Find all School-related info fast with the new School-Specific MBA Forum

It is currently 07 Jul 2015, 10:00

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Businesses are suffering because of a lack of money

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
Director
Director
avatar
Joined: 08 Jun 2010
Posts: 650
Followers: 0

Kudos [?]: 45 [0], given: 119

Re: Businesses are suffering because of a lack of money [#permalink] New post 08 Feb 2013, 06:00
the argument of this type: if x increase/decrease, y will increase/decrease

prethink : assumption is y depends only x

weakener: y depends on other factor z which can change y

look for other factor

A match.
Intern
Intern
avatar
Joined: 27 Feb 2012
Posts: 8
Followers: 1

Kudos [?]: 0 [0], given: 6

Re: Businesses are suffering because of a lack of money [#permalink] New post 28 Mar 2013, 09:38
I'm still struggling to figure out why A.

Is it because A states the word "correspondingly"? Without this word is A still valid?
Intern
Intern
avatar
Joined: 09 Sep 2012
Posts: 29
Schools: LBS '14, IMD '16
Followers: 0

Kudos [?]: 22 [0], given: 25

Re: Businesses are suffering because of a lack of money [#permalink] New post 13 Apr 2013, 12:33
Lets compare

Inorder to weakening the conclusion , need to attack any of the following

giving tax incentives => no increase in borrowing => helping business
1 2 3

(A) When levels of personal retirement savings increase, consumer borrowing always increases
correspondingly.
this attacks 2 , directly .
DONT think that consumer borrowing is not same as business borrowing . DONT APPLY YOUR LOGIC. Consumer can be running business . He is as consumer of the borrowed money.

(C) Even with tax incentives, some people will choose not to increase their levels of retirement savings.
Why this is wrong?
simply because of 'some' . If is was 'all' instead of some then this is more likely ans then A (but this is unlikely on GMAT)

wow, question was raised in 2009 and im ans in 2013 :P
_________________

Your Kudos will motivate me :)

Director
Director
User avatar
Status: My Thread Master Bschool Threads-->Krannert(Purdue),WP Carey(Arizona),Foster(Uwashngton)
Joined: 27 Jun 2011
Posts: 894
Followers: 78

Kudos [?]: 181 [0], given: 57

GMAT ToolKit User Reviews Badge
Re: Businesses are suffering because of a lack of money [#permalink] New post 14 Sep 2013, 08:34
sagarsabnis wrote:
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 taxpayers to put a larger
portion of their incomes into retirement savings accounts, 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.
(8) 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.
(e) Even with tax incentives, some people will choose not to increase their levels of retirement savings.
(D) Bankers generally will 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 taxpayers, regardless of their incomes, the same tax savings for
a given increase in their retirement savings.

Please some one explain this...as i am not convinced with the explanation from OG


A it is....

But E too got a effect....Since the tax benefit is same for everyone regardless of their income...It will only encourage people who have less salary than to people who are in the highest slab...

Because they might think that what is the use to put the money in this plan since we are not getting any extra benefit...

But we dont have to choose the correct answer, we need to choose the best out of it..
_________________

General GMAT useful links-->

Indian Bschools Accepting Gmat | My Gmat Daily Diary | All Gmat Practice CAT's | MBA Ranking 2013 | How to Convert Indian GPA/ Percentage to US 4 pt. GPA scale | GMAT MATH BOOK in downloadable PDF format| POWERSCORE CRITICAL REASONING BIBLE - FULL CHAPTER NOTES | Result correlation between GMAT and GMAT Club's Tests | Best GMAT Stories - Period!

More useful links-->

GMAT Prep Software Analysis and What If Scenarios| GMAT and MBA 101|Everything You Need to Prepare for the GMAT|New to the GMAT Club? <START HERE>|GMAT ToolKit: iPhone/iPod/iPad/Android application|

Verbal Treasure Hunt-->

"Ultimate" Study Plan for Verbal on the GMAT|Books to Read (Improve Verbal Score and Enjoy a Good Read)|Best Verbal GMAT Books 2012|Carcass Best EXTERNAL resources to tackle the GMAT Verbal Section|Ultimate GMAT Grammar Book from GC club [Free Download]|Ultimate Sentence Correction Encyclopedia|Souvik's The Most Comprehensive Collection Of Everything Official-SC|ALL SC Rules+Official Qs by Experts & Legendary Club Members|Meaning/Clarity SC Question Bank by Carcass_Souvik|Critical Reasoning Shortcuts and Tips|Critical Reasoning Megathread!|The Most Comprehensive Collection Of Everything Official- CR|GMAT Club's Reading Comprehension Strategy Guide|The Most Comprehensive Collection Of Everything Official- RC|Ultimate Reading Comprehension Encyclopedia|ALL RC Strategy+Official Q by Experts&Legendary Club Members

