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# Lawmaker: Raising taxes is not the only means of reducing

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Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

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12 Jul 2010, 01:35
Should be D.

I dont see any use in assuming A.

Argument says says. govt can sell the helium and clear its debt..irrespective of whether govt needs it or not.

But what if the price fall when govt tries to sell, this clearly weakens the argument. And we need this assumption to defend the conclusion.
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12 Jul 2010, 01:44
What is OA??
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12 Jul 2010, 04:56
i feel the answer is b.. This is the assumption if not taken will fail the conclusion of the total debt part. I may be wrong though
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13 Jul 2010, 06:04
D . Well if govt is not using it then better it sells it off and invests the money or fill balloons with the gas.

Its not about the need here as said in A.

Plz tell OA, if it exists
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13 Jul 2010, 10:49
after negating B, argument falls apart . So, B
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Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

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04 Nov 2015, 10:18
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Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

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24 Nov 2015, 17:41
aielman wrote:
I would go with option A.

Option D, though appealing has a fundamental mathematical pitfall.

Lets say the buy price of the Govt is 100$for 10 units therefore the total cost of accruing the helium is 1000$, now the current market price is 125$for each unit. Now 24% of 125$ would be 30$. If the market value of helium decreases even by 24%, the net selling price of one unit of helium would be 95$. If the government sells 9 units of helium at this price and 1 unit at 125$, the total amount it would gain is 95*9 + 125*1 = 980$ (this is the worst case scenario).
Still running a debt of 20$. So i guess option A is the only one that holds, cos a proposition to sell the helium is made iff the govt has no current need for it. The math is good. But, the argument depends on the fact that government ought to sell the He at market price only. So, the 1 unit 125 is not possible. It has to sell all units at 95 only. Anyways, A was close for me too. If govt. has no current need, it might sell He. If it has need, it won't sell He. But, A doesn't address the money thing, while D does. Manager Joined: 22 Aug 2014 Posts: 50 Followers: 0 Kudos [?]: 2 [0], given: 5 Lawmaker: Raising taxes is not the only means of reducing [#permalink] ### Show Tags 09 Dec 2015, 10:30 reply2spg wrote: Lawmaker: Raising taxes is not the only means of reducing government debt. The government’s stockpile of helium is worth 25 percent more, at current market prices, than the debt accumulated in acquiring and storing it. Therefore, by selling the helium, the government can not only pay off that debt but reduce its overall debt as well. Which of the following is an assumption on which the argument depends? A. The government has no current need for helium. B. Twenty-five percent of the debt the government has accumulated in Stockpiling helium is not an insignificant portion of the government’s Total debt. C. It is not in the lawmaker’s interest to advocate raising taxes as a Means of reducing government debt. D. Attempts to sell the government’s helium will not depress the market Price of helium by more than 25 percent. E. The government will not incur any costs in closing its facilities for stockpiling helium. My answer is D without any doubt. Just understand that, say 100 dollar tor acquiring the stock and 25 dollar gain for market price favour. The last part 25dollar, which is a gain, can help reduce debt overall. Assumption answer anyhow tries to help to remove any inconsitency between conclusion and premises. Here, seems no such inconsitency, nor any any new things in the conclusion without the help or touch of premises. So, it might seem no way to help the conclusion to fill up a gap, since no gap available. Still, you have an opportunity to help. How? Think ..how can you give money to a guy who is too rich to get your help! still, you can help him, even without paying a dollar! This is through defending other possibilities of his expenses , for example, you can do something that will reduce his at least one way of expenses (it is like, saving a dollar from lost is like earning a new dollar).This is called defender rule! This defender rule needs to be applied here, since no obvious gap is evident. Such rule has often a signature to recognize easily..which is..using 'not' in order to cancel out one possibility of attack.Answer D is a classic example. Intern Joined: 30 Nov 2015 Posts: 1 Followers: 0 Kudos [?]: 0 [0], given: 0 Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink] ### Show Tags 26 Apr 2016, 16:32 Why not Option E???? If the cost of closing down the storage facility of 25% Helium is more than its selling price, It ll not gain any money for Govt. Hence Y not E.. Option D, even if price goes down from the normal rates, Govt will gain some money ( may be less). Other gain is in reducing storage cost. So it ll always be good for Govt (may not b best). So I feel E is the answer.. Intern Joined: 15 Mar 2016 Posts: 5 Followers: 0 Kudos [?]: 1 [0], given: 14 Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink] ### Show Tags 27 Apr 2016, 12:27 WhyabloodyMBA wrote: aielman wrote: I would go with option A. Option D, though appealing has a fundamental mathematical pitfall. Lets say the buy price of the Govt is 100$ for 10 units therefore the total cost of accruing the helium is 1000$, now the current market price is 125$ for each unit.

