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Expert replies
by gmatnmein2010 » Sat Feb 06, 2010 2:26 am
Five years ago, as part of a plan to encourage citizens of Levaska to increase the amount of money they put into savings, Levaska's government introduced special savings accounts in which up to $3,000 a year can be saved with no tax due on the interest unless money is withdrawn before the account holder reaches the age of sixty-five. Millions of dollars have accumulated in the special accounts, so the government's plan is obviously working.
Which of the following, if true, most seriously weakens the argument?

A. A substantial number of Levaskans have withdrawn at least some of the money they had invested in the special accounts.
B. Workers in Levaska who already save money in long-term tax-free accounts that are offered through their workplace cannot take advantage of the special savings accounts introduced by the government.
C. The rate at which interest earned on money deposited in regular savings accounts is taxed depends on the income bracket of the account holder.
D. Many Levaskans who already had long-term savings have steadily been transferring those savings into the special accounts.
E. Many of the economists who now claim that the government's plan has been successful criticized it when it was introduced.
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Source: — Critical Reasoning |

by thephoenix » Sat Feb 06, 2010 2:45 am
Argument: Special account increased the savings.
Weaken: If increase in account is due to transfer of other savings deposits then will weakens the argument.

A. A substantial number of Levaskans have withdrawn at least some of the money they had invested in the special accounts. [Definitely does not address increase in savings - eliminate it]
B. Workers in Levaska who already save money in long-term tax-free accounts that are offered through their workplace cannot take advantage of the special savings accounts introduced by the government. [Strengthens the argument - eliminate it]
C. The rate at which interest earned on money deposited in regular savings accounts is taxed depends on the income bracket of the account holder. [Tax and Tax bracket is out of scope - eliminate it]
D. Many Levaskans who already had long-term savings have steadily been transferring those savings into the special accounts. [Hold it]
E. Many of the economists who now claim that the government's plan has been successful criticized it when it was introduced. [Out of scope - eliminate it]
IMO D
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by Focus_gmat » Tue Feb 09, 2010 8:44 am
IMO A should be the answer, as this option shows that money in the special savings a/c is not increasing because SUBSTANTIAL no of people are withdrawing.D actually strengthens the conclusion as money in the special savings a/c is increasing as people are transferring additional funds
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by Osirus@VeritasPrep » Tue Feb 09, 2010 8:47 am
Focus_gmat wrote:IMO A should be the answer, as this option shows that money in the special savings a/c is not increasing because SUBSTANTIAL no of people are withdrawing.D actually strengthens the conclusion as money in the special savings a/c is increasing as people are transferring additional funds
No, A is irrelevant. Even if people are withdrawing money in the special savings account, it doesn't mean that the savings rate is increasing. In D, if you show that the people who already saved are just transferring money to this new account to take advantage of the tax incentive, it shows that more people aren't saving, but the same savers are just transferring money. Hope that helps.
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by komal » Tue Feb 09, 2010 9:08 am
gmatnmein2010 wrote:Five years ago, as part of a plan to encourage citizens of Levaska to increase the amount of money they put into savings, Levaska's government introduced special savings accounts in which up to $3,000 a year can be saved with no tax due on the interest unless money is withdrawn before the account holder reaches the age of sixty-five. Millions of dollars have accumulated in the special accounts, so the government's plan is obviously working.
Which of the following, if true, most seriously weakens the argument?

According to the argument above,
Cause : Introduction of Special Savings Accounts
Effect : Increase in the amount of money put into special savings a/c


A. A substantial number of Levaskans have withdrawn at least some of the money they had invested in the special accounts.
Incorrect : Does nothing to weaken the argument that govt's plan is working. Eliminated.

B. Workers in Levaska who already save money in long-term tax-free accounts that are offered through their workplace cannot take advantage of the special savings accounts introduced by the government.
Incorrect : This one actually strengthens the argument by implying that even when workers dint not take advantage of the scheme, the plan still worked.

C. The rate at which interest earned on money deposited in regular savings accounts is taxed depends on the income bracket of the account holder.
Incorrect : Issue is about SPECIAL SAVINGS A/C not REGULAR SAVINGS A/C. Eliminated.

D. Many Levaskans who already had long-term savings have steadily been transferring those savings into the special accounts.
Correct : This weakens the argument by showing an alternate cause (transfer of savings from regular a/cs to special a/cs) for the stated effect (increase in amount of money put into special savings a/c)

E. Many of the economists who now claim that the government's plan has been successful criticized it when it was introduced.
Incorrect : Economists claim blah blah blahhhhhhh OUT OF SCOPE.
Hope this helps : )
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