----
---
--
-


1 KUDOS = 1 THANK


Kick Ass Gmat

Senior Manager
Senior Manager
User avatar
Joined: 29 Oct 2008
Posts: 409
Location: United States
Concentration: Marketing, Technology
Followers: 6

Kudos [?]: 140 [0], given: 34

Re: Businesses are suffering because [#permalink] New post 05 Jan 2014, 16:23
garimavyas wrote:
C states 'Even with tax incentives, some people will choose not to increase their levels of retirement savings.'

but that also means some people will choose to increase their levels of retirement savings, hence funds available for borrowing will still increase. and that increase amount will be available for businesses to borrow.

so C doesn't weaken the conclusion .

A states that number of borrowers will increase , this may result in even lesser funds for businesses to borrow than were previously available.

hence A seriously weakens the conclusion
Nice explanation. I understand that A is correct. I have another question for you all.. Will this modified version of B act as a weakener for this question?
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.
_________________

If you know what you're worth, then go out and get what you're worth. But you gotta be willing to take the hits, and not pointing fingers saying you ain't where you wanna be because of anybody! Cowards do that and You're better than that!
The path is long, but self-surrender makes it short; the way is difficult, but perfect trust makes it easy.

Fire the final bullet only when you are constantly hitting the Bull's eye, till then KEEP PRACTICING.
Failure establishes only this, that our determination to succeed was not strong enough.
Getting defeated is just a temporary notion, giving it up is what makes it permanent.

1000-sc-notes-at-one-place-in-one-document-with-best-of-explanations-192961.html

Press +1 Kudos, if you think my post gave u a tiny tip.

Senior Manager
Senior Manager
User avatar
Joined: 17 Dec 2012
Posts: 395
Location: India
Followers: 20

Kudos [?]: 253 [0], given: 10

Re: Businesses are suffering because of a lack of money [#permalink] New post 05 Jan 2014, 16:55
sagarsabnis wrote:
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 taxpayers to put a larger
portion of their incomes into retirement savings accounts, 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.
(8) 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.
(e) Even with tax incentives, some people will choose not to increase their levels of retirement savings.
(D) Bankers generally will 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 taxpayers, regardless of their incomes, the same tax savings for
a given increase in their retirement savings.

Please some one explain this...as i am not convinced with the explanation from OG



The negated conclusion is: More money is NOT available to the borrowers

Choice A offers the best explanation for this because it says that now there are more borrowers and so more money would actually not be available to the borrowers.
_________________

Srinivasan Vaidyaraman
Sravna Test Prep
http://www.sravna.com

Classroom Courses in Chennai
Free Online Material

Intern
Intern
avatar
Joined: 31 Mar 2014
Posts: 20
Concentration: Operations, General Management
Schools: IIMA (PGPX)
Followers: 0

Kudos [?]: 4 [0], given: 1

Re: Businesses are suffering because of a lack of money [#permalink] New post 23 Aug 2014, 19:04
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 taxpayers to put a larger
portion of their incomes into retirement savings accounts, because as more money is deposited in such
accounts, more money becomes available to borrowers.

Conclusion: More money becomes available to borrowers.
Assumption: The money is used by businesses only.

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.
Yes. suppose bank has 1000 bucks in the fund. It is planning to give to 500 to businesses. It possible that many normal people applied for loans and eaten into the share of businesses.

(8) 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.
We are not even bother about losses during the first year of plan. out of scope
(e) Even with tax incentives, some people will choose not to increase their levels of retirement savings.
This is the most tricky and misleading answer to the question. Be extra careful with some. Inorder for a plan to work it is not mandatory for everyone to agree. There will always be some outliers. As long as majority agree the plans get along. (Welcome to democracy :lol: )
(D) Bankers generally will not continue to lend money to businesses whose prospective earnings are
insufficient to meet their loan repayment schedules.
Some people reason this way. There is money with business but businesses are not good enough to get that money. The conclusion is about more money will be available or not, but not about how banks grant money. These is play of words. One can write many such answer choices such as business fritter away money after taking loans. The scope is conclusion money is available or not

