【GMAT考满分阅读RC题库】Conventional wisdom has it that large deficits in _真题_答案

PREP07 Test 1 - 阅读RC - 35

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Conventional wisdom has it that large deficits in the United States budget cause interest rates to rise. Two main arguments are given for this claim. According to the first, as the deficit increases, the government will borrow more to make up for the ensuing shortage of funds. Consequently, it is argued, if both the total supply of credit (money available for borrowing) and the amount of credit sought by nongovernment borrowers remain relatively stable, as is often supposed, then the price of credit (the interest rate) will increase. That this is so is suggested by the basic economic principle that if supplies of a commodity (here, credit) remain fixed and demand for that commodity increases, its price will also increase. The second argument supposes that the government will tend to finance its deficits by increasing the money supply with insufficient regard for whether there is enough room for economic growth to enable such an increase to occur without causing inflation. It is then argued that financiers will expect the deficit to cause inflation and will raise interest rates, anticipating that because of inflation the money they lend will be worth less when paid back.

Unfortunately for the first argument, it is unreasonable to assume that nongovernment borrowing and the supply of credit will remain relatively stable. Nongovernment borrowing sometimes decreases. When it does, increased government borrowing will not necessarily push up the total demand for credit. Alternatively, when credit availability increases, for example through greater foreign lending to the United States, then interest rates need not rise, even if both private and government borrowing increase.

The second argument is also problematic. Financing the deficit by increasing the money supply should cause inflation only when there is not enough room for economic growth. Currently, there is no reason to expect deficits to cause inflation. However, since many financiers believe that deficits ordinarily create inflation, then admittedly they will be inclined to raise interest rates to offset mistakenly anticipated inflation. This effect, however, is due to ignorance, not to the deficit itself, and could be lessened by educating financiers on this issue.

Which of the following claims concerning the United States government's financing of the deficit does the author make in discussing the second argument?

A The government will decrease the money supply in times when the government does not have a deficit to finance.
B The government finances its deficits by increasing the money supply whenever the economy is expanding.
C As long as the government finances the deficit by borrowing, nongovernment borrowers will pay higher interest rates.
D The only way for the government to finance its deficits is to increase the money supply without regard for whether such an increase would cause inflation.
E Inflation should be caused when the government finances the deficit by increasing the money supply only if there is not enough room for economic growth to support the increase.

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正确答案: E

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Yuriyam

可能只有我写这题的时候把second argument 看出second paragraph把

2017-11-18 18:52:32 IP属地：福建举报

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bernardx 回复 Yuriyam

我也看花眼了

2021-06-04 23:12:34 IP属地：局域网举报

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烦恼会解决烦恼

做这篇文章的时候觉得我可能是个智障吧

2017-11-09 19:42:46 IP属地：浙江举报

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Conquer96520

哈哈经济学专业的学生很容理解这文章的思路

2017-09-09 21:52:32 IP属地：吉林举报

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lewy99999 回复 Conquer96520

英专学生表示中文也看不懂

2019-10-04 13:38:22 IP属地：北京举报

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toujiejie

改写 Financing the deficit by increasing the money supply should cause inflation only when there is not enough room for economic growth

2016-05-10 17:28:48 IP属地：湖北举报

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utatababara

C到底错在哪儿哇？

2019-06-04 11:40:31 IP属地：北京举报

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sunnyposy

不明白问题到底啥意思

2014-04-11 10:25:35 IP属地：北京举报

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Corla

问的是作者的观点………

2015-07-17 19:27:00 IP属地：局域网举报

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alice94

问的是作者的观点……… 选E 文中的观点是D

2015-09-29 12:01:59 IP属地：上海举报

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evanhoo

……玛德智障我也看成第二段了

2018-01-02 15:03:49 IP属地：湖南举报

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西門

A. decrease the money supply (x) 文章沒提
B. whenever the economy is expanding (x) 非作者的argument
C. nongovernment borrowers (x) 非第2個argument的內容
D. only way (x)
E. only if there is not enough room (o)

2019-12-22 16:15:37 IP属地：局域网举报

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正确率： 78%

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PREP07 Test 1

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PREP07 Test 1
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SET 1

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题目来源1:PREP07 Test 1

GMAT 考满分题库

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Yuriyam

bernardx 回复 Yuriyam

烦恼会解决烦恼

Conquer96520

lewy99999 回复 Conquer96520

toujiejie

utatababara

sunnyposy

Corla

alice94

evanhoo

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