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State’s budget

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State’s budget

by soumyopriyosaha » Tue Jan 26, 2010 6:37 am
While Governor Verdant has been in office, the state's budget has increased by an average of 6 percent each year. While the previous governor was in office, the state's budget increased by an average of 11.5 percent each year. Obviously, the austere budgets during Governor Verdant's term have caused the slowdown in the growth in state spending.

Which of the following, if true, would most seriously weaken the conclusion drawn above?
(A) The rate of inflation in the state averaged 10 percent each year during the previous governor's term in office and 3 percent each year during Verdant's term.
(B) Both federal and state income tax rates have been lowered considerably during Verdant's term in office.
(C) In each year of Verdant's term in office, the state's budget has shown some increase in spending over the previous year.
(D) During Verdant's term in office, the state has either discontinued or begun to charge private citizens for numerous services that the state offered free to citizens during the previous governor's term.
(E) During the previous governor's term in office, the state introduced several so-called "austerity" budgets intended to reduce the growth in state spending.

OA: A
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by mmon » Tue Jan 26, 2010 9:14 am
imo a

clearly strengthens the fact that governor verdante's administration did not slow down.

it is a cause effect condition whereby different cause is stated to strengthen
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by vijay_venky » Wed Jan 27, 2010 4:47 am
Clearly a Cause and Effect scenario

"small Budgets" caused "slower state spending growth".

Apparently only option A gives the alternate reason for the decrease in the state spending growth. Other options kind of fall apart and not attacking the exact conclusion.
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by komal » Wed Jan 27, 2010 8:10 am
Which of the following, if true, would most seriously weaken the conclusion drawn above?

(A) The rate of inflation in the state averaged 10 percent each year during the previous governor's term in office and 3 percent each year during Verdant's term.
CORRECT : this shows an alternative cause (low inflation rate) for the stated effect (low state spending)

(B) Both federal and state income tax rates have been lowered considerably during Verdant's term in office.
INCORRECT : it strengthens the argument by stating that revenues have lowered and thus the slowdown in spending

(C) In each year of Verdant's term in office, the state's budget has shown some increase in spending over the previous year.
INCORRECT : irrelevant.... issue is not about rate of increase/decrease in spending during verdant's term .. the issue is about decrease in spending in verdant's term in relation to ex-governor's term

(D) During Verdant's term in office, the state has either discontinued or begun to charge private citizens for numerous services that the state offered free to citizens during the previous governor's term.
INCORRECT : if during verdant's term the state begun to charge for services then it means increase in revenue with possible increase in spending..this basically strengthens the argument

(E) During the previous governor's term in office, the state introduced several so-called "austerity" budgets intended to reduce the growth in state spending.
INCORRECT : out of scope... introduction of 'austere' (severe, rigid) budgets during ex governor's term has nothing to do with slow spending during verdant's term
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by ramprakaashk » Mon Feb 08, 2010 7:13 pm
Hi Komal,
D can also mean that the state budget included the free money given to private citizens..As the free money is cut, it may seems that the state budget is low but spending on other infra structures and things may be increased..So Can we conclude the answer as D.
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by Focus_gmat » Wed Feb 10, 2010 8:54 am
Still not sure on why choices B is incorrect, can someone please help :(

B says that " Both federal and state income tax rates have been lowered considerably during Verdant's term in office" , doesnt this mean that lowered revenues are the cause of lowered spending.. lowered revenues is the alternate cause and weakens the argument ?
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by Osirus@VeritasPrep » Wed Feb 10, 2010 9:13 am
Focus_gmat wrote:Still not sure on why choices B is incorrect, can someone please help :(

B says that " Both federal and state income tax rates have been lowered considerably during Verdant's term in office" , doesnt this mean that lowered revenues are the cause of lowered spending.. lowered revenues is the alternate cause and weakens the argument ?
Tax rates don't matter. There are two ways to lower the public deficit, 1) increased tax revenues, or 2) lower spending. You can lower the tax rate and actually increase the amount of tax revenue received. This actually happened during the Regan administration. The answer is A because spending could be the same, but inflation would make the rates different.
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by mgmt_gmat » Thu Feb 11, 2010 10:36 am
Clearly (A). Inflation is related to budget. Not income tax. It explains rate of increase was due to inflation.
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by ajith » Thu Feb 11, 2010 11:16 am
soumyopriyosaha wrote:While Governor Verdant has been in office, the state's budget has increased by an average of 6 percent each year. While the previous governor was in office, the state's budget increased by an average of 11.5 percent each year. Obviously, the austere budgets during Governor Verdant's term have caused the slowdown in the growth in state spending.

Which of the following, if true, would most seriously weaken the conclusion drawn above?
(A) The rate of inflation in the state averaged 10 percent each year during the previous governor's term in office and 3 percent each year during Verdant's term.
(B) Both federal and state income tax rates have been lowered considerably during Verdant's term in office.
(C) In each year of Verdant's term in office, the state's budget has shown some increase in spending over the previous year.
(D) During Verdant's term in office, the state has either discontinued or begun to charge private citizens for numerous services that the state offered free to citizens during the previous governor's term.
(E) During the previous governor's term in office, the state introduced several so-called "austerity" budgets intended to reduce the growth in state spending.
A - Explains why the government budget was growing slower than the previous governor's term and why it is not the reason for public spending slowing down.

B - Income tax cuts doesnt explain the cuts in public spending directly. Indirectly if we consider it the cause of public spending slowdown, we can also consider it to be a cause of austere budgets.

C - It does not weaken the argument ( The growth rate was not grown is the issue not growth was not there)

D - It does not weaken the argument

E - Even if it is true it will no way weaken the argument in the passage
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