|
Author |
Message |
|
TAGS:
|
|
|
Director
Joined: 25 Aug 2007
Posts: 958
WE 1: 3.5 yrs IT
WE 2: 2.5 yrs Retail chain
Followers: 38
Kudos [?]:
559
[0], given: 40
|
Spending on research and development by United States [#permalink]
 08 May 2010, 05:35
Question Stats:
57% (02:58) correct
42% (00:01) wrong based on 7 sessions
Spending on research and development by United States businesses for 1984 showed an increase of about 8 percent over the 1983 level. This increase actually continued a downward trend evident since 1981 – when outlays for research and development increased 16.4 percent over 1980 spending. Clearly, the 25 percent tax credit enacted by Congress in 1981, which was intended to promote spending on research and development, did little or nothing to stimulate such spending. The conclusion of the argument above cannot be true unless which of the following is true? (A) Business spending on research and development is usually directly proportional to business profits. (B) Business spending for research and development in 1985 could not increase by more than 8.3%. (C) Had the 1981 tax credit been set higher than 25%, business spending for research and development after 1981 would have increased more than it did. (D) In the absence of the 25% tax credit, business spending for research and development after 1981 would not have been substantially lower than it was. (E) Tax credits market for specific investments are rarely effective in inducing businesses to make those investments.
_________________
Want to improve your CR: cr-methods-an-approach-to-find-the-best-answers-93146.html
Tricky Quant problems: 50-tricky-questions-92834.html
Important Grammer Fundamentals: key-fundamentals-of-grammer-our-crucial-learnings-on-sc-93659.html
|
|
|
|
|
|
|
Intern
Joined: 08 May 2010
Posts: 10
Schools: INSEAD, Harvard
Followers: 0
Kudos [?]:
0
[0], given: 1
|
Re: Spending on research and development in US [#permalink]
08 May 2010, 10:27
I couldn't figure out the answer in under two minutes and hurredly guessed C.
(A) Business spending on research and development is usually directly proportional to business profits. [NO - introduces a new piece of unconnected unformation, which is business profits]
(B) Business spending for research and development in 1985 could not increase by more than 8.3%. [NO - the rate in 1985 is 8%. 8.3% doesn't provide a related justification for the increased spending. it may provide partial justification if it were 8%]
(C) Had the 1981 tax credit been set higher than 25%, business spending for research and development after 1981 would have increased more than it did. [ bingo - any justification for the increase should be sufficient to make the argument hold water]
(D) In the absence of the 25% tax credit, business spending for research and development after 1981 would not have been substantially lower than it was.
[ NO - reinforces the argument that the tax credit didn't affect R&D spending]
(E) Tax credits market for specific investments are rarely effective in inducing businesses to make those investments.
|
|
|
|
|
|
Senior Manager
Joined: 24 Jul 2009
Posts: 299
Followers: 2
Kudos [?]:
51
[0], given: 0
|
Re: Spending on research and development in US [#permalink]
08 May 2010, 12:49
ykaiim wrote: Spending on research and development by United States businesses for 1984 showed an increase of about 8 percent over the 1983 level. This increase actually continued a downward trend evident since 1981 – when outlays for research and development increased 16.4 percent over 1980 spending. Clearly, the 25 percent tax credit enacted by Congress in 1981, which was intended to promote spending on research and development, did little or nothing to stimulate such spending.
The conclusion of the argument above cannot be true unless which of the following is true?
(A) Business spending on research and development is usually directly proportional to business profits.
(B) Business spending for research and development in 1985 could not increase by more than 8.3%.
(C) Had the 1981 tax credit been set higher than 25%, business spending for research and development after 1981 would have increased more than it did.
(D) In the absence of the 25% tax credit, business spending for research and development after 1981 would not have been substantially lower than it was.
