PT12.S4.Q11

PrepTest 12 - Section 4 - Question 11

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Household indebtedness, which some theorists regard as causing recession, was high preceding the recent recession, but so was the value of assets owned by households. ███████████ ██ ████ ██ ███ ██████ ████ █████ ██ █████ ████████ ███████████ ███ ████ ██ ███ ████ ███ ████ ██ ██████████ ███████████ ████ █████████ ████ ██████ █████ ████ ████ ███ █████ ██ ███ █████████ ███████ ████ █████ ███████ ██████████ ██████████ █████ ████ █████████ ████████ ██ █████ ██ ███ ███ █████ █████ ███ █████ ████████ ████ █████ ██████ ████ ██████ ██ ████████ █████████ ████ ██ █████ █████ ████████ ██████ ████ ████ ████ ████ ██ ███ █████████ █████ █████ █████ ██ ███ ████ ██ █████ ███████ ███████ ██████████ ███ ████ █████ ████ ███ ██████████

Summary

This is one of those long stimuluses which can make your eyes glaze over if you’re not careful. It throws a lot of information and language at us, but if we are able to focus on the overall structure and points of the argument, the question is actually fairly easy. The first sentence tells us that households having death is considered a possible cause of the recent recession, and that household assets was also high prior to the recession. Ok, so maybe debt was the problem but households overall actually had a lot of wealth. The next sentence gives us some more insight into how we can break this information down more meaningfully; was it poor or rich households that were carrying all the debt? If poor people were submerged in debt then that would support household debt being the cause. However, we learn that money is generally only lent to those with assets, and therefore it must have been the wealthy carrying the debt. From all this information, the author concludes the real cause must lie elsewhere. The answer choices are more detailed conclusions we can add on to this argument. The conclusion that would follow from the stimulus information with the least assumptions required will be the correct answer.

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11.

Which one of the following, ██ █████ █████ ███ ████ █████ ██ ███ █████████

a

Prior to the ██████ ██████████ █████████████ ██████████ ████ ██████ ████ ████ ████ ███ █████ ██ ████████ █████████

b

The total value ██ ███ ███████████ █████████ ████ ██ ████████ ██ ███ █████ █████ ██ ██████ ████ ██ ███████████

c

Low-income households somewhat █████████ █████ ████████ ██████ ███ ██████ ██████████

d

During a recession ███ ████████ ███████ ██████ █████ ████ ██ █████ ██ ████████ ███████

e

Household debt is ███ ████████ ██ ████ █████ ██████ ██ ██████ ███ ████████

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