Critical Reasoning

To improve the long-term savings rate of the citizens of Levaska, the country's legislature decided to implement a plan that allows investors to save up to $1,000 per year in special accounts without paying taxes on the interest earned unless withdrawals are made before the investor reaches age sixty-five. Withdrawals from these accounts prior to age sixty-five would result in the investor's having to pay taxes on all the accumulated interest at the time of withdrawal.

Which of the following, if true, most strongly supports the prediction that the legislature's plan will have its intended effect?

A. The money saved in the tax-free savings accounts will be deposited primarily in those banks and financial institutions that supported the legislation instituting the plan.
B. The majority of people choosing to take advantage of the tax-free savings accounts will withdraw their money prior to age sixty-five.
C. A significant number of the citizens of Levaska will invest in the tax-free savings accounts well before they reach the age of sixty-five.
D. During the ten years prior to implementation of the plan, Levaskans deposited an increasingly smaller percentage of their annual income in long-term savings accounts.
E. People who are not citizens of Levaska are not eligible to invest in the tax-free savings accounts, even if their income is taxable in Levaska.


OA after discussion, please explain your reasoning for the benefit of other readers. Thanks.

I would say C. the earlier they invest in these tax free accounts, the more savings and interest they accrue, so the more they save.

IMO C

Indeed OA is C, but i'm curious why not E. If non citizens were allowed to invest and more of them were investing than the citizens doesn't that affects the intended plan?

edwardyong wrote:Indeed OA is C, but i'm curious why not E. If non citizens were allowed to invest and more of them were investing than the citizens doesn't that affects the intended plan?

E is out of scope, look at the conclusion of the argument and you will see that we do not care if people from out of town are allowed to invest because this has no effect on tbhe argument.

edwardyong wrote:Indeed OA is C, but i'm curious why not E. If non citizens were allowed to invest and more of them were investing than the citizens doesn't that affects the intended plan?

Nope. It doesn't affect the intended plan because a) even if non-citizens are allowed to invest, the citizens are also still allowed to invest and b) non-citizens investing (or not) investing doesn't affect the characteristics of the plan.

In other words, non-citizens investing doesn't affect or detriment citizens' ability to invest, and nor does it affect any feature of the plan. Hence, choice E is outside the scope.

Testluv,

If i understand your explanation correctly that if i narrowed my scope to only whether plan would be affected, then E would be clearly out. I think probably i didn't narrow my scope enough in many CR question thus always seems to have 2 competitive answer choices.

edwardyong wrote:Testluv,

If i understand your explanation correctly that if i narrowed my scope to only whether plan would be affected, then E would be clearly out. I think probably i didn't narrow my scope enough in many CR question thus always seems to have 2 competitive answer choices.

Yep, that's the common thing--narrowing it down to 2 choices. When you have two choices, don't try to figure out why one of them is wrong--instead try to figure out why one of them is right. I know that might sound a bit mundane, but there's a lot of theory under there. I went into it in considerable detail in a few of my early CR posts....

Testluv,

Thanks for your tip. I never heard of it before and i do always try to look for what is wrong. I'll definitely put your tip into use from now on. Thanks a lot and you have been great help so far.