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by dextar » Mon Jun 09, 2008 7:28 pm
Business are suffering because of lack of money available for development loans.Ot help businesses, the govt. plans to modify the income tax structure in order to induce individual taxpayers to put a large portion of their incomes into retirement savings accounts, because as more money is deposited in such accounts, more money becomes available to borrowers.

Whicb of the following most seriusly undermines the effectiveness of the govt. plan to increase the amount of moneyavailable for development loans for business?

A When level of personal retirement savings increase, consumer borrowing always increases correspondingly.

B The increased tax revenue the govt. would receive as a result of business expansion would not offset the loss in revenue from personla income taxes during the first year of its plan

Even with tax incentives, some people will choose not to increase their levels of retirmentsavings

Bankers generally wil not continue to lend money to businesses whose prospective earnings are insufficient to meet their loan repayment schedules

The modified tax structure wold give all taxpayers, regardless of their incomes, the same tax savings for a given increase in their retirement savings.

oa is A. i thought A is strngthening the argument by saying that borrowings will increase?Pls explain
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by netigen » Mon Jun 09, 2008 7:51 pm
This is a weaken Question

First step is to find the conclusion - as more money is deposited in such accounts, more money becomes available to borrowers (business borrowers)

So find an answer which tells you that more money will not be available to the borrowers even after the implementation of this plan.

A tells us that the personal borrowing increases proportionally with the increase in savings. This will reduce any additional funds from savings available for business borrowing.
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by dextar » Tue Jun 10, 2008 3:08 am
so u mean to say that consumer borrowing is same as peronsonal borrowing and not business borrowing. I think the key is to distinguish between consumer and business borrowing
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by sm612 » Wed Jun 11, 2008 5:18 pm
What is the Answer?
I think it should be (A)
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by lunarpower » Thu Jun 12, 2008 11:57 pm
dextar wrote:so u mean to say that consumer borrowing is same as peronsonal borrowing and not business borrowing. I think the key is to distinguish between consumer and business borrowing
correct.

if you make a diagram (of whatever type) of this passage, you'll find that it progresses from a premise stating that money will be available in the retirement funds (for some type of borrowers) to a conclusion stating that this money will be available to business borrowers.

this is a logical leap: the argument progresses from 'available to borrowers in general' to 'available to business borrowers in particular'.
this leap relies fundamentally on an assumption that other, competing borrowers will not elbow the business borrowers out of the market. if choice (a) is true, then that assumption is undermined.

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remember that, on almost all 'weaken the conclusion' problems, this is what you are trying to do: you're trying to undermine one of the assumptions behind the argument. therefore, these problems are basically 'find the assumption' problems with one extra step at the end (i.e., find a statement that contradicts that assumption).
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by mmslf75 » Sat Jan 09, 2010 10:54 pm
C is undoubtedly wrong

Question is had there been MANY instead of SOME

Would the option C then too be wrong ? , after all, some and many are equivalent TECHNICALLY !?
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by Testluv » Sun Jan 10, 2010 3:01 pm
mmslf75 wrote:C is undoubtedly wrong

Question is had there been MANY instead of SOME

Would the option C then too be wrong ? , after all, some and many are equivalent TECHNICALLY !?
Hi Ashish,

You've asked me a very similar question before on another problem; my answer hasn't changed! True, MANY and SOME share technical definitions. But, remember, what is more important for the GMAT are the TYPICAL interpretations. And, typically, "many" is used to convey an appreciable proportion (either where the exact proportion is unknown or where it is known to be less than a half) while "some" is used to convey "at least one". So, by replacing "some" with "many", the meaning of the answer choice would certainly change....why don't you tell me, then, if C would then rank as a weakener! ;)
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by tanviet » Sat Jan 16, 2010 3:53 am
for weakening, strenthening question

1. new information,in context of evidence
2,increase belieft or doubt
3,not contradict evidence or repeat evidence

A. the answer choice which contradict evidence in W.Q is attractive but wrong

B,answer choice which repeat evidence in S.Q is attractive but wrong.

remember 123AB for W,S question. That is all for these kinds of question

Here, c contradict evidence , C is attractive but wrong
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by mohit11 » Thu Feb 18, 2010 5:44 am
Hi duongthang

Can you ellaborate a bit on your 123AB approach..
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by komal » Thu Feb 18, 2010 6:21 am
dextar wrote:Business are suffering because of lack of money available for development loans.Ot help businesses, the govt. plans to modify the income tax structure in order to induce individual taxpayers to put a large portion of their incomes into retirement savings accounts, because as more money is deposited in such accounts, more money becomes available to borrowers.

Whicb of the following most seriusly undermines the effectiveness of the govt. plan to increase the amount of moneyavailable for development loans for business?

A When level of personal retirement savings increase, consumer borrowing always increases correspondingly.

B The increased tax revenue the govt. would receive as a result of business expansion would not offset the loss in revenue from personla income taxes during the first year of its plan

Even with tax incentives, some people will choose not to increase their levels of retirmentsavings

Bankers generally wil not continue to lend money to businesses whose prospective earnings are insufficient to meet their loan repayment schedules

The modified tax structure wold give all taxpayers, regardless of their incomes, the same tax savings for a given increase in their retirement savings.

oa is A. i thought A is strngthening the argument by saying that borrowings will increase?Pls explain
I tend to look for Causal relationships in a lot of CR questions. It helps me save valuable time and usually my answer choice is correct. Here's how i solved this problem :

cause : more money in savings accounts
effect : more money available to business ppl

we can attack the causal relationship to undermine the effectiveness of govt's plan.

(A) shows that even when cause is present (more money in savings accounts) effect does not occur (more money NOT available to business ppl) because consumers would borrow more and not much would be left for business borrowers. Hence the govt's plan will not be effective. Hence (A) is correct
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by mohit11 » Thu Feb 18, 2010 6:25 am
You're right.. i am getting too confused with all the materials.. I read Manhattan CR graduated to PR CR bible and now i am all confused... felt more confident when i started doing OG initially. Phew
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by komal » Thu Feb 18, 2010 6:28 am
mohit11 wrote:You're right.. i am getting too confused with all the materials.. I read Manhattan CR graduated to PR CR bible and now i am all confused... felt more confident when i started doing OG initially. Phew
PS CR Bible is the best thing that has happened to me in gmat prep. It is just so good. I cant emphasize enough how much it has helped me. I would recommend PS CR bible to anyone whos below average in CR.
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by mohit11 » Thu Feb 18, 2010 6:34 am
Oh i agree completely. I just read through it a couple of days back. so maybe i am in the transition phase. For example cause and effect reasoning is very clear to me. There only 4 possible answers. But then i am not able to apply it in the question.

Of the 40 questions from OG12 from bottom ( i.e the hard questions) i've only got 25 correct. :(
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by komal » Thu Feb 18, 2010 6:55 am
mohit11 wrote:Oh i agree completely. I just read through it a couple of days back. so maybe i am in the transition phase. For example cause and effect reasoning is very clear to me. There only 4 possible answers. But then i am not able to apply it in the question.

Of the 40 questions from OG12 from bottom ( i.e the hard questions) i've only got 25 correct. :(
The key is to practice practice n more practice :) i am saying this from my personal experience. Wish u all the luck :)
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by mohit11 » Thu Feb 18, 2010 7:14 am
Thanks, need all the lady luck i can get. GMAT in 2 Weeks
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