The debate comes down to B and C.
For B, I eliminated basing on the "average population." remember, the question stem never actually mentions what is true about the average population. We only know that if 100 ppl never smoked crack, only 5 would get falsely tested positive. but in 100 crackhead, 99 would get tested positive. Do we know the average number of crackhead among society? No. That would be something like in American society, there are on average 8 crackheads among 100 people. We don't have this information. So we cannot say that the flaw is applying the stats of average member to every member of the society, since there is no mentioning of what is the average.
C catches the flaw. My first reaction was that wait a minute, if the vast majority who got positive are confirmed crackheads, what if everyone doesn't smoke crack in this perfect society? Then according to the stem, 5 in every 100 ppl who never smoked crack will get tested positive, then you have the vast majority who got tested positives are not crackheads: they all got falsely tested positive and never smoked before. Well let's increase that to let's say there are an average of 7 crackheads among 100 people. Well still, the amount of crackheads are still not the vast majority of those tested positive. From this reasoning, we then know that we need to know how much people are actually crackhead in among the general population, then we can know whether the VAST MAJORITY of the people who test positive are crackheads. Let's say we are in NYC, and we have about 60 out of 100 on average are crackheads (maybe or maybe not exaggerated). Then the argument might actually make sense according to the 100 tested 99 positive stat. Without the average proportion of crackheads, we cant draw the conclusion about how many will get accurately tested positive in a society.
Hey I think the problem with AC D is that the comparative part. From the passage, I dont think we can comfortably infer that either method of bankruptcy law can lead to discharging more proportion of debts. Yes, as you said, there might be more people getting benefitted in the method the guy Korokin advocates, but at the same time, do we know that it gives back MORE, GREATER PROPORTION of debts? We don't know, we only know that maybe, just maybe, debts are reaching more people, more than just the creditors. Plus, the most fatal mistake might be that we are not sure whether the author agree with this or not. Author does not present an opinion on this comparative issue, instead the author is quite critical to Korokin's method.
E is right for the same reason that you mentioned, but I think it stands pretty good. If the creditors charge more for credits, we can infer that the price for people to borrow money, aka more expensive for people to borrow money and establish business. And we know that the author would agree with this, since the last paragraph was the author's criticism on the Korokin's method.
Hope this helps.