QUESTION TEXT: Several years ago, most of one country’s…
QUESTION TYPE: Sufficient Assumption
CONCLUSION: The agency is unlikely to achieve its goal.
REASONING: The agency is selling the banks. The banking system will not be strengthened if the former owners buy them back.
ANALYSIS: Most of this argument is fluff. The argument starts after the word “but”: the banking system will be weaker if the former owners buy their banks back. Pay attention to words like “but”, they show the author’s opinion and evidence.
So we know exactly one reason that the plan could fail: the former owners buy back the banks. You can put this into a conditional statement:
Buy Back –> Fail
To prove that the plan will fail, we just need to show that the sufficient condition will happen.
- The stimulus doesn’t mention whether all the banks must be sold. Maybe the plan can succeed even if some banks don’t find buyers.
- The stimulus doesn’t say it’s a problem for one owner to buy multiple banks. Maybe there are thousands of banks for sale. It surely wouldn’t be a problem if one owner bought two small banks.
- This answer aims to trap you because you assumed that the no one will buy banks unless the economy is stronger. The argument didn’t mention the economy. We have no idea how the economy relates to the banking system.
- The banks sold by the agency failed. The government had to buy take them over. The country’s other banks didn’t fail, so presumably they will be stronger. It’s reasonable that the failed banks will be weaker for some time.
- CORRECT. This shows there are two possibilities: either the banks won’t sell, or the owners will buy them back. Either option means the plan failed.
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