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OG RC - Privatization q2

This topic has 2 expert replies and 3 member replies
fiza gupta Master | Next Rank: 500 Posts
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OG RC - Privatization q2

Post Thu Oct 13, 2016 3:57 am
While there is no blueprint for transforming a largely
government-controlled economy into a free one, the
experience of the United Kingdom since 1979 clearly
Line shows one approach that works: privatization, in which
(5) state-owned industries are sold to private companies. By
1979, the total borrowings and losses of state-owned
industries were running at about £3 billion a year. By
selling many of these industries, the government has
decreased these borrowings and losses, gained over £34
(10) billion from the sales, and now receives tax revenues from
the newly privatized companies. Along with a dramatically
improved overall economy, the government has been able
to repay 12.5 percent of the net national debt over a
two-year period.
(15) In fact, privatization has not only rescued individual
industries and a whole economy headed for disaster, but
has also raised the level of performance in every area. At
British Airways and British Gas, for example, productivity
per employee has risen by 20 percent. At Associated
(20) British Ports, labor disruptions common in the 1970’s and
early 1980’s have now virtually disappeared. At British
Telecom, there is no longer a waiting list -as there always
was before privatization -to have a telephone installed.
Part of this improved productivity has come about
(25) because the employees of privatized industries were given
the opportunity to buy shares in their own companies. They
responded enthusiastically to the offer of shares: at British
Aerospace, 89 percent of the eligible work force bought
shares; at Associated British Ports, 90 percent; and at
(30) British Telecom, 92 percent. When people have a personal
stake in something, they think about it, care about it, work
to make it prosper. At the National Freight Consortium, the
new employee-owners grew so concerned about their
company’s profits that during wage negotiations they
(35) actually pressed their union to lower its wage demands.
Some economists have suggested that giving away free
shares would provide a needed acceleration of the private-
zation process. Yet they miss Thomas Paine’s point that
“what we obtain too cheap we esteem too lightly.” In
(40) order for the far-ranging benefits of individual ownership to
be achieved by owners, companies, and countries,
employees and other individuals must make their own
decisions to buy, and they must commit some of their own
resources to the choice.

The quotation in lines 46-47 is most probaly used to
(A) counter a position that the author of the passage believes is incorrect
(B) state a solution to a problem described in the previous sentence
(C) show how opponents of the viewpoint of the author of the passage have supported their arguments
(D) point out a paradox contained in a controversial viewpoint
(E) present a historical maxim to challenge the principle introduced in the third paragraph

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fiza gupta Master | Next Rank: 500 Posts
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Post Thu Oct 13, 2016 4:03 am
Quote:
While there is no blueprint for transforming a largely
government-controlled economy into a free one, the
experience of the United Kingdom since 1979 clearly
Line shows one approach that works: privatization, in which
(5) state-owned industries are sold to private companies. By
1979, the total borrowings and losses of state-owned
industries were running at about £3 billion a year. By
selling many of these industries, the government has
decreased these borrowings and losses, gained over £34
(10) billion from the sales, and now receives tax revenues from
the newly privatized companies. Along with a dramatically
improved overall economy, the government has been able
to repay 12.5 percent of the net national debt over a
two-year period.
(15) In fact, privatization has not only rescued individual
industries and a whole economy headed for disaster, but
has also raised the level of performance in every area. At
British Airways and British Gas, for example, productivity
per employee has risen by 20 percent. At Associated
(20) British Ports, labor disruptions common in the 1970’s and
early 1980’s have now virtually disappeared. At British
Telecom, there is no longer a waiting list -as there always
was before privatization -to have a telephone installed.
Part of this improved productivity has come about
(25) because the employees of privatized industries were given
the opportunity to buy shares in their own companies. They
responded enthusiastically to the offer of shares: at British
Aerospace, 89 percent of the eligible work force bought
shares; at Associated British Ports, 90 percent; and at
(30) British Telecom, 92 percent. When people have a personal
stake in something, they think about it, care about it, work
to make it prosper. At the National Freight Consortium, the
new employee-owners grew so concerned about their
company’s profits that during wage negotiations they
(35) actually pressed their union to lower its wage demands.
Some economists have suggested that giving away free
shares would provide a needed acceleration of the private-
zation process. Yet they miss Thomas Paine’s point that
“what we obtain too cheap we esteem too lightly.
” In
(40) order for the far-ranging benefits of individual ownership to
be achieved by owners, companies, and countries,
employees and other individuals must make their own
decisions to buy, and they must commit some of their own
resources to the choice.
above question "46-47" line represent "Yet they miss Thomas Paine’s point that
“what we obtain too cheap we esteem too lightly.”

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Fiza Gupta

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fiza gupta Master | Next Rank: 500 Posts
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Post Thu Oct 13, 2016 4:05 am
OA:A

