Reading Comprehension

Source: Veritas Prep [800score]

Japan is making a comeback. After 15 years in a weak economic state, signs of life are finally beginning to show. Deflation is over; prices are no longer falling.

Japan is the second largest economy in the world and its recent growth is very good news. The rest of Asia and manufacturers in America will undoubtedly benefit. American consumers had been carrying the majority of the responsibility to keep the global economy moving. Now Tokyo appears to be engaging in real consumption: an indicator that renewal is upon the Japanese economy.

Japan's economy barely grew at all in the 1990s. Deflation plagued the country for years with plummeting prices, which reduced wages and corporate income and made debt all the more heavy. Real estate prices fell for 14 years in a row, amounting to a decline of about 60% over that time. The Nikkei index of stock prices fell from an all-time high of 39,000 to below 8,000 before climbing back to about 17,000.

It was a bizarre time. Japan lowered interest rates again and again until they hit zero in 2001. Bond prices fell so low that by 2003, even 30-year government bonds yielded less than 1%. Economic historians were known for saying that the cost of borrowing money had never been so low - not in the financial transactions of ancient Greece or Rome or China, or anywhere else in recorded history. And even so, zero interest rates continued. Only now are Japan's bankers talking about the possibly of lifting rates by a quarter of a percent in the coming months.

This month, Japan's central bank finally put a stop to 'quantitative reasoning,' a 50-year old policy of pushing excess money into the financial system. Japan was able to do so because consumer prices have recently begun to rise, slowly but surely.

Japan's population is aging and its public debt will continue to trouble the country in the long-term. But in the short term American politicians will almost certainly once again begin fussing about the miracle of the Japanese and complaining about Japan grabbing up U.S. properties.

The author uses the example of ancient Greece or Rome or China (highlighted text) in order to:

A. highlight the gravity of Japan's economic stagnation. *
B. show that ancient economies were superior to those of today.
C. expose the dearth of financial investment opportunities available.
D. show that Japan's economic situation is primitive and undeveloped.
E. compare the ways people borrow money in different cultures.

I would like to know the explanation of A and B.

Japan's economy barely grew at all in the 1990s.
It was a bizarre time.
These 2 paragraphs indicate A

"had never been so low" is the indicator of A being the answer.


B, just puts things very mildly, and shows Greece,Rome... superior... it does not give the reasoning, how or why or makes clear why the author put these ancient economies there in the first place!

Hope this helps!!

arora007 wrote:Japan's economy barely grew at all in the 1990s.
It was a bizarre time.
These 2 paragraphs indicate A

"had never been so low" is the indicator of A being the answer.


B, just puts things very mildly, and shows Greece,Rome... superior... it does not give the reasoning, how or why or makes clear why the author put these ancient economies there in the first place!

Hope this helps!!

Good Explanation
But I am still in doubt that why B is wrong.

ok.. if you cannot buy that... and you are still very much in between A and B. I have one more mechanism to thrash B out...

"show that ancient economies were superior to those of today"

ancient economies were superior only to Japan, nothing has been said about other world economies...

Weak in CR, 1st quest attempted in 3 mnths.B is out just because ancient economies are being used as a benchmark so that rates of interest for borrowing money can be compared because rates of interest have been assumed to be very low during ancient times.
Nothing related to superiority