finding the conclusion

[guest]

Bank Depositors in the United States are all financially protected against bank failure because the government insures all individuals' bank deposits. An economist argues that this insurance is partly responsible for the high rate bank failures, since it removes from the depositors any financial incentive to find out whether the bank that holds their money is secure against failure. If depositors were more selective, then banks would need to be secure in order to compete for depositor's money.

The economist argument makes which of the following assumptions?


I am a bit confused as to whether the conclusion is: 'insurance is partly responsible for the high rate bank failures' or 'depositors were more selective, then banks would need to be secure in order to compete for depositor's money' or if both are conclusions of the economist. Our class instructor said that 'insurance...' is the conclusion and the other is the premise, but I am still confused. I don't think one can apply the 'X therefore Y' test to this problem.


thanks.

[Hei]

I think that usually a CR statement in GMAT consists of 3 pieces: evidence(s), assumption(s) and conclusion(s).

The statement above has:
- Conclusions:
1) "this insurance is partly responsible for the high rate bank failures."
2) "If depositors were more selective, then banks would need to be secure in order to compete for depositor's money."
- Evidences:
1) "Bank Depositors in the United States are all financially protected against bank failure because the government insures all individuals' bank deposits."
2) "it(the insurance) removes from the depositors any financial incentive to find out whether the bank that holds their money is secure against failure."

So your X should contain the evidences and the missing assumptions; Y should be the conclusions above.

[StaceyKoprince]

Hey, guys - please don't forget to cite the source (author) for your problem. Instructors can't comment until the source is posted (and uncited questions will eventually get deleted, as we can't risk hosting copyrighted material without permission).