Prep Test1- essay10

[kaijen]

Test1-Essay #10. 15(22742-!-item-!-188;#058&00154-00)

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.

Question #33. 154-01 (22788-!-item-!-188;#058&000154-01)

Which of the following best summarizes the central idea of the passage?

(A) A decrease in nongovernment borrowing or an increase in the availability of credit can eliminate or lessen the ill effects of increased borrowing by the government.
(B) Educating financiers about the true relationship between large federal deficits and high interest rates will make financiers less prone to raise interest rates in response to deficits.
(C) There is little support for the widely held belief that large federal deficits will create higher interest rates, as the main arguments given to defend this claim are flawed.
(D) When the government borrows money, demand for credit increases, typically creating higher interest rates unless special conditions such as decreased consumer spending arise.
(E) Given that most financiers believe in a cause-and-effect relationship between large deficits and high interest rates, it should be expected that financiers will raise interest rates.

Ans:(C)

Question #34. 154-03 (22834-!-item-!-188;#058&000154-03)

It can be inferred from the passage that proponents of the second argument would most likely agree with which of the following statements?

(A) The United States government does not usually care whether or not inflation increases.
(B) People in the United States government generally know very little about economics.
(C) The United States government is sometimes careless in formulating its economic policies.
(D) The United States government sometimes relies too much on the easy availability of foreign credit.
(E) The United States government increases the money supply whenever there is enough room for growth to support the increase.

Ans:(C)

Question #35. 154-07 (22880-!-item-!-188;#058&000154-07)

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.

Ans:(E)

Question #36. 154-08 (22926-!-item-!-188;#058&000154-08)

The author uses the term "admittedly" (see highlighted text) in order to indicate that

(A) the second argument has some truth to it, though not for the reasons usually supposed
(B) the author has not been successful in attempting to point out inadequacies in the two arguments
(C) the thesis that large deficits directly cause interest rates to rise has strong support after all
(D) financiers should admit that they were wrong in thinking that large deficits will cause higher inflation rates
(E) financiers generally do not think that the author's criticisms of the second argument are worthy of consideration

Ans:(A)

[kaijen]

Question #34. 154-03 (22834-!-item-!-188;#058&000154-03)

It can be inferred from the passage that proponents of the second argument would most likely agree with which of the following statements?

(A) The United States government does not usually care whether or not inflation increases.
(B) People in the United States government generally know very little about economics.
(C) The United States government is sometimes careless in formulating its economic policies.
(D) The United States government sometimes relies too much on the easy availability of foreign credit.
(E) The United States government increases the money supply whenever there is enough room for growth to support the increase.

Ans:(C)
如何知道careless?
是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.

[plilo]

應該是吧，我是從
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.
推出careless

[hwatai]

將就一下吧

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.
傳統上認為，美國的預算赤字問題會促使利率上升。有兩個理由。首先，當赤字提高時，政府會借更多的錢來彌補資金的短缺。結果，當信用供給(能被借到的金錢)與民間借貸兩者皆維持平穩時，信用價格(利率)就會上升。這是簡單的經濟原理，當財貨供給(信用)不變而財貨需求提高時，價格自然上升。第二個理由假設，政府傾向以增加貨幣供給額的方式來舒緩赤字窘境，但沒有思索經濟成長的空間是否足以避免在貨幣供給上升之時不會引發通貨膨漲。這個說法認為，預算赤字會導致通貨膨漲、利率上昂，進而讓早期借貸的資金，在到期時顯得微不足道。

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.
第一個論點有問題，他無法證實民間貸款與信用供給能維持平穩。民間貸款有時會減少，此時，單單靠政府的信用貸款，無法促使信用需求增加。相反的，當信用供給增加時，即使民間與政府的貸款額都提升，利率也難以走揚。

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.
第二個論點也不佳。只有當經濟成長空間不大時，藉由增加貨幣供給來解決赤字問題才會導致通貨膨漲。然而，由於一些財政官員誤以為赤字問題本身即會導致通膨，所以他們以提升利率為手段來應對(admittedly好像有點反諷)。然而，這個通膨結果，其實是人為疏失形成的，與赤字問題無關，要解決，只能靠教育，教育官員們對這個議題有多一點應有的認知。
（大部份考點在第二個論點,即第三段）

[icheng]

大感謝hwatai !

