Passage: An educational study evaluated high schools across several districts and observed that schools offering a mandatory financial literacy course had significantly higher average student savings account balances at graduation than schools without such a course. Based on this observation, the researchers concluded that mandatory financial literacy courses directly cause students to accumulate greater savings.
Statement: The researchers' conclusion is vulnerable to a confounding variable flaw if the schools offering the financial literacy course were located primarily in high-income communities where students received larger personal allowances.
Answer: Answer
Answer
The statement is True. High-income community status and higher personal allowances represent a confounding variable that provides an alternative causal explanation for the higher savings balances.
The statement is correct because introducing a systematic background difference—such as student allowance size driven by community wealth—creates an alternative explanation for why savings balances were higher. In GMAT Critical Reasoning, a causal argument is flawed if it assumes an observed correlation must mean one factor caused the other while ignoring plausible third-variable confounders.
Step-by-Step Solution
Key Concept
Causal Flaws and Confounding Variables