Reading Passage Question
In establishing economic policy, policy makers usually rely on pre-existing models of development and tend to adopt the dominant development theory of their era. With dominant theories quickly losing credibility (5) as a result of flaws exposed through their application, alternative theories often take hold. Such intellectual shifts are welcome in academia, but can adversely affect the economic development of developing nations. Unlike most first-world countries whose economic (10) policies are subject to scrutiny by democratically-elected government officials and tend to change gradually, developing nations can be easily compelled to accept structural adjustment policies by international regimes such as the World Trade Organization (WTO) and the (15) International Monetary Fund (IMF). In the early 1980’s, for instance, the IMF forced many developing countries to accept neoclassical policies in return for funding. This quickly devalued the states’ currency, cut government spending, raised prices, and phrased out agricultural (20) subsidies. By compelling developing countries to abolish trade protections and participate in free trade regimes, the IMF left those markets vulnerable to exploitation and predation.
“In establishing economic policy, policy makers usually rely on pre-existing models”- is a GMAT reading comprehension passage with answers. Candidates need a strong knowledge of English GMAT reading comprehension.
This GMAT Reading Comprehension consists of 2 comprehension questions. The GMAT Reading Comprehension questions are designed for the purpose of testing candidates’ abilities in understanding, analyzing, and applying information or concepts. Candidates can actively prepare with the help of GMAT Reading Comprehension Practice Questions.
Solution and Explanation
Question 1
1. Which one of the following best describes the organization of the passage?
(A) A predicament is outlined, factors leading up to the predicament are scrutinized, and an example of the predicament is offered.
(B) A phenomenon is described, an implication of the phenomenon is suggested, and an illustration of that implication is offered.
(C) A problem is presented, an example of the problem is provided, and a course of action addressing the problem is suggested.
(D) A generalization is made, evidence supporting the generalization is presented, and a particular instance illustrating the generalization is evaluated.
(E) A particular worldview is explained, its shortcomings are discussed, and an evaluation of these shortcomings is presented.
Answer: B
Explanation: Option B best describes the organization of the passage. As politicians' adaptation of the dominant theory is a phenomenon. The implication of the phenomenon negatively impacts the economies of emerging countries. As an illustration of the implication, consider how it was devastating for many nations when the IMF pushed them to adopt neoclassical policies. Therefore option B choice is the answer.
Question 2:
2. Which one of the following best describes the relationship of the second paragraph to the passage as a whole?
(A) It predicts future development.
(B) It qualifies an assertion made earlier by the author.
(C) It introduces a hypothesis that the author later expands upon.
(D) It clarifies a claim made in the preceding paragraph.
(E) It presents a counterexample to a general thesis.
Answer: D
Explanation: This passage lacks para delineation, possibly due to formatting problems. But we know what the two sides of the paragraph are. a) there is an issue for countries with established economies. b) what happens in developing (non-established economy) countries. The right response is option D. Let us examine the argument - but it can have a negative impact on the economic development of emerging countries. So, that was the claim. The author then says in the second paragraph, "the IMF left those markets exposed to exploitation and predation." So that is the structure of the second paragraph, which clarifies the previous paragraph's claim.
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