Economies in which a high percentage of resources are : GMAT Critical Reasoning (CR)
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Economies in which a high percentage of resources are

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Manager
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Economies in which a high percentage of resources are [#permalink]

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04 Jul 2009, 00:30
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38% (01:44) correct 63% (00:45) wrong based on 18 sessions

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3.Economies in which a high percentage of resources are invested in research and development show greater growth in the long run than do those in which resources are channeled into consumption. Japanese workers spend a higher percentage of their income investing in research and development than do American workers.
To grow as fast as Japan has in the past three decades, the United States must change the tax code in order to encourage savings and investment and discourage debt.
Which of the following, if true, tends to weaken the argument?
(A) Japanese research is more focused on consumers than is research by American firms.
(B) Class mobility, highly valued in American culture, is encouraged by a growing rather than a stagnant economy.
(C) Studies have shown that countries with high consumption rates prosper in the short run.
(D) Proposed changes to the tax code could involve strict limits on the deductability of interest, and increased allowance for research.
(E) Because a decreasing percentage of the United States is under 40, an age when savings are traditionally low, the savings rate will increase without changes to the tax code.
Here plz clarify between the contendors A,C and E.
A could be right as the research of america is wrongly focused thus change in focus is req and not increase in investment.
C i do not understand...
E could be right as USA has a different age distribution once this becomes ok then the saving will improve???
[Reveal] Spoiler:
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05 Jul 2009, 10:10
I too think that the answer is E. couldn't find any proper logic of how C would weaken the arguemetn
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05 Jul 2009, 11:03
I'm stumped by it as well. What's the source of the question? & is there an official explanation?
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06 Jul 2009, 10:08
I hope it's not a GMAT Based question. Muse be LSAT one.
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06 Jul 2009, 10:36
confusing options, true.

C is the best option though, because the argument says that if US wants to grow fast in 3 decades, it must change tax code. C says that in short run, high consumption rates bring prosperity.

Here we have to notice that short run is equivalent to 3 decades. But according to the argument, consumption rate should be decreased by changing tax code, which, according to C, will not help in bringing about growth in short run.
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Re: Japan and US economy [#permalink]

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06 Jul 2009, 19:08
Maulikgmat wrote:
3.Economies in which a high percentage of resources are invested in research and development show greater growth in the long run than do those in which resources are channeled into consumption. Japanese workers spend a higher percentage of their income investing in research and development than do American workers.
To grow as fast as Japan has in the past three decades, the United States must change the tax code in order to encourage savings and investment and discourage debt.
Which of the following, if true, tends to weaken the argument?
(A) Japanese research is more focused on consumers than is research by American firms.
(B) Class mobility, highly valued in American culture, is encouraged by a growing rather than a stagnant economy.
(C) Studies have shown that countries with high consumption rates prosper in the short run.
(D) Proposed changes to the tax code could involve strict limits on the deductability of interest, and increased allowance for research.
(E) Because a decreasing percentage of the United States is under 40, an age when savings are traditionally low, the savings rate will increase without changes to the tax code.
Here plz clarify between the contendors A,C and E.
A could be right as the research of america is wrongly focused thus change in focus is req and not increase in investment.
C i do not understand...
E could be right as USA has a different age distribution once this becomes ok then the saving will improve???
[Reveal] Spoiler:

"in order to encourage savings and investment...", the author assumes that the US will follow the original model that the economies with high investment in R&D will be more prosperous than those with high consumption. C challenged this model by showing that the model is not necessarily so.

Hope it is helped!
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10 Jul 2009, 07:52
Agree with sondenso.

In order to weaken an argument, we should always try and negate the assumption, which over here is being done in option C.
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10 Jul 2009, 08:02
E makes no sense at all. The last statement in the argument has no relevance to the main premise and conclusion. How does encouraging savings lead to an investment in research ???

Somehow this argument doesn't make a lot of sense. While C seems to be the best answer, the argument could have been constructed in a rather 'GMAT' way. Can the author reveal the source please ?
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11 Jul 2009, 20:00
pleonasm wrote:
E makes no sense at all. The last statement in the argument has no relevance to the main premise and conclusion. How does encouraging savings lead to an investment in research ???

