Question 82·200 Super-Hard SAT Reading Questions·Expression of Ideas
While researching a topic, a student has taken the following notes:
- A national loan-guarantee program reimbursed participating banks for some losses on new loans to firms with fewer than 50 employees.
- Researchers compared firms with 45–49 employees, which qualified for the guarantee, with firms having 50–54 employees, which did not qualify but were similar in size.
- Before the program began, the two groups received nearly identical average interest rates at both participating and nonparticipating banks.
- During the study period, an economy-wide benchmark interest rate fell by 0.5 percentage points.
- At participating banks, qualifying firms’ interest rates subsequently fell by 0.7 percentage points relative to rates for just-ineligible firms.
- At nonparticipating banks, the interest-rate gap between the two groups remained essentially unchanged.
The student wants to explain how the study’s comparisons support the conclusion that the loan guarantee—not merely the economy-wide decrease in benchmark rates—lowered borrowing costs for qualifying firms. Which choice most effectively uses relevant information from the notes to accomplish this goal?
For rhetorical-synthesis questions involving a proposed explanation, first identify the competing explanations in the student’s goal. Then select the findings that distinguish between them, paying close attention to comparison groups and words such as “relative.” Choose the option that preserves the evidence’s exact scope and avoid choices that convert relative changes into absolute ones or claim that the evidence proves more than it does.
Hints
Identify program exposure
Consider the two conditions a loan must meet to be covered by the program: the firm must qualify, and the bank must participate.
Preserve the type of change
Notice that the 0.7-percentage-point figure describes a change relative to another group, not necessarily an absolute decrease that can be directly compared through subtraction.
Use the control comparison
Ask what happened to the eligibility-based rate gap at banks that did not participate in the program.
Step-by-step Explanation
Identify what must be distinguished
The student must distinguish the guarantee’s possible effect from the effect of the benchmark-rate decrease, which occurred throughout the economy.
Use both comparison groups
At participating banks, qualifying firms gained a 0.7-percentage-point advantage over similar firms that narrowly missed the eligibility threshold. At nonparticipating banks, no comparable change in the gap occurred.
Connect the pattern to the conclusion
A general benchmark-rate decrease could affect loans at both types of banks. Because the new advantage instead depended on both firm eligibility and bank participation, the comparisons support attributing that advantage to the guarantee program.