Economists studying emerging markets have noted that countries transitioning from centrally planned to market-based economies typically experience ini...
GMAT Craft and Structure : (Structure) Questions
Economists studying emerging markets have noted that countries transitioning from centrally planned to market-based economies typically experience initial high inflation followed by rapid currency devaluation during their first reform decade. Based on this observed pattern, financial analysts predicted that Moldavia, beginning its market transition in 2019, would likely follow a similar trajectory of monetary instability. Nevertheless, comprehensive data tracking Moldavia's economic indicators over five subsequent years shows remarkably stable inflation rates and steady currency appreciation, largely attributed to graduated liberalization policies rather than the shock therapy approach used by previously studied nations.
Which choice best describes the function of the underlined statement in the text as a whole?
It outlines a theoretical framework used by economists in order to establish the foundation for a policy recommendation that is validated by outcomes described later in the text.
It describes an economic phenomenon observed in certain contexts in order to show why an analytical approach described later in the text produced inconclusive results.
It establishes a pattern identified in specific situations in order to explain why analysts made a prediction that turned out not to be confirmed by data described later in the text.
It introduces a concept relevant to economic transitions in order to contextualize a debate about the effectiveness of that concept that is examined later in the text.
Looking at this question, I need to determine what function the underlined statement serves in the passage's overall structure.
Step 1: Decode and Map the Passage
Part A: Passage Analysis Table
| Text from Passage | Analysis |
|---|---|
| "Economists studying emerging markets have noted that countries transitioning from centrally planned to market-based economies typically experience initial high inflation followed by rapid currency devaluation during their first reform decade." |
|
| "Based on this observed pattern, financial analysts predicted that Moldavia, beginning its market transition in 2019, would likely follow a similar trajectory of monetary instability." |
|
| "Nevertheless, comprehensive data tracking Moldavia's economic indicators over five subsequent years shows remarkably stable inflation rates and steady currency appreciation, largely attributed to graduated liberalization policies rather than the shock therapy approach used by previously studied nations." |
|
Part B: Passage Architecture & Core Elements
Visual Structure Map:
[GENERAL PATTERN]
Economists observe: Transition countries → instability
↓
[SPECIFIC PREDICTION]
Analysts predict: Moldavia → same pattern
↓
[CONTRADICTORY REALITY]
Data shows: Moldavia → stability (different approach)
Main Point: Moldavia's economic transition defied typical patterns of instability, achieving stability through graduated rather than shock therapy policies.
Argument Flow: The passage establishes a recognized economic pattern, shows how analysts applied this pattern to predict Moldavia's trajectory, then reveals how actual data contradicted this prediction due to different policy approaches.
Step 2: Interpret the Question Precisely
This is a fill-in-the-blank question asking us to choose the best logical connector. The answer must create the right relationship between what comes before and after the blank.
Step 3: Prethink the Answer
- The underlined statement takes the general pattern established in the first sentence and applies it to make a specific prediction about Moldavia
- This prediction serves as a bridge between the observed trend and what actually happened
- The key function is that it shows why analysts expected one outcome, which makes the contradictory results in the final sentence more significant and surprising
- The right answer should explain how this statement connects the general pattern to a specific prediction that the subsequent data contradicts
It outlines a theoretical framework used by economists in order to establish the foundation for a policy recommendation that is validated by outcomes described later in the text.
✗ Incorrect
- Claims the statement establishes foundation for a policy recommendation that gets validated
- Wrong because there's no policy recommendation discussed, and the prediction isn't validated—it's contradicted by the data
It describes an economic phenomenon observed in certain contexts in order to show why an analytical approach described later in the text produced inconclusive results.
✗ Incorrect
- Says it shows why an analytical approach produced inconclusive results
- Wrong because the results aren't inconclusive—they clearly show stability, which definitively contradicts the prediction
It establishes a pattern identified in specific situations in order to explain why analysts made a prediction that turned out not to be confirmed by data described later in the text.
✓ Correct
- Accurately describes how the statement explains why analysts made a prediction based on the established pattern
- Correctly notes that this prediction "turned out not to be confirmed by data described later"
- Matches our prethinking perfectly—the statement bridges the general pattern to a specific prediction that gets contradicted
It introduces a concept relevant to economic transitions in order to contextualize a debate about the effectiveness of that concept that is examined later in the text.
✗ Incorrect
- Claims it introduces a concept to contextualize a debate examined later
- Wrong because there's no debate discussed in the passage—just a straightforward contradiction between prediction and reality