LSAT Practice Test

What conclusion can be drawn from the statement that "since higher debt has forced consumers to lower their savings, they now have less money to loan"?

1. Consumers will save more

2. Banks will close down

3. Consumers will have more money to loan

4. Banks will have less money to loan

The correct answer is: Banks will have less money to loan

The correct answer is D because the statement indicates that consumers now have less money to loan due to higher debt levels forcing them to lower their savings. This implies that consumers will have less money available to lend to banks. Therefore, it can be inferred that banks will have less money to loan as a result of consumers having less money available to lend. Option A is incorrect because the statement does not suggest that consumers will save more. Option B is incorrect because there is no evidence provided to support the claim that banks will close down. Option C is incorrect because the statement indicates that consumers have less money to loan, not more money to loan.