RC: Indicators: Main idea

[TP]

American economists continually attempt to gauge the health of the economy, both for the gain of the private sector as well as for the global standing of the United States. Different elements of the economy react differently to changes in prosperity. Some elements rise and fall as the economy waxes and wanes. These are known as coincident indicators. Other elements are known as leading indicators and usually show a downturn before the economy does. A third group of elements are known as lagging indicators and lose vigor only after the economy has already begun to slow. Economists can predict the direction of the economy by monitoring these indicators.
Coincident indicators, such as manufacturing and employment rates, are the best gauge of the current state of the economy. A continued shift in these indicators allows economists to determine whether the economy itself is in the process of an upturn or a downturn. These indicators coincide with shifts in the economy because they are dependent on sustained prosperity. But since coincident indicators reflect only the current state of the economy, they are not especially useful in predicting how the economy will perform in the near future. Economists must look to other indicators for that.
The indicators with the greatest predictive power are leading indicators, such as mortgage applications and profit margins. When these indicators rise or fall, economists can often foretell similar changes in the country's economic health. These indicators do not cause changes in the economy. Rather, they often signal changes in economic behavior that lead to shifts in the economic cycle. By contrast, the third type of indicator - lagging indicators - is useless as a harbinger of change. But these indicators can be helpful in confirming the assessments of economists.
Determining which elements of the economy fall into which category of indicator requires analysis of copious data and an understanding of the factors that propel the economy. One must determine which events surrounding a turn in the business cycle actually contributed to the change. Establishing a solid framework for understanding the behavior of these indicators helps economists to avoid miscalculations and to guide the country through periods of slow or negative economic growth.

The primary purpose of the passage is to:

1. compare the utility of various economic indicators
2. explain the process by which economists draw conclusions about key factors of economic change
3. present a conceptual framework used by economists to prescribe economic goals
4. trace the development of a set of economic devices
5. argue for the continued evaluation of economic factors affecting the business cycle

The CAT Answer is 1. I thought that answer choice only focused on paragraph
2 and 3, and did not take in the additional stuff that the author talks about. I had chosen "5" based
on the overall passage and the author's statement in the end "Establishing a solid..."

Can someone help?

[TP]

This was from MGMAT CAT #1

[JonathanSchneider]

Choice "5" is a classic case of false relevance: we are tempted by it because it resembles the most recent thing that we've read (info in the last paragraph).

However, the "main idea" of a passage will necessarily be about more than just the last paragraph. The first paragraph here describes the importance of different economic indicators, and what they are USED for. The second paragraph talks about the USEFULNESS of one type of indicator, while the third paragraph talks about the USEFULNESS of another type of indicator. As a result, info on the utility (or usefulness) of various indicators is actually woven throughout.

When in doubt, use the main idea point system described in that chapter of the RC strategy guide.

[Khush]

Hi,

I do have a query about this question, as i got it wrong in one of my MGMAT mocks recently.

I chose choice B after rejecting choice A.
Although choice A seemed right to me, the reason why i rejected this choice is that i thought meaning of "compare" is to show the similarities between the different indicators mentioned in the passage. Because the passage contrasts the 3 indicators (how the utility of each indicator is different from another), i rejected A.

What is the meaning of "Compare" and "Contrast" in GMAT perspective?

Please help.

[RonPurewal]

"Compare" includes both similarities and contrasts.

(I seem to remember school assignments that said "compare and contrast" -- maybe you're thinking the same -- but that's a redundant construction.
Redundancy is not a terrible thing when it comes to giving instructions -- in fact, the most effective instruction is extremely repetitive -- but it's undesirable in a well-written, non-technical sentence.)

[Khush]

Thank you Ron..

Appreciate your help!

In the explanation to this main idea question in the MGMAT CAT, it it written that:
"Overall, this passage is about the differing predictive uses of the various economic indicators."

So, will "contrast the utility of various indicators" be a right summary of the main idea?

[RonPurewal]

Thank you Ron..

Appreciate your help!

In the explanation to this main idea question in the MGMAT CAT, it it written that:
"Overall, this passage is about the differing predictive uses of the various economic indicators."

So, will "contrast the utility of various indicators" be a right summary of the main idea?

The passage is largely about contrasts, so, yes. However, you're likely to see "compare" in any summary statement.

[Khush]

Makes sense...

Thanks Ron !!!

[tim]

:)

[JeevanB126]

Hi,

Choice (B) Says: explain the process by which economists draw conclusions about key factors of economic change

I chose this as answer because:

i inferred the word "process" as - "comparing different indicators".
Hence choice (B) made sense to me.

explain the process(comparing different indicators) by which economists draw conclusions about key factors of economic change

I am not questioning official answer but am just trying to understand how i could have eliminated choice (B).

Also,

Choice (A) says : "compare" the utility of various economic indicators

I ignored choice (A), because 4th paragraph in the passage,

"Determining which elements of the economy ......through periods of slow or negative economic growth"

does not "compare" economic indicators, it is just talking about the importance of indicators. Because answer choice "A" says "compare" and if that is the main point then all paragraphs should talk about comparing economic indicators?

Could you please help me in answering my questions?

Thanks
JB

[RonPurewal]

"the process by which economists draw conclusions" would mean an actual, step-by-step description of what the economists actually do with the indicators--the formulas they use, the meanings they ascribe to different figures, etc. there's none of that here.

the passage does say "Economists can predict the direction of the economy by monitoring these indicators"--but gives zero information about how they do so!

[RonPurewal]

I ignored choice (A), because 4th paragraph in the passage,

"Determining which elements of the economy ......through periods of slow or negative economic growth"

does not "compare" economic indicators, it is just talking about the importance of indicators. Because answer choice "A" says "compare" and if that is the main point then all paragraphs should talk about comparing economic indicators?

not necessarily.
"primary purpose" means exactly what it says: primary purpose.
"what is the predominant theme of the essay?"

this theme should make up the bulk of the text, but it certainly doesn't have to appear everywhere.

[RonPurewal]

ironically, the phrase "primary purpose" actually implies the exclusion of at least one lesser purpose.

e.g.,
what's the main reason you're going back to school?
if i ask someone this question, i am implying that there are other, less important reasons, in which i'm not currently interested. if i didn't want to make such an implication, i'd just say "what's the reason..." or "why are you going back to school?"

[JbhB682]

Why is C wrong in this question ?

Is C wrong perhaps because

Guiding the country through slow or tough economic times

IS DIFFERENT from

Prescribing economic goals

[JbhB682]

Reason i eliminated A

I didn't think the main purpose of this passage is to compare the utility of the 3 indicators.

I would instead say that the main purpose is pen-ultimately in para 3 and in one line , i.e. economists use all these tools to gauge the economy.