ST-6 (Critical Reasoning)
Critical Reasoning practice test covering argument analysis, logical flaws, inferences, and assumptions
Questions
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
- presenting examples
- explaining the reasons behind the sub prime meltdown in the US
- summarizing a number of similar happenings in one general pattern
- finding fault with the banking system
- discussing the origins of some recent economic phenomena
Directions: Read the passage/argument and answer the question that follows it.
Samantha Fox is an atrocious student. The professor, to whom she had submitted her term paper, awarded her six red marks.
The conclusion of the above passage suffers from which logical flaw?
- The writer fails to distinguish between the cause and the effect.
- The writer fails to define important terms.
- The writer uses an assumption to arrive at the conclusion.
- The writer makes a remark, not supported by facts.
- The writer is singling out Samantha Fox.
Directions: Read the passage/argument and answer the question that follows it.
Ten years back, very few people had heard the term 'social entrepreneur'. Now, to be a social entrepreneur is to be chased by politicians and businessmen alike for your potential to solve big social challenges in innovative ways. Governments, struggling to meet societal demands, are desperate for help from someone more creative than the typical bureaucrat.
It logically follows from the above discussion that
- social entrepreneurs have multiplied in number over the past ten years
- overall, there has been more awareness about and appreciation of the role performed by social entrepreneurs
- governments are facing more societal problems than they did ten years ago
- the typical bureaucrat is an uncreative individual
Directions: Read the passage/argument and answer the question that follows it.
Since the early 60s, the US divorce rate has doubled, the teen-suicide rate tripled, the violent-crime rate quadrupled, and the prison population quintupled. Besides, depression, anxiety and other mental-health disorders are rising, ensuring there will be plenty of melancholic types to compose poetry and music.
According to the author,
- depressive thoughts are responsible for creative pursuits
- it is not possible to write poetry or music unless one is depressed or anxious
- violent crime is a consequence of depression, anxiety and other mental-health problems
- depression and anxiety are facilitating factors in giving rise to creativity in music and poetry
- more divorces are responsible for more imprisonments in the US
Directions: Read the passage/argument and answer the question that follows it.
In the olden days, in Indian society, college teachers, bankers, and clerks were mainly males; these professions got relegated in monetary returns and social status when they became significantly populated by females. Consequently, if females occupy the majority positions in professions dominated by males now, e.g. transportation, engineering, and investment banking, the monetary returns and social standing of these professions is bound to take a dip.
The argument given above suffers from the predominant flaw of being
- an attempt at being chauvinistic
- an attempt to justify the poor status of some professions by alluding to gender differences
- an instance of confusing cause and effect
- an attempt at extrapolating a one-off instance to explain a fairly well-generalized phenomenon
- an effort to justify the domination of these professions by males.
Directions: Read the passage/argument and answer the question that follows it.
Many social scientists believe that affirmative action is a good way to improve the socio-economic status of disadvantaged groups in the society. Based on their recommendation, the Arizona Governor has decided to put in place a system whereby every public and private organization would be mandated to recruit a minimum of 10% of all new recruits from these segments of society.
Which of the following, if true, would most strengthen the social scientists' argument?
- The workforce participation rate of these disadvantaged groups has consistently fallen over the past 50 years.
- The disposable incomes of disadvantaged groups have not shown any rise across the past 50 years of economic history.
- Ever since the policy of having a 10% quota in jobs for disadvantaged groups has been launched in Alabama, there has been a marked improvement in the legally declared incomes of such people.
- The public and private organizations across Arizona believe that the policy will achieve its goals.
- There is an inverse relationship between one's urge for betterment in life and ease of getting a job.
Directions: Read the passage/argument and answer the question that follows it.
Studies show that most people on road may be apparently compliant, but they do not bother too much about jumping a traffic red light if they believe no one is watching them. Possibly, the lack of fear of being caught is the major culprit in such cases.
Which of the following best weakens the above conclusion?
- People more often jump red lights than they take wrong U-turns on the road.
- The criminal justice system in case of traffic offences is so flawed that conviction rate is not more than 1%.
- The police department plans to hike the fine from $40 to $100 for each such offense.
- Several traffic lights were recently found to be defective in Washington.
- The traffic department has commissioned a study on why people routinely jump traffic red lights on the road.
Directions: Read the passage/argument and answer the question that follows it.
As per India Census 2001, the total number of religious shrines in India is more than that of all educational institutions put together. Also, it has got the least public sector worker productivity across the globe, with an average worker working for not more than 150 days a year. Therefore, it can be reasonably concluded that too much preoccupation with religious activity hinders a country's productivity performance.
The most significant flaws in the above argument are that
It is based on an example taken from one country onlyIt makes a cause and effect connection in the absence of any concrete proof justifying itIt makes an unjustified appeal to statistics.
Choose your answer from the following combinations.
- 1 and 3
- 1, 2 and 3
- 2 only
- 1 only
- 1 and 2
Directions: Read the passage/argument and answer the question that follows it.
The real estate sector in many parts of the USA is witness to a significant slump, which is attributed to high home loan mortgage rates by most realtors. They believe that in order to ease the situation, the Federal Reserve should step in and improve market liquidity so as to enable people to buy houses at affordable prices.
