Real estate agent: Over the past decade, our region's population has increased over 10 percent, and so have inflation-adjusted sales...

GMAT Critical Reasoning : (CR) Questions

Source: Mock

Critical Reasoning

Assumption

MEDIUM

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Real estate agent: Over the past decade, our region's population has increased over 10 percent, and so have inflation-adjusted sales prices of local homes. Demographers project that the population will rise even more rapidly over the coming decade. Population growth increases demand for homes, and home prices rise when demand rises relative to supply. Thus, housing prices over the next decade will probably also keep rising at least as rapidly as they have been.

Which of the following is an assumption the real estate agent's argument requires?

Over the coming decade, the supply of homes in the region will not increase at a significantly greater rate than the demand for homes there.

Other things being equal, rising home prices tend to slow regional population growth.

Demographers have projected that the regional population growth will cause a proportional increase in inflation-adjusted sales prices of local homes.

Even if the regional population does not rise over the coming decade, local housing prices will probably continue to rise.

Rising priced for a product during one decade usually, if not always, indicate that prices for that product will continue to rise during the next decade.

Solution

Passage Analysis:

Text from Passage	Analysis
Over the past decade, our region's population has increased over 10 percent, and so have inflation-adjusted sales prices of local homes.	What it says: Population grew more than 10% and home prices also went up over the last decade What it does: Establishes the historical pattern that population and prices both increased together What it is: Agent's observation about past trends Visualization: Population: 100,000 → 110,000+ people; Home prices: $300,000 → $330,000+ (both trending up)
Demographers project that the population will rise even more rapidly over the coming decade.	What it says: Experts predict population will grow even faster in the next ten years What it does: Adds expert forecasting that builds on the past trend but suggests acceleration What it is: Third-party expert projection Visualization: Next decade: 110,000 → 130,000+ people (steeper growth than before)
Population growth increases demand for homes, and home prices rise when demand rises relative to supply.	What it says: More people means more demand for houses, and higher demand pushes prices up What it does: Explains the economic principle connecting population growth to price increases What it is: Agent's statement of economic cause-and-effect Visualization: More people (130,000) → More buyers looking for homes → Higher demand → Prices go up
Thus, housing prices over the next decade will probably also keep rising at least as rapidly as they have been.	What it says: Therefore, home prices will likely continue going up at the same rate or faster What it does: Draws the conclusion by applying the economic principle to the population forecast What it is: Agent's main conclusion/prediction Visualization: Home prices: $330,000+ → $360,000+ (continuing upward trend)

Argument Flow:

The agent starts with historical data showing both population and home prices increased together over the past decade. Then we get expert predictions that population growth will actually speed up in the future. The agent explains the economic connection between population growth and rising home prices. Finally, the agent concludes that since population will grow even faster, prices should keep rising at least as much as before.

Main Conclusion:

Housing prices over the next decade will probably keep rising at least as rapidly as they have been rising in the past decade.

Logical Structure:

Past pattern (population up + prices up) + Future prediction (population up even more) + Economic principle (more people = higher demand = higher prices) → Therefore, prices will continue rising at least as fast as before. The argument relies on the economic principle to connect population projections to price predictions.

Prethinking:

Question type:

Assumption - We need to find what the real estate agent must believe to be true for their conclusion to work. This is something that, if false, would make the argument fall apart.

Precision of Claims

The agent makes specific quantity claims (10% population growth, prices rising 'at least as rapidly'), quality claims (population growth causes demand increases), and temporal claims (past decade trends will continue into next decade).

Strategy

Since this is an assumption question, we need to identify ways the conclusion could be falsified while respecting the given facts. The agent concludes that housing prices will keep rising at least as rapidly based on: (1) past correlation between population and price growth, (2) future population projections, and (3) the economic principle that population growth drives demand. We should look for gaps between these premises and the conclusion - what could break this chain of reasoning?

Answer Choices Explained

Over the coming decade, the supply of homes in the region will not increase at a significantly greater rate than the demand for homes there.

This states that supply won't increase at a significantly greater rate than demand. This is exactly what the agent must assume for the conclusion to work. The agent's reasoning relies on increased demand pushing prices up, but if supply increased much faster than demand, prices wouldn't necessarily rise. Without this assumption, the conclusion falls apart. This is our answer.

Other things being equal, rising home prices tend to slow regional population growth.

This suggests rising prices slow population growth. This actually works against the agent's argument rather than supporting it. If rising prices slow growth, then the projected rapid population increase might not happen, which would undermine the prediction. The agent doesn't need to assume this relationship.

Demographers have projected that the regional population growth will cause a proportional increase in inflation-adjusted sales prices of local homes.

This claims demographers projected proportional price increases. But the passage only says demographers projected population growth - it doesn't mention them making any predictions about housing prices. The agent is making the price prediction based on their own reasoning, not demographic projections.

Even if the regional population does not rise over the coming decade, local housing prices will probably continue to rise.

This suggests prices will rise even without population growth. This goes beyond what the agent argues and isn't necessary for the conclusion. The agent's reasoning specifically depends on population growth driving demand, so this assumption isn't required.

Rising priced for a product during one decade usually, if not always, indicate that prices for that product will continue to rise during the next decade.

This proposes a general rule that past price trends predict future trends. The agent's argument is more specific than this - it's based on the economic principle connecting population to demand to prices, not just historical pattern continuation. This broad assumption isn't what the argument requires.

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