Events & Promotions
|
|
GMAT Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.
Customized
for You
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Nov 2007:30 AM PST
-08:30 AM PST
Learn what truly sets the UC Riverside MBA apart and how it helps in your professional growth
Nov 2211:00 AM IST
-01:00 PM IST
Do RC/MSR passages scare you? e-GMAT is conducting a masterclass to help you learn – Learn effective reading strategies Tackle difficult RC & MSR with confidence Excel in timed test environment- Nov 23
11:00 AM IST
-01:00 PM IST
Attend this free GMAT Algebra Webinar and learn how to master the most challenging Inequalities and Absolute Value problems with ease. 
Nov 2510:00 AM EST
-11:00 AM EST
Prefer video-based learning? The Target Test Prep OnDemand course is a one-of-a-kind video masterclass featuring 400 hours of lecture-style teaching by Scott Woodbury-Stewart, founder of Target Test Prep and one of the most accomplished GMAT instructors.
Updated on: 31 Jan 2022, 08:51
Originally posted by Sajjad1994 on 20 Jun 2018, 11:42.
Last edited by Sajjad1994 on 31 Jan 2022, 08:51, edited 5 times in total.
Last edited by Sajjad1994 on 31 Jan 2022, 08:51, edited 5 times in total.
Updated - Complete topic (610).
Kudos
Bookmarks
Question 1
A
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
25%
(medium)
Question Stats:
68% (02:49) correct
32%
(03:03) wrong
based on 487
sessions
History
Date
Time
Result
Not Attempted Yet
Question 2
E
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
45%
(medium)
Question Stats:
62% (01:36) correct 38%
(01:47) wrong
based on 482
sessions
History
Date
Time
Result
Not Attempted Yet
Question 3
B
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
75%
(hard)
Question Stats:
39% (01:11) correct 61%
(01:29) wrong
based on 478
sessions
History
Date
Time
Result
Not Attempted Yet
Question 4
E
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
15%
(low)
Question Stats:
76% (00:49) correct 24%
(01:05) wrong
based on 453
sessions
History
Date
Time
Result
Not Attempted Yet
New Project RC Butler 2019 - Practice 2 RC Passages Everyday
Passage # 59, Date : 02-MAR-2019
This post is a part of New Project RC Butler 2019. Click here for Details
Passage # 59, Date : 02-MAR-2019
This post is a part of New Project RC Butler 2019. Click here for Details
After the end of World War II, a pervasive, but unfortunately fallacious, economic perspective took hold. Based on the United States’ successful emergence from the Depression, the idea that war was good for an economy became fashionable. However, linking the United States economic recovery with its entry into World War II is a prime example of flawed economic thinking.
Supporters of the war benefits economy theory hold that a country at war is a country with a booming economy. Industry must produce weapons, supplies, food, and clothing for the troops. The increased production necessitates the hiring of more people, reducing unemployment. More employment means more money in the pockets of citizens, who are then likely to go out and spend that money, helping the retail sector of the economy. Retail shops experience an increase in business and may need to hire more workers, further reducing unemployment and adding to the economic momentum. While this scenario sounds good in theory, it does not accurately represent what truly happens in a war time economy.
In reality, the government can fund a war in a combination of three ways. It can raise taxes, cut spending on other areas, or increase the national debt. Each of these strategies has a negative impact on the economy. An increase in taxes takes money out of an individual’s hands, leading to a reduction in consumer spending. Clearly, there is no net benefit to the economy in that case. Cutting spending in other areas has its costs as well, even if they are not as obvious. Any reduction in government spending means the imposition of a greater burden on the benefactors of that government spending. Cutbacks in a particular program mean that the people who normally depend on that program now must spend more of their money to make up for the government cuts. This also takes money out of consumers’ hands and leaves the economy depressed. Of course, a government could go into debt during the war, but such a strategy simply means that at some point in the future, taxes must be increased or spending decreased. Plus, the interest on the debt must be paid as well.
Supporters of the war benefits economy theory hold that a country at war is a country with a booming economy. Industry must produce weapons, supplies, food, and clothing for the troops. The increased production necessitates the hiring of more people, reducing unemployment. More employment means more money in the pockets of citizens, who are then likely to go out and spend that money, helping the retail sector of the economy. Retail shops experience an increase in business and may need to hire more workers, further reducing unemployment and adding to the economic momentum. While this scenario sounds good in theory, it does not accurately represent what truly happens in a war time economy.
In reality, the government can fund a war in a combination of three ways. It can raise taxes, cut spending on other areas, or increase the national debt. Each of these strategies has a negative impact on the economy. An increase in taxes takes money out of an individual’s hands, leading to a reduction in consumer spending. Clearly, there is no net benefit to the economy in that case. Cutting spending in other areas has its costs as well, even if they are not as obvious. Any reduction in government spending means the imposition of a greater burden on the benefactors of that government spending. Cutbacks in a particular program mean that the people who normally depend on that program now must spend more of their money to make up for the government cuts. This also takes money out of consumers’ hands and leaves the economy depressed. Of course, a government could go into debt during the war, but such a strategy simply means that at some point in the future, taxes must be increased or spending decreased. Plus, the interest on the debt must be paid as well.
