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ST-6 (Critical Reasoning)

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Multiple Choice

Directions: Read the passage/argument and answer the question that follows it.

Although the minutiae vary a lot, banking crisis follows the same story. The precursors to each such story are rising home and equity prices, a rise in capital inflows engineered by foreign investors, a boom in debt and 'just before the doom' an inverted V-shaped path for the economy, with growth first picking up and then faltering. The years just prior to the US sub prime meltdown fit this template remarkably well.

The author is primarily trying to convince us by

  1. presenting examples
  2. explaining the reasons behind the sub prime meltdown in the US
  3. summarizing a number of similar happenings in one general pattern
  4. finding fault with the banking system
  5. discussing the origins of some recent economic phenomena
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