Now 24% of 125$would be 30$. If the market value of helium decreases even by 24%, the net selling price of one unit of helium would be 95$. If the government sells 9 units of helium at this price and 1 unit at 125$, the total amount it would gain is
95*9 + 125*1 = 980$(this is the worst case scenario). Still running a debt of 20$.

So i guess option A is the only one that holds, cos a proposition to sell the helium is made iff the govt has no current need for it.

The argument says that the govt can the stockpile, thus the argument itself signifies that der s a stockpile, which means its der for emergency n no current need is der. so option A is wrong.

IMO D.as d negation of dis statement wud make the lawmakes argument to fail.

E is wrong, i guess, coz ders nothing mentioned in the argument abt the facility costs.

Please correct if m wrong nywhr.

I think E is more wrong b/c the argument talks about "overall" debt. Thus any costs incurred could still have the possibilty of not effecting any overall change in debt
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Lawmaker: Raising taxes is not the only means of reducing [#permalink]

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06 Jun 2016, 22:45
Lawmaker: Raising taxes is not the only means of reducing government debt. The government’s stockpile of helium is worth 25 percent more, at current market prices, than the debt accumulated in acquiring and storing it. Therefore, by selling the helium, the government can not only pay off that debt but reduce its overall debt as well.

Which of the following is an assumption on which the argument depends?

A. The government has no current need for helium.
B. Twenty-five percent of the debt the government has accumulated in Stockpiling helium is not an insignificant portion of the government’s Total debt.
C. It is not in the lawmaker’s interest to advocate raising taxes as a Means of reducing government debt.
D. Attempts to sell the government’s helium will not depress the market Price of helium by more than 25 percent.
E. The government will not incur any costs in closing its facilities for stockpiling helium.

Premise : Govt. has stockpile ( If it can recover national debt, you can well imagine how much)

Conclusion: By selling Helium, the govt can recover its debt.

Assumption: Flooding the market won't reduce the price to less than the govt. debt

A states that the govt. has no current need for helium. This is a very tempting assumption. But It says nothing about national debt. Also. Stockpile implies that excess stored for the future. SO the govt. has already taken care for its current need.
The currect answer would be something similar to " The government shall never need the helium to be sold"

Lets negate D.

If flooding the market will reduce by 25%, then the govt will still have to raise taxes. Leading to a failure of the argument.

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Lawmaker: Raising taxes is not the only means of reducing [#permalink]

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07 Jun 2016, 11:09
arirux92 wrote:
Lawmaker: Raising taxes is not the only means of reducing government debt. The government’s stockpile of helium is worth 25 percent more, at current market prices, than the debt accumulated in acquiring and storing it. Therefore, by selling the helium, the government can not only pay off that debt but reduce its overall debt as well.

Which of the following is an assumption on which the argument depends?

A. The government has no current need for helium.
B. Twenty-five percent of the debt the government has accumulated in Stockpiling helium is not an insignificant portion of the government’s Total debt.
C. It is not in the lawmaker’s interest to advocate raising taxes as a Means of reducing government debt.
D. Attempts to sell the government’s helium will not depress the market Price of helium by more than 25 percent.
E. The government will not incur any costs in closing its facilities for stockpiling helium.

Premise : Govt. has stockpile ( If it can recover national debt, you can well imagine how much)

Conclusion: By selling Helium, the govt can recover its debt.

Assumption: Flooding the market won't reduce the price to less than the govt. debt

A states that the govt. has no current need for helium. This is a very tempting assumption. But It says nothing about national debt. Also. Stockpile implies that excess stored for the future. SO the govt. has already taken care for its current need.
The currect answer would be something similar to " The government shall never need the helium to be sold"

Lets negate D.

If flooding the market will reduce by 25%, then the govt will still have to raise taxes. Leading to a failure of the argument.

To get the question Correct,I didn't able to make any specific assumption.I guessed,There is a hundred of assumptions to conclude the argument.
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05 Aug 2016, 15:22
d) let's say government paid 100 billion to store and purchasing the helium, market price 25% more, so if government sells it, 25 billion net profit

let's say overall debt 300 billion, so government can still reduce some debt by using the profit earned 300-25 billion
if market price falls more then 25%, government will get less than 75 billion by selling helium, so loss of 100-75= more than 25 billion
so more debt on government 300+25= 325

choice A wrong - even if government needs helium, we dont know how much need of it, it might be just the fraction of the storage
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18 Sep 2016, 00:23
The conclusion states that selling the helium at current prices will not only reduce the debt acquired by storing the helium but also reduce the overall debt.