Which of the following, if true, would serve the most to weaken the argument offered by realtors?
- Home loans have shown a significant upswing after the mortgage rates were softened by many banks in some states.
- Several bankers believe that mortgage rate is a major factor affecting a customer's willingness to buy a home.
- Prospective home buyers buy homes to satisfy their desire for a world of their own.
- Many studies done by the University of Wisconsin show that the demand for home loans is not price elastic.
- Enough number of houses is available for sale especially after they were resumed by the banks after default on the mortgage taken by their owners.
Directions: Read the passage/argument and answer the question that follows it.
The President of Harvard Business School, while announcing his proposals for a fee-hike, said, We plan to have a $10000 per year per student hike this time. The students never protested the last hikes of $3500 earlier and $ 1500 thereafter.
Assuming the above to be true, which of the following can be inferred with validity from the information given above?
The increase was felt to be justified by the students because of increased operational costs.Students' indifference was responsible for the failure of students to protest the previous hikes.There is no organized students' union to take up the students' cause and hence there will be no protests over the new hike.Students are not likely to demonstrate over the new fee hikes.
- 1 only
- 4 only
- Either 1 or 2
- 1, 2 and 4
- 1, 2, 3 and 4
Directions: Read the passage/argument and answer the question that follows it.
An advertisement in a daily newspaper
'About half of the people who come to our investor education camp today come in a Mercedes car as compared to the Ford Punto they came in first time a year back. They attend clubs jazzier than they did two years ago. Isn't it high time you too signed up for our Investor Education Camp right now?'
The ideas contained in the above advertisement are based on which of the following questionable assumption(s)?
I. Coming in a Mercedes car as compared to a Ford Punto is a consequence of an investor attending the Investor Education Camp
II. Readers would like to become part of clubs which are more elite than the ones they are part of at the moment
III. A Mercedes car is perceived to be better than a Ford Punto by newspaper readers
- All I, II and III
- Both I and III
- I, but not II and III
- Both II and III
- None of these
Directions: Read the passage/argument and answer the question that follows it.
International organisations, such as the World Bank and the IMF, have been exaggerating the size of the Chinese economy in the past. If GDP of China is converted into dollars using market exchange rates, it amounted to $2.7 trillion last year, only one-fifth of America's $13.2 trillion, and the fourth-largest in the world. But a dollar buys a lot more in China than in America because prices of many non-traded goods and services tend to be much lower in poor economies.
Which of the following would best complete the above paragraph?
- Therefore, an average Chinese is richer than an average American.
- Thus, what finally matters is the number of dollars in your hands.
- Therefore, we can reasonably expect that converting a poor country's GDP into dollars at market exchange rates understates the size of its economy.
- Hence, all such comparisons need to account for those non-traded goods and services.
- Therefore, America is not as big as is thought to be.
Directions: Read the passage/argument and answer the question that follows it.
According to the World Health Organisation, for India as a whole, the average Health Status Index is 550 (a composite index calculated by it), but children born in Punjab will have an average index of 900, and those born in Goa, 850. If a child is born in Punjab, therefore, it would have much better health than if it were born in Goa.
Which of the following, if true, would most seriously weaken the conclusion drawn in the passage?
- Health experts do not believe that moving to Punjab will substantially improve the average Goan’s health status.
- The Goan government has alleged that the health statistics given for the state are flawed.
- The better health ascribed to Punjab’s current population is mostly due to genetic reasons.
- Forty percent of all Goans are having a health index of more than 1000 points.
- Most Punjabis have a diet better than most others across the rest of the country.
Directions: Read the passage/argument and answer the question that follows it.
The Federal Insurance Corp, which acts as the guarantor for all bank deposits in the US, estimates that over 1.5 million households will eventually be unable to meet their loan repayments during the next 5 years. The prices are falling and more forced sales due to failure of loan repayments will increase the already burgeoning stocks of unsold houses, which currently number upwards of 5 million.
The conclusion given in the first line of the paragraph above is based on which of the following assumptions?
- More people are taking loans to finance their purchase of dwelling units.
- There will not be any significant change in the disposable incomes and liabilities of those taking home loans in the US.
- The Federal Insurance Corp. will remain the sole guarantor of all future home loans in the US.
- Defaults on account of inability to service home loan repayments will increase in the foreseeable future.
- There is, in general, a recession in the US economy and the housing sector just tends to mirror this overarching trend.
Directions: Read the passage/argument and answer the question that follows it.
Consumers love to bargain. But retailers appreciate that they will sometimes frown at a slightly cheaper version of a more expensive item, even if the two are identical. It goes to suggest that something is at play in the consumer's mind beyond simple appreciation of the intrinsic qualities of a particular product.
The conclusion of the above passage is best supported by which of the following?
- Psychological researchers have discovered that most consumers, while making a particular purchase, mostly go by the stated benefits of the product.
- Mall owners report that many consumers pay great attention to the price of an item while purchasing it.
- A reliable, representative psychographic research on consumer behaviour shows that for most customers, the price label is a proxy for product quality.
- A nationwide survey among prospective consumers shows that they would love to purchase a home solely on the basis of how it is priced.
- Some consumers are attracted to the premium tag attached to a product in terms of its affordability and prefer to buy it only due to this factor.