(E) Tax credits market for specific investments are rarely effective in inducing businesses to make those investments. Conclusion : Tax credit didn't affected the spending..!! IMHO Only C and D discuss the issue at hand. Finally C: It means that " even 25% tax credit affected" the business spending...If tax credits would have been more, spending would have increased...!!
|
|
|
|
|
|
Manager
Joined: 11 Mar 2010
Posts: 79
Followers: 1
Kudos [?]:
4
[0], given: 1
|
Re: Spending on research and development in US [#permalink]
09 May 2010, 02:07
ykaiim wrote: Spending on research and development by United States businesses for 1984 showed an increase of about 8 percent over the 1983 level. This increase actually continued a downward trend evident since 1981 – when outlays for research and development increased 16.4 percent over 1980 spending. Clearly, the 25 percent tax credit enacted by Congress in 1981, which was intended to promote spending on research and development, did little or nothing to stimulate such spending.
The conclusion of the argument above cannot be true unless which of the following is true?
(A) Business spending on research and development is usually directly proportional to business profits.
(B) Business spending for research and development in 1985 could not increase by more than 8.3%.
(C) Had the 1981 tax credit been set higher than 25%, business spending for research and development after 1981 would have increased more than it did.
(D) In the absence of the 25% tax credit, business spending for research and development after 1981 would not have been substantially lower than it was.
(E) Tax credits market for specific investments are rarely effective in inducing businesses to make those investments. My take 'D'. 'C' is unsure as argument says 25 % tax credit "did little or nothing" to stimulate such spending. We cant say if 25pc tax credit would have increased spending more than it did. 'D' seem better than 'C. in absence of tax credit govt spending would not be substantially lower Wats OA??
|
|
|
|
|
|
Intern
Joined: 15 Mar 2010
Posts: 18
Followers: 0
Kudos [?]:
0
[0], given: 4
|
Re: Spending on research and development in US [#permalink]
09 May 2010, 05:09
ykaiim wrote: Spending on research and development by United States businesses for 1984 showed an increase of about 8 percent over the 1983 level. This increase actually continued a downward trend evident since 1981 – when outlays for research and development increased 16.4 percent over 1980 spending. Clearly, the 25 percent tax credit enacted by Congress in 1981, which was intended to promote spending on research and development, did little or nothing to stimulate such spending.
The conclusion of the argument above cannot be true unless which of the following is true?
(A) Business spending on research and development is usually directly proportional to business profits.
(B) Business spending for research and development in 1985 could not increase by more than 8.3%.
(C) Had the 1981 tax credit been set higher than 25%, business spending for research and development after 1981 would have increased more than it did.
(D) In the absence of the 25% tax credit, business spending for research and development after 1981 would not have been substantially lower than it was.
(E) Tax credits market for specific investments are rarely effective in inducing businesses to make those investments. IMO D. the conclusion says tax credit did not have almost any effect on RnD. To this hold true, assumption has to tell that in absence of tax credit the behaviour of comapnies toward Rnd would be same. and D says it all
|
|
|
|
|
|
Manager
Joined: 28 Jul 2009
Posts: 127
Followers: 2
Kudos [?]:
9
[0], given: 12
|
Re: Spending on research and development in US [#permalink]
22 May 2010, 10:57
Even i'll go with D ... will post explanation after OA has been announced(just to be sure of my reasoning ) ..
|
|
|
|
|
|
Manager
Joined: 30 Apr 2010
Posts: 79
Followers: 1
Kudos [?]:
4
[0], given: 1
|
Re: Spending on research and development in US [#permalink]
23 May 2010, 05:38
IMO D
|
|
|
|
|
|
Manager
Joined: 22 Jun 2007
Posts: 75
Followers: 1
Kudos [?]:
1
[0], given: 1
|
Re: Spending on research and development in US [#permalink]
23 May 2010, 10:03
ashnag wrote: ykaiim wrote: Spending on research and development by United States businesses for 1984 showed an increase of about 8 percent over the 1983 level. This increase actually continued a downward trend evident since 1981 – when outlays for research and development increased 16.4 percent over 1980 spending. Clearly, the 25 percent tax credit enacted by Congress in 1981, which was intended to promote spending on research and development, did little or nothing to stimulate such spending.
The conclusion of the argument above cannot be true unless which of the following is true?