Only in Option D, the assumption is clearly visible. If this option is negated, it damages the conclusion. As the prices of helium will fall, the money obtained won't be sufficient to cover the overall debt that was calculated with the assumption that prices of helium will remain 25% above current levels.
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23 Sep 2016, 10:50
Lawmaker: Raising taxes is not the only means of reducing government debt. The government’s stockpile of helium is worth 25 percent more, at current market prices, than the debt accumulated in acquiring and storing it. Therefore, by selling the helium, the government can not only pay off that debt but reduce its overall debt as well.

Which of the following is an assumption on which the argument depends?

A. The government has no current need for helium.
B. Twenty-five percent of the debt the government has accumulated in Stockpiling helium is not an insignificant portion of the government’s Total debt.
C. It is not in the lawmaker’s interest to advocate raising taxes as a Means of reducing government debt.
D. Attempts to sell the government’s helium will not depress the market Price of helium by more than 25 percent.
E. The government will not incur any costs in closing its facilities for stockpiling helium.

Govt will sell its helium to reduce the debt.
under what conditions this plan fails to accomplish its requirements:
1. There is no market available for helium
2. If excess of helium is sold, its price goes down.

reverse of these prethinking must be our assumption. Now only A and D are worth considering here:
Negating option A:
If govt needs helium, then it will not sell. But it is already mentioned that helium is in excess so we can leave this option.

Negating option D:
Attempt to sell will depress market price. This will falter our conclusion and hence is the correct answer.
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24 Sep 2016, 00:37
I m confused between B and D, need expert opinion.
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Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

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24 Sep 2016, 04:28
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nishant12600 wrote:
I m confused between B and D, need expert opinion.

Notice, conclusion is that selling helium will reduce the overall debt of the government.

In B, we are given that 25% of the total debt the government has accumulated in Stockpiling helium is not an insignificant portion.

Negate it, 25% of the total debt the government has accumulated in Stockpiling helium is an insignificant portion. So, what is insignificant here?? Is it 1% or 30% or what? We don't know. May be its 30%. So, selling it may reduce that 30% amount. We are no where given the conclusion that the larger portion of the overall debt is reduced. So, whether its insignificant or significant, the debt is obviously going to reduce. hence, this statement doesn't shatter the conclusion. Hence, incorrect.

Now, option D : Attempts to sell the government’s helium will not depress the market Price of helium by more than 25 percent.

Negate it : Attempts to sell the government’s helium will depress the market Price of helium by more than 25 percent. Now, since we are saying that the market price will be reduced by more than 25%, so it casts doubt whether we will be able to pay the debt. We are given that it is currently at 25% higher than its actual price. So, if the price is reduced by 25%, we may actually get the lower amount of money that would lead to not able to pay the helium price as well. Hence, the conclusion is shattered.

lets say Helium bought at 100, Current price = 125, after selling reduced price = 93.75, which is less than the original price. I hope its clear now.
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Lawmaker: Raising taxes is not the only means of reducing [#permalink]

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24 Sep 2016, 10:36
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nishant12600 wrote:
I m confused between B and D, need expert opinion.

In addition to the explanation by abhimahna above, please note that an assumption MUST BE TRUE. Whenever a specific number or percentage is observed in an option of an assumption question, there are chances that by changing the number or percentage the implication of the option does not change. Hence assumption of that particular number or percentage need not necessarily be required. Such options can then be easily eliminated. Here instead of 25% mentioned in option B take any other larger percentage - the implication does not change. So the assumption of that specific 25% is not required. Without further analysis this option can be dropped.
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25 Sep 2016, 23:39
IMO D
My explaination

Lets total debt of the Govt. be $1000, of which$100 of debt was taken for purchasing and stockpiling Helium.

Now the current market price of Helium is 25% more. i.e $125. So, if we sell the Helium @$125 , we not only pay the debt of procuring the Helium, but also reduce the overall debt to $875 ($1000 -$125). So, here we are assuming that Attempts to sell the government’s helium will not depress the market Price of helium by more than 25 percent.. Negate it, Attempts to sell the government’s helium will depress the market Price of helium by more than 25 percent.. i.e current market price$125*(.75) = \$93.75. In this case, we did not even get the price at which have procured and stored the Helium.
Hence the conclusion breaks.

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Lawmaker: Raising taxes is not the only means of reducing   [#permalink] 25 Sep 2016, 23:39

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