Large national budget deficits do not cause large trade : GMAT Critical Reasoning (CR)
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# Large national budget deficits do not cause large trade

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27 Oct 2009, 05:02
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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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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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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"

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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27 Oct 2009, 10:17
C since it restates the stimulus.
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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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26 Apr 2014, 18:55
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

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Inference Q12-OG -VR2( Pattern Recognition) [#permalink]

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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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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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11 Jul 2016, 01:03
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
Re: Large national budget deficits do not cause large trade   [#permalink] 11 Jul 2016, 01:03
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