(A) Business spending on research and development is usually directly proportional to business profits.
(B) Business spending for research and development in 1985 could not increase by more than 8.3%.
(C) Had the 1981 tax credit been set higher than 25%, business spending for research and development after 1981 would have increased more than it did.
(D) In the absence of the 25% tax credit, business spending for research and development after 1981 would not have been substantially lower than it was.
(E) Tax credits market for specific investments are rarely effective in inducing businesses to make those investments. IMO D. the conclusion says tax credit did not have almost any effect on RnD. To this hold true, assumption has to tell that in absence of tax credit the behaviour of comapnies toward Rnd would be same. and D says it all The argument says we need to prove the 25% tax credit did little or nothing . In C it proves that there was little effect but it could have been more. In D it says there was no effect of 25% tax credit since in its absence spending would not have been substantially lower than it was. If it seem illogical please explain.
|
|
|
|
|
|
Manager
Joined: 28 Jul 2009
Posts: 127
Followers: 2
Kudos [?]:
9
[0], given: 12
|
Re: Spending on research and development in US [#permalink]
24 May 2010, 20:33
Mohit .. we need an assumption ... assumptions always support the conclusion .... so if we negate the assumption the entire argument (along with conclusion) will fall out.
Now, please read both C and D and see which supports the conclusion "the 25 percent tax credit did little or nothing to stimulate such spending."
Clearly D supports it as it shows that the 25% Tax credit doesn't has any effect.
Now to test D .. just negate it. Read it as "In the absence of the 25% tax credit, business spending for research and development after 1981 would [strike]not[/strike] have been substantially lower than it was."
Now this shows that our 25% Tax credit had some effect. this is opposite to our conclusion. Hence this is the right answer.
Hope it is clear else I'll explain it in a clearer manner.
|
|
|
|
|
|
Manager
Joined: 22 Jun 2007
Posts: 75
Followers: 1
Kudos [?]:
1
[0], given: 1
|
Re: Spending on research and development in US [#permalink]
25 May 2010, 07:00
Acc3ss wrote: Mohit .. we need an assumption ... assumptions always support the conclusion .... so if we negate the assumption the entire argument (along with conclusion) will fall out.
Now, please read both C and D and see which supports the conclusion "the 25 percent tax credit did little or nothing to stimulate such spending."
Clearly D supports it as it shows that the 25% Tax credit doesn't has any effect.
Now to test D .. just negate it. Read it as "In the absence of the 25% tax credit, business spending for research and development after 1981 would [strike]not[/strike] have been substantially lower than it was."
Now this shows that our 25% Tax credit had some effect. this is opposite to our conclusion. Hence this is the right answer.
Hope it is clear else I'll explain it in a clearer manner. @acc3ss Thanks for taking pain to explain me !!!! Since in D we are taking about the absence of Tax Credit. I feel by no means it call tell us the was there any effect of Tax at all if impemented. Even if you negate the statement then also the statement explains you the effect of the absence of Tax Credit. I am not convinced. Please explain how such questions should be tackled.
|
|
|
|
|
|
SVP
Joined: 17 Feb 2010
Posts: 1568
Followers: 12
Kudos [?]:
123
[0], given: 6
|
Re: Spending on research and development in US [#permalink]
31 May 2010, 16:09
I would pick (D). what is the OA?
|
|
|
|
|
|
Director
Joined: 25 Aug 2007
Posts: 958
WE 1: 3.5 yrs IT
WE 2: 2.5 yrs Retail chain
Followers: 38
Kudos [?]:
559
[0], given: 40
|
Re: Spending on research and development in US [#permalink]
31 May 2010, 21:45
|
|
|
|
|
|
|
Re: Spending on research and development in US
[#permalink]
31 May 2010, 21:45
|
|
|
|
|
|
|
|
|
|
Moderators:
tuanquang269, RaviChandra, Vercules, Legendaddy, noboru, Marcab, metallicafan, rajeevrks27, willigetmylifeback, mikemcgarry, souvik101990, doe007, MacFauz, PTK, carcass, kissthegmat, Narenn
|
close