(E) The modified tax structure would give all taxpayers, regardless of their incomes, the same tax savings for
a given increase in their retirement savings.
Sorry i'm not looking into tax slabs here. Out of scope.
Manager
Manager
User avatar
Joined: 10 Mar 2013
Posts: 245
Location: Germany
Concentration: Finance, Entrepreneurship
GMAT Date: 05-27-2015
GPA: 3.88
WE: Information Technology (Consulting)
Followers: 0

Kudos [?]: 21 [0], given: 192

GMAT ToolKit User
Re: Businesses are suffering because of a lack of money [#permalink] New post 06 Sep 2014, 12:06
We have here 2 points:
1) Money amount in the pot increases
2) This increased money amount reaches the right group of borrowers

--> We have 1) Money amount in the pot increases BUT we miss here 2) as consumer borrowing increases CORRESPONDINGLY so it +/- 0 for business borrowers, the don't get more money --> This argument most weakens the intended plan
_________________

When you’re up, your friends know who you are. When you’re down, you know who your friends are.

Share some Kudos, if my posts help you. Thank you !

Manager
Manager
User avatar
Joined: 20 Jan 2014
Posts: 162
Location: India
Concentration: General Management, Entrepreneurship
Followers: 0

Kudos [?]: 11 [0], given: 120

GMAT ToolKit User
Re: Businesses are suffering because of a lack of money [#permalink] New post 24 Sep 2014, 07:56
Fact1: Businesses are suffering because of a lack of money available for development loans.
Fact 2: To help businesses, the government plans to modify the income-tax structure in order to induce individual taxpayers to put a larger portion of their incomes into retirement savings accounts
Conclusion: Because as more money is deposited in such accounts, more money becomes available to borrowers.

If we can prove that even if govt plan implemented successfully, the no of borrowers increase or intended saving money not increase then it weakens the conclusion.
Option A does it.

Option C is wrong that even if some people chose not to save, still other people will be saving money
_________________

Consider +1 Kudos Please :)

Intern
Intern
User avatar
Joined: 11 Oct 2013
Posts: 17
Concentration: Marketing, General Management
GMAT Date: 10-29-2014
Followers: 0

Kudos [?]: 7 [0], given: 19

Re: Businesses are suffering because of a lack of money [#permalink] New post 28 Oct 2014, 04:46
Whats wrong with D?
If more money is put into the retirement savings, the effective money to be available for use by the business will be less. He would then reach bank for loan, and the bank denies his loan sanction because he can't repay the loan with his effective monthly earning. Thus no borrowing even when saving! :/

Any explanations?
_________________

GMAT Prep 1 - 520 Oct 13, 2014
GMAT Prep 2 - 640 Oct 21, 2014
THE GMAT. Coming Soon. Oct 29, 2014.

Tuck Thread Master
User avatar
Joined: 04 Jul 2014
Posts: 142
Concentration: General Management, Strategy
GMAT 1: 640 Q47 V31
GMAT 2: 640 Q44 V34
GMAT 3: 710 Q49 V37
GPA: 3.58
WE: Analyst (Accounting)
Followers: 11

Kudos [?]: 104 [0], given: 310

Re: Businesses are suffering because of a lack of money [#permalink] New post 26 Nov 2014, 19:40
Good question. +1. Let me attempt a good explanation now! :-D

I've made some key words in each option in bold and have entered my comments inline in blue as to why each wrong answer is wrong and why the correct one is correct. :)
F1: Businesses are suffering
F2: Govt thinks --> more retirement savings causes more money available for borrowers (just borrowers and not only business borrowers)
C: If more money is available to lend, more money will be available for development loans for businesses (which are suffering)

NOTE:
a) Whenever we have a X will cause Y weakener, in 99.99% of the cases, we just have to prove that Y won't happen
b) Whenever we have a X causes/may cause Y weakener, in 99.99% of the cases, we just have to prove that either Y caused X or that Z caused Y

We have case (b) here. We just have to prove that X will not cause Y (more money will be available for businesses which are suffering for development)


Now let's skim! :-D

sagarsabnis wrote:
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 taxpayers to put a larger portion of their incomes into retirement savings accounts, 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. This looks like a match to our pre phase. X will not cause Y because it causes Z. HOLD

(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.Nothing to do with our pre phrase. OUT

(C) Even with tax incentives, some people will choose not to increase their levels of retirement savings. Only some people won't. Still if majority invest that might help the Government. This probably strengthens the argument. OUT