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Fiza Gupta

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DavidG@VeritasPrep Legendary Member
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Post Fri Nov 18, 2016 7:57 am
fiza gupta wrote:
While there is no blueprint for transforming a largely
government-controlled economy into a free one, the
experience of the United Kingdom since 1979 clearly
Line shows one approach that works: privatization, in which
(5) state-owned industries are sold to private companies. By
1979, the total borrowings and losses of state-owned
industries were running at about £3 billion a year. By
selling many of these industries, the government has
decreased these borrowings and losses, gained over £34
(10) billion from the sales, and now receives tax revenues from
the newly privatized companies. Along with a dramatically
improved overall economy, the government has been able
to repay 12.5 percent of the net national debt over a
two-year period.
(15) In fact, privatization has not only rescued individual
industries and a whole economy headed for disaster, but
has also raised the level of performance in every area. At
British Airways and British Gas, for example, productivity
per employee has risen by 20 percent. At Associated
(20) British Ports, labor disruptions common in the 1970’s and
early 1980’s have now virtually disappeared. At British
Telecom, there is no longer a waiting list -as there always
was before privatization -to have a telephone installed.
Part of this improved productivity has come about
(25) because the employees of privatized industries were given
the opportunity to buy shares in their own companies. They
responded enthusiastically to the offer of shares: at British
Aerospace, 89 percent of the eligible work force bought
shares; at Associated British Ports, 90 percent; and at
(30) British Telecom, 92 percent. When people have a personal
stake in something, they think about it, care about it, work
to make it prosper. At the National Freight Consortium, the
new employee-owners grew so concerned about their
company’s profits that during wage negotiations they
(35) actually pressed their union to lower its wage demands.
Some economists have suggested that giving away free
shares would provide a needed acceleration of the private-
zation process. Yet they miss Thomas Paine’s point that
“what we obtain too cheap we esteem too lightly.” In
(40) order for the far-ranging benefits of individual ownership to
be achieved by owners, companies, and countries,
employees and other individuals must make their own
decisions to buy, and they must commit some of their own
resources to the choice.

The quotation in lines 46-47 is most probaly used to
(A) counter a position that the author of the passage believes is incorrect
(B) state a solution to a problem described in the previous sentence
(C) show how opponents of the viewpoint of the author of the passage have supported their arguments
(D) point out a paradox contained in a controversial viewpoint
(E) present a historical maxim to challenge the principle introduced in the third paragraph
The line, Yet they miss Thomas Paine’s point, shows that author disagrees with the economists' position that companies should give away free shares. The answer is A

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gocoder Master | Next Rank: 500 Posts Default Avatar
Joined
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Target GMAT Score:
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Post Tue Jul 25, 2017 6:44 am
DavidG@VeritasPrep wrote:
fiza gupta wrote:
While there is no blueprint for transforming a largely
government-controlled economy into a free one, the
experience of the United Kingdom since 1979 clearly
Line shows one approach that works: privatization, in which
(5) state-owned industries are sold to private companies. By
1979, the total borrowings and losses of state-owned
industries were running at about £3 billion a year. By
selling many of these industries, the government has
decreased these borrowings and losses, gained over £34
(10) billion from the sales, and now receives tax revenues from
the newly privatized companies. Along with a dramatically
improved overall economy, the government has been able
to repay 12.5 percent of the net national debt over a
two-year period.
(15) In fact, privatization has not only rescued individual
industries and a whole economy headed for disaster, but
has also raised the level of performance in every area. At
British Airways and British Gas, for example, productivity
per employee has risen by 20 percent. At Associated
(20) British Ports, labor disruptions common in the 1970’s and
early 1980’s have now virtually disappeared. At British
Telecom, there is no longer a waiting list -as there always
was before privatization -to have a telephone installed.
Part of this improved productivity has come about
(25) because the employees of privatized industries were given
the opportunity to buy shares in their own companies. They
responded enthusiastically to the offer of shares: at British
Aerospace, 89 percent of the eligible work force bought
shares; at Associated British Ports, 90 percent; and at
(30) British Telecom, 92 percent. When people have a personal
stake in something, they think about it, care about it, work
to make it prosper. At the National Freight Consortium, the
new employee-owners grew so concerned about their
company’s profits that during wage negotiations they
(35) actually pressed their union to lower its wage demands.
Some economists have suggested that giving away free
shares would provide a needed acceleration of the private-
zation process. Yet they miss Thomas Paine’s point that
“what we obtain too cheap we esteem too lightly.” In
(40) order for the far-ranging benefits of individual ownership to
be achieved by owners, companies, and countries,
employees and other individuals must make their own
decisions to buy, and they must commit some of their own
resources to the choice.

The quotation in lines 46-47 is most probaly used to
(A) counter a position that the author of the passage believes is incorrect
(B) state a solution to a problem described in the previous sentence
(C) show how opponents of the viewpoint of the author of the passage have supported their arguments
(D) point out a paradox contained in a controversial viewpoint
(E) present a historical maxim to challenge the principle introduced in the third paragraph
The line, Yet they miss Thomas Paine’s point, shows that author disagrees with the economists' position that companies should give away free shares. The answer is A
Hi David,
From the same passage, could you help me on the following question for why Is B incorrect ?

Which of the following can be inferred from the passage about the privatization
process in the United Kingdom?
(A) It depends to a potentially dangerous degree on individual ownership of
shares.
(B) It conforms in its most general outlines to Thomas Paine’s prescription
for business ownership.
(C) It was originally conceived to include some giving away of free shares.
(D) It has been successful, even though privatization has failed in other
countries.
(E) It is taking place more slowly than some economists suggest is
necessary.

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DavidG@VeritasPrep Legendary Member
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Post Tue Jul 25, 2017 7:02 am
Quote:
Hi David,
From the same passage, could you help me on the following question for why Is B incorrect ?

Which of the following can be inferred from the passage about the privatization
process in the United Kingdom?
(A) It depends to a potentially dangerous degree on individual ownership of
shares.
(B) It conforms in its most general outlines to Thomas Paine’s prescription
for business ownership.
(C) It was originally conceived to include some giving away of free shares.
(D) It has been successful, even though privatization has failed in other
countries.
(E) It is taking place more slowly than some economists suggest is
necessary.
The quote we get from Thomas Paine is a fairly narrow one about how people don't value what they receive for free. That's consistent with the notion that shares shouldn't simply be given to employees, but it's not enough to conclude that the privatization process in general - state-owned businesses being sold to private companies/revenue used to pay down public debt/equity incentives to inspire worker loyalty - is consistent with Thomas Paine's beliefs.

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