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Large national budget deficits do not cause large trade

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Large national budget deficits do not cause large trade [#permalink] New post 27 Oct 2009, 05:02
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80% (02:08) correct 20% (00:55) wrong based on 190 sessions
Large national budget deficits do not cause large trade deficits. If they did, countries with the largest budget deficits would also have the largest trade deficits. In fact, when deficit figures are adjusted so that different countries are reliably comparable to each other, there is no such correlation.
If the statements above are all true, which of the following can properly be inferred on the basis of them?

(A) Countries with large national budget deficits tend to restrict foreign trade.
(B) Reliable comparisons of the deficit figures of one country with those of another are impossible.
(C) Reducing a country’s national budget deficit will not necessarily result in a lowering of any trade deficit that country may have.
(D) When countries are ordered from largest to smallest in terms of population, the smallest countries generally have the smallest budget and trade deficits.
(E) Countries with the largest trade deficits never have similarly large national budget deficits.
[Reveal] Spoiler: OA
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Re: Budget & Trade deficits [#permalink] New post 27 Oct 2009, 05:55
joyseychow wrote:
Large national budget deficits do not cause large trade deficits. If they did, countries with the largest budget deficits would also have the largest trade deficits. In fact, when deficit figures are adjusted so that different countries are reliably comparable to each other, there is no such correlation.
If the statements above are all true, which of the following can properly be inferred on the basis of them?
(A) Countries with large national budget deficits tend to restrict foreign trade.
(B) Reliable comparisons of the deficit figures of one country with those of another are impossible.
(C) Reducing a country’s national budget deficit will not necessarily result in a lowering of any trade deficit that country may have.
(D) When countries are ordered from largest to smallest in terms of population, the smallest countries generally have the smallest budget and trade deficits.
(E) Countries with the largest trade deficits never have similarly large national budget deficits.


Seems like C.
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Re: Budget & Trade deficits [#permalink] New post 27 Oct 2009, 09:49
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Restate the premise "large national deficits may not necessarily result in large trade deficits. there is no correlation between national deficits and trade deficits"

A) Out of scope. The premise is about national deficits and trade deficits. it has nothing about trade restriction
B) False. The premise is about the correlation between national deficits and trade deficits. It has no information about comparison between deficits of different countries. In addition, the word impossible is too strong. There are no facts support such comparison is impossible.
C) Correct answer. The premise states that there is no correlation between national and trade deficits. Therefore, reducing one may or may not lead to the reduction of another.
D) The premise says nothing about population. Rule out
E) Exact opposite. The premise says there is no correlation between trade deficits and national deficits
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Re: Budget & Trade deficits [#permalink] New post 27 Oct 2009, 10:17
C since it restates the stimulus.
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Re: Large national budget deficits do not cause large trade [#permalink] New post 17 Mar 2012, 07:49
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I chose C for this question:

A. This answer may or may not be true - there is not enough information within the stimulus to say that this answer is true.

B. This answer choice directly counters a statement within the stimulus. The stimulus says "when deficit figures are adjusted so that different countries are reliably comparable to each other..."

C. This is a good inference. The reason is because it essentially restates that large national budget deficits and large trade deficits have no correlation.

D. We are not concerned with ordering countries from largest to smallest population - this answer choice is irrelevant. Also, the smallest countries may or may not have the smallest budget and trade deficits - there is nothing within the stimulus to suggest this answer.

E. Firstly, the word "never have" is very strong - I was a bit suspicious of this. Also, I knew that this wasn't true because there is actually no correlation between large national budget deficits and large trade deficits as stated in the last sentence. Therefore, this answer choice can't be correct.
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Re: Large national budget deficits do not cause large trade [#permalink] New post 26 Apr 2014, 18:55
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Inference Q12-OG -VR2( Pattern Recognition) [#permalink] New post 15 Jul 2014, 05:37
Hi All,

This question particularly is relatively very easy to solve! But there are a lot of inference questions which are based on a particular pattern recognition. Can anyone help me decipher this code?


Q . Large national budget deficits do not cause large trade deficits. If they did, countries with the largest budget deficits would also have the largest trade deficits. In fact, when deficit figures are adjusted so that different countries are reliably comparable to each other, there is no such correlation.

If the statements above are all true, which of the following can properly be inferred on the basis of them?

(A) Countries with large national budget deficits tend to restrict foreign trade.

(B) Reliable comparisons of the deficit figures of one country with those of another are impossible.

(C ) Reducing a country's national budget deficit will not necessarily result in a lowering of any trade deficit that country may have.

(D) When countries are ordered from largest to smallest in terms of population, the smallest countries generally have the smallest budget and trade deficits.

(E) Countries with the largest trade deficits never have similarly large national budget deficits.
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Re: Large national budget deficits do not cause large trade [#permalink] New post 07 Aug 2014, 08:06
I feel it was between the options C and E.

I negated out option E, as the word 'never' made it a very strong negative correlation. In fact the last sentence states that there is no such correlation.

If the word, 'never' was not present, then option was lucrative as well.

But clearly option C is the correct answer.
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Re: Large national budget deficits do not cause large trade   [#permalink] 07 Aug 2014, 08:06
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