(D) Bankers generally will not continue to lend money to businesses whose prospective earnings are insufficient to meet their loan repayment schedules. Increased savings leads to more money available for lending. But that doesn't mean that the bank will lend money just for the sake of lending. There is no incentive for the bank to lend for a poor business too. Possible trap answer. We have a clear A so far. Let's HOLD to it IF we find a flaw in A

(E) The modified tax structure would give all taxpayers, regardless of their incomes, the same tax savings for a given increase in their retirement savings. Okay I am interested in money available for lending and not savings. SCOPE SHIFT. OUT

Please some one explain this...as i am not convinced with the explanation from OG


So now between A & D. A fits my pre phrase amazingly well and has no flaws in my eyes whereas D does. So A it is! :)
_________________

Cheers!!

Joseph
If you like my post, let me know. Give me a kudos! :) Check these out too. You might like them! :)
GMAT Debrief | Comprehensive Verbal Flash cards/Notes | How to prepare your recommenders best | How to boost/ace SC score sustainbly |

Manager
Manager
User avatar
Joined: 23 Oct 2014
Posts: 109
Concentration: Marketing
GMAT 1: Q48 V25
Followers: 2

Kudos [?]: 28 [0], given: 66

Re: Businesses are suffering because of a lack of money [#permalink] New post 26 Nov 2014, 22:10
(A) When levels of personal retirement savings increase, consumer borrowing always increases
correspondingly.
If people borrow more then there might not be anymore money to give out for loans

(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.
The revenue is irrelevant folks investing more into their personal retirement savings.

(e) Even with tax incentives, some people will choose not to increase their levels of retirement savings.
Even with some the businesses can still achieve their goal.

(D) Bankers generally will not continue to lend money to businesses whose prospective earnings are
insufficient to meet their loan repayment schedules.
They don't have to loan more money. They just need to have the funds to back up the loans they do give out.

(E) The modified tax structure would give all taxpayers, regardless of their incomes, the same tax savings for
a given increase in their retirement savings.
This can still add more funds to the loans.
Manager
Manager
User avatar
Joined: 01 Oct 2013
Posts: 95
Schools: Haas '16, AGSM '16
Followers: 0

Kudos [?]: 2 [0], given: 13

GMAT ToolKit User
Re: Businesses are suffering because of a lack of money [#permalink] New post 17 Mar 2015, 20:42
Explanation for choice A

Type: weaken

Conclusion: increase personal retirement taxes => give more money available for loan.

Assumption: increase retirement taxes cause more money available

Break assumption: increase retirement taxes do not cause redundance in loans or do cause money available for loan reduced. Hence choice A is the most logical option.
Intern
Intern
avatar
Joined: 17 Sep 2013
Posts: 42
Followers: 0

Kudos [?]: 0 [0], given: 5

Re: Businesses are suffering because of a lack of money [#permalink] New post 23 Mar 2015, 17:59
The logic of the argument:
+ Fact: Lack of money available for development loans --> Businesses are suffering.
+ Goverment plan: Modify the tax income structure --> Increase retirement savings --> More money available for loans.
The effectiveness of the plan depends on the assumption that more retirement savings mean more money available for loans.
The answer should weaken the assumption.
A - It implies that even more money is put on retirement saving accounts, this amount of money will be shared for consumer borrowings and there is no guarantee that money left for businesses loans will increase.
B - No impact on the conclusion.
C - The conclusion deals w the majority, not w some.
D - The matter in the argument is the lack of money to lend general businesses, not the problematic businesses.
E - No impact.
so, A is CORRECT.
Re: Businesses are suffering because of a lack of money   [#permalink] 23 Mar 2015, 17:59

Go to page   Previous    1   2   [ 34 posts ] 

    Similar topics Author Replies Last post
Similar
Topics:
4 Because most hospitals suffer a chronic undersupply of GetThisDone 4 28 Apr 2012, 19:40
10 Experts publish their posts in the topic Businesses are suffering because of a lack of money devinawilliam83 5 22 Feb 2012, 11:29
Jordan: If a business invests the money necessary to noboru 4 09 Dec 2010, 12:40
9 Public hospitals are suffering because of a lack of money TehJay 15 27 Oct 2010, 17:36
5 Business are suffering because of a lack of money available zhenmaster 22 28 Mar 2008, 11:18
Display posts from previous: Sort by

Businesses are suffering because of a lack of money

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.