help with the economist'sviewpoint. Drop
(C) The more a depositor has to deposit, the more careful he or she tends to be in selecting a bank - Explains a factor that makes depositor more selective. However, doesn't justify the cause-effect link between insurance
...
Statistics : Posted by stackskillz • on 08 May 2008, 12:45 • Replies 18 • Views 74862
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