Somehow this argument doesn't make a lot of sense. While C seems to be the best answer, the argument could have been constructed in a rather 'GMAT' way. Can the author reveal the source please ?

HI,
It is avl in 1000 CR document NO OE avl..
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23 Jul 2009, 01:03
C)
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29 Jul 2009, 21:00
I just encountered this question in my 1000CR document. The OA is E in my file. It also is the answer that makes sense logically.

The argument is the tax code should be changed to increase savings. Well, if the population is aging and savings will increase naturally without the change in tax code, the argument is weakened.
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Re: Japan and US economy [#permalink]

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29 Jul 2009, 21:56
Maulikgmat wrote:
3.Economies in which a high percentage of resources are invested in research and development show greater growth in the long run than do those in which resources are channeled into consumption. Japanese workers spend a higher percentage of their income investing in research and development than do American workers.
To grow as fast as Japan has in the past three decades, the United States must change the tax code in order to encourage savings and investment and discourage debt.
Which of the following, if true, tends to weaken the argument?
(A) Japanese research is more focused on consumers than is research by American firms.
(B) Class mobility, highly valued in American culture, is encouraged by a growing rather than a stagnant economy.
(C) Studies have shown that countries with high consumption rates prosper in the short run.
(D) Proposed changes to the tax code could involve strict limits on the deductability of interest, and increased allowance for research.
(E) Because a decreasing percentage of the United States is under 40, an age when savings are traditionally low, the savings rate will increase
[Reveal] Spoiler:

This is what happens when you use poor sources such as CR1000. The answer choices are wrong and the question is just terrible. In this case, the answer is 100% (E).

E WEAKENS the argument by showing that the necessary condition does not HAVE to occur.
The author concludes that -> the United States MUST change the tax code in order to encourage savings and investment and discourage debt and grow as fast as Japan.

increased savings and debt (SUFFICIENT) -> changed the tax code (NECESSARY).

However, (E) states that the savings rate will INCREASE WITHOUT changing the tax code.
Thus it weakens the argument by eliminating the Necessary condition. Changing the tax code is NOT the ONLY way the US can increase its savings, since even by NOT changing the tax code, savings will still increase.

Please try to not use CR1000 questions since the document is illegal and the document has so many types that it'll only confuse you. There are so many Critical Reasoning questions out there that you'll best be served by avoiding this document.
In other words, if you have increased savings, then you MUST have changed the tax code.
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31 Jul 2009, 07:44
E!!!!!
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13 Aug 2009, 19:33
I hate such questions where evryone has opposing views..A good way to learn though i guess!
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05 May 2010, 22:47
In E, I found savings rate, which is not mentioned in the argument. Do we need to assume this as the savings?

Maulikgmat wrote:
3.Economies in which a high percentage of resources are invested in research and development show greater growth in the long run than do those in which resources are channeled into consumption. Japanese workers spend a higher percentage of their income investing in research and development than do American workers.
To grow as fast as Japan has in the past three decades, the United States must change the tax code in order to encourage savings and investment and discourage debt.
Which of the following, if true, tends to weaken the argument?
(A) Japanese research is more focused on consumers than is research by American firms.
(B) Class mobility, highly valued in American culture, is encouraged by a growing rather than a stagnant economy.
(C) Studies have shown that countries with high consumption rates prosper in the short run.
(D) Proposed changes to the tax code could involve strict limits on the deductability of interest, and increased allowance for research.
(E) Because a decreasing percentage of the United States is under 40, an age when savings are traditionally low, the savings rate will increase without changes to the tax code.
Here plz clarify between the contendors A,C and E.
A could be right as the research of america is wrongly focused thus change in focus is req and not increase in investment.
C i do not understand...
E could be right as USA has a different age distribution once this becomes ok then the saving will improve???
[Reveal] Spoiler:

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20 Oct 2010, 22:49
Very confusing. Can anyone explain why not A?
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21 Oct 2010, 10:25
i thought its E
Re: Japan and US economy   [#permalink] 21 Oct 2010, 10:25
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