What does Nick think the green light means to Gatsby at the beginning of Chapter 5? Why does he feel Daisy has fallen short of Gatsby's dreams?

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Nick appropriately realizes that Daisy's green light symbolizes Gatsby's American Dream.  The light does not simply represent Gatsby's quest for Daisy's love; it envelopes the idea of what it means to be part of Daisy's aristocratic class: sophistication, acceptance, respect, power.

Daisy falls short of Gatsby's dream because no human could ever fulfill a dream such as his and because she is tarnished and disiillusioned by Tom's treatment of her.  She is no longer the golden American Dream.


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