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Businesses are suffering because of a lack of money

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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.
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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?
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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
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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..
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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.
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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.
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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.
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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
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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
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Re: Businesses are suffering because of a lack of money   [#permalink] 24 Sep 2014, 07:56
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