Critical Reasoning

I agree why A is the correct answer, but why is D wrong?

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

If bankers are themselves not ready to lend money, what is the use of putting more money into saving accounts?
Is D wrong because it requires an assumption to be made that all business talked about in the argument have insufficient prospective earnings. I have learnt that options which require an assumption to be made are wrong.
Is that the only reason for D to be incorrect?

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

Answer is (a). It says having more retirement savings means more borrowing. the premise of the statement says that it will offer better retirement saving incentives so people will save more so that small businesses will have more money to borrow - but if people who save more also borrow more, it will contradict the effect entirely.

Why can't it be D? Another reason for the plan not to work is that even though more money is available it is not being lent because bankers don't want to. I'm aware that this choice introduces earnings (same as A introduced consumer borrowing). D answers the question, why else the plan would not work though. Thoughts?

clean A here.

bohdan01 wrote:Why can't it be D? Another reason for the plan not to work is that even though more money is available it is not being lent because bankers don't want to. I'm aware that this choice introduces earnings (same as A introduced consumer borrowing). D answers the question, why else the plan would not work though. Thoughts?

The plan argues that the lack of money available for development loans (for businesses) can be solved by instituting a plan that would essentially pool together funds from consumers, which, in turn, can be available for businesses.

(D) Bankers generally will not continue to lend money to businesses whose prospective earnings are insufficient to meet their loan repayment schedules

Choice (D) is a stretch for me because it's talking about businesses whose earnings are insufficient to pay for existing loans (keyword: repayment) while the argument is talking about development loans (can be inferred as new loans from the argument). This makes the choice irrelevant and out of scope.

Another way to look at this choice: Just because bankers do not lend to businesses who can't pay on existing loans (the businesses identified in choice D) does not mean that these businesses refer to those suffering from a lack of available development loans (the businesses identified in the argument).

Testluv wrote:

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!

I might actually disagree with TestLuv on this .

Even if "some" was replaced with "many" , this option is still irrelevant to the discussion .

Just reading the last line , we get this statement "As more money is available is deposited in such accounts , more money becomes available to borrowers"

So any choice that says "more money will not be available " is irrelevant . You cannot question the premise .

Can any expert weigh in on this ?

"Many" formally means the same as "some," but often has colloquial meaning of "more than some." But the GMAT will never hinge a question on this distinction.

And (C) is wrong regardless of terminology. Because tens of thousands is probably "many" people, and certainly "some" people, but it's a tenth of a percent of American consumers. Because (C) might well be telling us that 99.9% of people WILL increase their retirement savings, it is simply to vague and non-specific to possibly be a valid weakener.

Hope this helps!

georgepaul0071987 wrote:

Testluv wrote:

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!

I might actually disagree with TestLuv on this .

Even if "some" was replaced with "many" , this option is still irrelevant to the discussion .

Just reading the last line , we get this statement "As more money is available is deposited in such accounts , more money becomes available to borrowers"

So any choice that says "more money will not be available " is irrelevant . You cannot question the premise .

Can any expert weigh in on this ?

I received a PM asking me to comment.

The correct answer must weaken an ASSUMPTION: something that is NOT directly stated in the passage but that must be true in order for the conclusion to be valid.
Since the passage above states directly that the government 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, we should be VERY skeptical of any answer choice that tries to refute this portion of the argument.

What is wrong with D?

lunarpower wrote:

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.

--

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).

thank you Ron,
I remember that in a previous posting, you said that
for weakening problem we should identify an assumption before going to answer choices. after identify an assumption we look for an answer choice which invalidate an assumption.

I totally agree with you. identifying any assumption before going to answer choices is helpful .

However, I have problem. This problem happen in the case of Assumption question, not weakening question. But because this problem relates to prethinking an assumption, I want to discuss here.

in case of assumption question, the correct answer can be an assumption bridging the gap between evidence and conclusion or can be an assumption protecting the argument from an weakener. Some person call supporter assumption and defender assumption. But igrore the names, we discuss content of the problem.

the matter for me is that WE CAN ONLY PRETHINK "BRIGDING THE GAP" ASSUMPTION". we can not prethink assumption defending the conclusion from a weakner. Is that right? I am rather sure of this.

when we go to answer choices, we can not find a match between what we prethink and what is in the answer choice if the correct answer choices is an defending assumption. In this situation, we have to do the 3rd step, using negation test to find the defending assumption.

even this situation happen to us, prethink a bridging assumption is helpful because this step helps us better understand the argument

there is another case in which the assumption we prethink dose not cocincide with the assumption of the correct answer choice. In this case, though both assumption we prethink and assumption in the correct answer choice are the bridging assumptions, they are different simply because one argument can have many assumptions. However, prethinking a bridging assumption helps us to realize another bridging assumption among many answer choices.

is my thinking correct? pls, comment/advise, Ron.

Hello Ron,

Can you please also explain why choice D does not make sense? I could not eliminate it.

I think the key is to realize there's a difference between business borrowers and the consumers,I didn't realize it when I saw A and eliminated it instantly. BCDE are just irrelevant.