RC 4

While new census data reveals that unemployment numbers are even direr than was previously suspected,

it is not clear that the forecast for American entrepreneurship is equally alarming. An article in a major

national newspaper suggests that the contraction in hiring at existing companies might result in more new

companies being founded. College graduates,

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unable to find traditional jobs, instead opt to start their own businesses. Where a recession may seem an

unpropitious time for such a historically risky endeavor, with no better options, would-be entrepreneurs have

little to lose. Unfortunately, this situation does not necessarily impact the economy positively. Though the

average number of new businesses started per year has been higher during the recession than it was before, the

proportion of high-value businesses

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founded each year has declined. So even if a business manages to stay solvent, it may not bring significant

returns. Also, because of an inevitable dearth of angel investors and venture capitalists, many new

entrepreneurs are putting their own money on the line. In certain ways, the choice between accepting a

traditional job and starting a business is not unlike the choice between renting and buying property. The latter

requires a significant initial outlay and carries

15 heavier risks, but the rewards can be equally substantial.

1. The primary purpose of the passage is to

(A) propose changes in the way the public generally interprets census data

(B) maintain that college students should form their own companies, especially during economic

recessions

(C) present a nuanced view of a contemporary economic issue

(D) evaluate the viability of low-versus high-value businesses under various environmental conditions

(E) draw an analogy between career decisions and real estate decisions, specifically the choice to rent or

buy property

2. According to the passage, the reason that many college graduates are choosing to launch their own companies in the

present economic climate is that

(A) they are hampered by the difficulty of finding outside investors

(B) they cannot easily land positions typically open to workers of their experience

(C) the prevalence of low-value companies has increased

(D) they are forced to decide between renting and buying property

(E) forecasts of the unemployment rate are likely to become less dire in coming years

3. It can be inferred from the passage that over the course of the recent recession, the number of American high-value

businesses founded per year

(A) has fallen sharply

(B) has fallen moderately

(C) has risen sharply

(D) has risen moderately

(E) may have either fallen or risen