Quote:
A law passed in Rockville three years ago allows a 30% tax credit to consumers who purchase a newly constructed home. The tax credit was intended to stimulate the local economy by creating a higher demand for new houses and spurring the creation of jobs in construction and design. However, since the law was passed, the growth in sales of newly constructed homes has dropped each year, from 15% to 10% to 5%. Obviously, this law has had little or no effect on the sale of newly constructed homes.
Which of the following must be true if the above conclusion is to be properly drawn?
A. New house sales are directly tied to personal income.
B. New house sales cannot increase by more than 6% next year.
C. If the tax credit had been 50%, there would have been a larger increase in new house sales
D. Without the tax credit, new house sales would not have been significantly lower.
E. Tax credits for specific purchases are usually ineffective in influencing consumers to make those purchases.
KAPLAN OFFICIAL EXPLANATIONStep 1: Identify the Question Type
For a conclusion to be properly drawn from the evidence, the author's assumption must be true. Thus, this is an Assumption question.
Step 2: Untangle the Stimulus
The conclusion comes after the keyword, “obviously.” The author believes the law has had little or no effect on sales of newly constructed homes. The author's evidence is that since the law was passed three years ago, sales of such homes has dropped each year.
Step 3: Predict the Answer
A conclusion that states that X has had no effect on Y assumes that Y would have been the same without X. Here, the author is assuming that the sales figures would have been the same had the law not been passed. The sales figures would not have been higher, nor would they have been even lower.
Step 4: Evaluate the Choices
(D) matches the prediction. The author must be assuming that without the credit, sales would not have been even significantly lower than they actually were. If they would have been lower, then the credit did have an effect on the sales of the homes. Thus, (D) is correct.
(A) doesn't have to be true for the conclusion to follow from the evidence. The argument is about the connection between the sales figures and whether the law has had an effect on new homes sales. (A) has nothing to do with that connection.
(B) is wrong because the argument is about what effect the law has already had. What will happen next year is irrelevant.
(C) goes against the author's reasoning, implying that the tax credit does indeed affect sales of new homes.
(E) is wrong because the author doesn't have to assume anything at all about purchases in general, and what effect tax credits “usually” have. The author is only concerned with new homes in Rockville and the law passed there.
TAKEAWAY: Be very clear on the evidence and conclusion of the argument, and stick to the connection between them. Irrelevant choices are quite common, and can be easily spotted by having a good paraphrase of the argument.