Is “raising most serious doubt” more close to “weaken” or “evaluate” ??
OG 17. Q 643. CR
The official ans is A .. which seem to be more evaluating the argument. Moreover, the explanation says the choice to be a ‘reason’ .. it is an assumption made in the argument.
Where as ‘C’ .. even though it says “some people”, (some could be 45 out of 100 as well) .. looks to be more appropriate.
Can someone please break this down for me to understand. I’m sure i am missing something or my very approach is incorrect.
Thanks in advance
Alright .. here it is 🙂
OG 17. CR.
Businesses are suffering because of a lack of money available for development loans. To help businesses, the government plans to modify the income-tax structure in order to induce individual tax payers to put a larger portion of their incomes into retirement saving account, because as more money is deposited in such accounts, more money becomes available to borrowers.
Which of the following, if true, raises the most serious doubt regarding the effectiveness of the government’s plan to increase the amount of money available for development loans for businesses.
A. When levels of personal retirement savings increase, consumer borrowing always increases correspondingly.
B. The increased tax revenue the government would receive as a result of business expansion would not offset the loss in revenue from personal income taxes during the first year of the plan.
C. Even with tax incentives, some people will choose not to increase their retirement savings.
D. Bankers will generally not continue to lend money to businesses whose prospective earnings are insufficient to meet their loan repayment schedules.
E. The modified tax structure would give all tax payers, regardless of their incomes, the same tax savings for a given increase in their retirement savings.
This is a weaken type question. Here goes my reasoning :
Government plan –
change tax structure to encourage citizen to put money in retirement saving account – money then available in these account can be used to provide loans to business.
We need to see an ans option that will help us to determine that government plan will not be successful.
A – If citizens put money in saving account, their burrowing capacity will also increase and therefore again there will be no money available for business.
B – it is talking of the tax revenue collected for first year (Do not seems to weaken the plan in any case) so eliminate
C – it talks about “some people” , We do not know how much this “some” constitutes so eliminate
D – Bankers will not lend money to those whom they they think will not make schedule payment. What about others who can provide schedule payment. Does not weaken the plan so eliminate
E – Does not talk about weakening the plan. It actually strengthens it.
Experts please let us know if we are wrong or something needs to add on.