[dianechiu]

Question #36. 154-08 (22926-!-item-!-188;#058&000154-08)

The author uses the term "admittedly" (see highlighted text) in order to indicate that

(A) the second argument has some truth to it, though not for the reasons usually supposed
(B) the author has not been successful in attempting to point out inadequacies in the two arguments
(C) the thesis that large deficits directly cause interest rates to rise has strong support after all
(D) financiers should admit that they were wrong in thinking that large deficits will cause higher inflation rates
(E) financiers generally do not think that the author's criticisms of the second argument are worthy of consideration

Ans:(A)
想請問如何看出來的? 謝謝

[dibert8]

admittedly "誠然"

(B) 扯 author 後腿的言論必錯
(C) 沒有 thesis
(D) 用同一個字 (admit) 湊一句,不選
(E) financier 和 author 無關

[willyyang]

admittedly 的意思就和上面的大大講的一樣

focus不是放在 admittedly放的那個句子
而是下一句話

--> admittedly+句子+轉折字+句子[focus]

這裡的轉折字用的是 This effect, however, is due ...裡面的however

[chris8888]

The author uses the term "admittedly" (see highlighted text) in order to indicate that

(A) the second argument has some truth to it, though not for the reasons usually supposed
(B) the author has not been successful in attempting to point out inadequacies in the two arguments
(C) the thesis that large deficits directly cause interest rates to rise has strong support after all
(D) financiers should admit that they were wrong in thinking that large deficits will cause higher inflation rates
(E) financiers generally do not think that the author's criticisms of the second argument are worthy of consideration

Ans:(A)

使用消去法固然挑出A, 但是如何證明A是對的? 文章中怎樣說明?

[scottkidd]

The author uses the term "admittedly" (see highlighted text) in order to indicate that

(A) the second argument has some truth to it, though not for the reasons usually supposed
(B) the author has not been successful in attempting to point out inadequacies in the two arguments
(C) the thesis that large deficits directly cause interest rates to rise has strong support after all
(D) financiers should admit that they were wrong in thinking that large deficits will cause higher inflation rates
(E) financiers generally do not think that the author's criticisms of the second argument are worthy of consideration

Ans:(A)

使用消去法固然挑出A, 但是如何證明A是對的? 文章中怎樣說明?

小弟認為看最後一段作者態度的轉換應該可以推出：......problemetic.......However...... ==> 有負負得正的意思

[小花]

The author uses the term "admittedly" (see highlighted text) in order to indicate that

(A) the second argument has some truth to it, though not for the reasons usually supposed
(B) the author has not been successful in attempting to point out inadequacies in the two arguments
(C) the thesis that large deficits directly cause interest rates to rise has strong support after all
(D) financiers should admit that they were wrong in thinking that large deficits will cause higher inflation rates
(E) financiers generally do not think that the author's criticisms of the second argument are worthy of consideration

Ans:(A)

使用消去法固然挑出A, 但是如何證明A是對的? 文章中怎樣說明?

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.
第二個論點也不佳。只有當經濟成長空間不大時，藉由增加貨幣供給來解決赤字問題才會導致通貨膨漲。然而，由於一些財政官員誤以為赤字問題本身即會導致通膨，所以他們以提升利率為手段來應對(admittedly好像有點反諷)。然而，這個通膨結果，其實是人為疏失形成的，與赤字問題無關，要解決，只能靠教育，教育官員們對這個議題有多一點應有的認知。
（大部份考點在第二個論點,即第三段）

我也認為從態度下手
仔細看hwatai大牛的翻譯應該更能體會

[chris8888]

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.

是因為疏忽, 而不是這赤字本身的問題, 這應該說明了第二個論點有部份是對的,
(A) the second argument has some truth to it, though not for the reasons usually supposed
第二個論點有些許真實性, 然而第二段論點不可作為通常被認為應該的理由.
回應了第一句的admittedly, 誠然, 想當然耳. 理所當然(我認為應該是說, 在這些financiers推論下, 會這樣想是很正常的, 但是確是錯的, 後面一句補上進一步的說明)

[Kal-El]

請問一下
第一句話: Conventional wisdom has it that large deficits in the United States budget cause interest rates to rise.
結構是怎麼分析呢? it代誰呢?

謝謝...Orz

[irvinne]

其實我覺得#36可以從文章中讀出

#36 The author uses the term "admittedly" in order to indicate that
(A) the second argument has some truth to it, though not for the reasons usually supposed

對應到第三段: 作者的看法
Financing the deficit by increasing the money supply should cause inflation only when there is not enough room for economic growth.

換言之
(1) there is not enough room for economic growth:
increasing the money supply-->inflation
(2)there is room for economic growth:
increasing the money supply --x--> inflation

表示 the second argument (increasing the money supply-->inflation)
has some truth to it, though not for the reasons usually supposed


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.

財政官員們仍認為: increasing the money supply-->inflation
所以財政官員們才會 raise interest rates


This effect, however, is due to ignorance, not to the deficit itself...

ignorance: 財政官員們沒有注意到 "inflation的情況不一定會發生 "
只有當 there is not enough room for economic growth 之時
increasing the money supply 才會導致 inflation


我是這樣認為啦 如果有說錯的地方 也請好心的點出來 謝謝~

[Huang Hsin-Yi]

非常同意irvinne的分析