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Which of the following best completes the passage? Critics [#permalink]
 27 May 2011, 09:55
Question Stats:
30% (02:38) correct
70% (01:43) wrong based on 0 sessions
Which of the following best completes the passage?
Critics of Country A’s trade policy with Country Z contend that Country A’s low tariffs are responsible for its large trade deficit with Country Z. Government officials, however, argue that there is a trade deficit with Country Z because low labor costs in Country Z allow its companies to manufacture goods cheaply. The officials also claim that economic competition from Country Z is responsible for better prices for Country A’s consumers. Therefore, they say, the most logical way to lower the trade deficit without hurting Country A’s consumers is to _________.
(A) raise the tariffs on goods imported from Country Z
(B) encourage businesses in Country A to reduce their labor costs
(C) increase taxes on all goods not manufactured in Country A
(D) improve the products manufactured by Country A’s companies
and market them heavily in Country A
(E) subsidize all of Country A’s companies that manage to
maintain their prices at the level of the goods produced by
Country Z
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Re: critical reasoning [#permalink]
27 May 2011, 12:54
bonzai wrote: Which of the following best completes the passage?
Critics of Country A’s trade policy with Country Z contend that Country A’s low tariffs are responsible for its large trade deficit with Country Z. Government officials, however, argue that there is a trade deficit with Country Z because low labor costs in Country Z allow its companies to manufacture goods cheaply. The officials also claim that economic competition from Country Z is responsible for better prices for Country A’s consumers. Therefore, they say, the most logical way to lower the trade deficit without hurting Country A’s consumers is to _________.
(A) raise the tariffs on goods imported from Country Z
This could be critics' proposal. Not government officials'.
(B) encourage businesses in Country A to reduce their labor costs
Possible and most likely. Lower labor means lower production cost. Better prices for consumers without affecting the competition. This will affect the workers though but the officials are not taking workers into account.
(C) increase taxes on all goods not manufactured in Country A
Affects the consumer as country Z's products will be costlier. And, country A's product prices may also increase. Trades may slow down and competition may be reduced. Competition is required because it is one of the prime reasons for better prices for consumers.
(D) improve the products manufactured by Country A’s companies and market them heavily in Country A.
Quality is not mentioned anywhere. Out of scope.
(E) subsidize all of Country A’s companies that manage to
maintain their prices at the level of the goods produced by
Country Z
This is another good approach for creating competition and to increase the sale of in-house products, while keeping the consumers happy. But, it introduces another factor "subsidies". This is what I am skeptical about. It is kind of spending by government.
Ans: "B"
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Re: critical reasoning [#permalink]
29 May 2011, 08:15
Also go for B! OA?
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Re: critical reasoning [#permalink]
30 May 2011, 00:09
choice is between B and E. E doesn't really tackle the problem of low labor costs. B does tackles this right away.
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Re: critical reasoning [#permalink]
31 May 2011, 08:50
Please post OA
i will go with E ,B takes care of the labor problem but does not talk of the final cost of the product
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Re: critical reasoning [#permalink]
31 May 2011, 09:04
+1 B In E, you havo to make more assumptions. IMO, it is Out of scope.
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Re: critical reasoning
[#permalink]
31 May 2011, 09:04
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