1. The “pervasive…economic perspective” mentioned in line 1 took hold because
A. observers took the appearance of one phenomenon with another to indicate that one caused the other
B. the U.S. would not have emerged from the Depression had it not entered World War II
C. the booming economy during wartime created thousands of jobs in the U.S.
D. most people are not trained to think in economic terms
E. economists confused an event that was necessary for an outcome to occur with one that is merely sufficient to bring about that outcome
A. observers took the appearance of one phenomenon with another to indicate that one caused the other
B. the U.S. would not have emerged from the Depression had it not entered World War II
C. the booming economy during wartime created thousands of jobs in the U.S.
D. most people are not trained to think in economic terms
E. economists confused an event that was necessary for an outcome to occur with one that is merely sufficient to bring about that outcome
2. Which of the following situations best mirrors the effect that cutting spending in government programs has, as detailed in the passage?
A. Government cutbacks on public works maintenance lead to a deterioration of roads, which creates more work for private construction firms.
B. A decrease in the federal education budget causes certain schools to close, which forces families to send their children to schools that are farther away.
C. A federal decrease in unemployment payments causes some individuals who would otherwise remain on unemployment to seek jobs.
D. Government cuts in housing subsidies results in fewer houses being built.
E. A reduction in the federal spending on food safety inspections leads to a rash of illnesses and an increase in the amount of money spent on medicine.
A. Government cutbacks on public works maintenance lead to a deterioration of roads, which creates more work for private construction firms.
B. A decrease in the federal education budget causes certain schools to close, which forces families to send their children to schools that are farther away.
C. A federal decrease in unemployment payments causes some individuals who would otherwise remain on unemployment to seek jobs.
D. Government cuts in housing subsidies results in fewer houses being built.
E. A reduction in the federal spending on food safety inspections leads to a rash of illnesses and an increase in the amount of money spent on medicine.
3. The passage implies which of the following about a government that funds a war by increasing the national debt?
A. It is no worse off than it would be funding a war by cutting spending or increasing taxes.
B. The initial costs it incurs are less than with the other two methods, but the future costs are greater.
C. It must increase taxes in order to pay off the interest on the debt.
D. If the government does not increase taxes or decrease spending, its economy will not recover.
E. It receives a net benefit to the economy greater than it would achieve with either of the other two methods.
A. It is no worse off than it would be funding a war by cutting spending or increasing taxes.
B. The initial costs it incurs are less than with the other two methods, but the future costs are greater.
C. It must increase taxes in order to pay off the interest on the debt.
D. If the government does not increase taxes or decrease spending, its economy will not recover.
E. It receives a net benefit to the economy greater than it would achieve with either of the other two methods.
4. The second paragraph of the passage performs which of the following functions?
A. It describes the common economic benefits of a wartime economy.
B. It provides the background information necessary to understand the information in the third paragraph.
C. It explains what happened to the United States’ economy during World War II.
D. It presents a possible objection to the author’s main thesis.
E. It helps explain why individuals might hold the viewpoint presented in the first paragraph.
A. It describes the common economic benefits of a wartime economy.
B. It provides the background information necessary to understand the information in the third paragraph.
C. It explains what happened to the United States’ economy during World War II.
D. It presents a possible objection to the author’s main thesis.
E. It helps explain why individuals might hold the viewpoint presented in the first paragraph.
Source: McGraw Hills GMAT 2013 (112-123)
Difficulty Level: 650
Difficulty Level: 650
20 Jun 2018, 18:25
Kudos
Bookmarks
Can anyone explain the answer of Q2.. thanks in advance
Sent from my Lenovo K33a42 using GMAT Club Forum mobile app
Sent from my Lenovo K33a42 using GMAT Club Forum mobile app
20 Jun 2018, 23:12
Kudos
Bookmarks
Hello and Welcome
Hope it Helps
Official Explanation
2. Which of the following situations best mirrors the effect that cutting spending in government programs has, as detailed in the passage?
Explanation
This is an apply information question.You have to see what the passage says about cutting spending, then match that information with one of the answers. According to the passage,“Cutbacks in a particular program mean that the people who normally depend on that program now must spend more of their money to make up for the government cuts.” Answer choice E matches this. Cutbacks in food safety inspection lead to illnesses and people have to spend money they would otherwise not have to in order to compensate. Choice A seems to indicate private construction companies would benefit from the cutbacks, which is not what the passage says. Choice B is close, but it doesn’t say that sending the children to a different school costs people more money. Choice C also seems to detail a potential benefit. Choice D says fewer houses are built but it doesn’t indicate how people have to spend more money to compensate.
Answer: E
Explanation
This is an apply information question.You have to see what the passage says about cutting spending, then match that information with one of the answers. According to the passage,“Cutbacks in a particular program mean that the people who normally depend on that program now must spend more of their money to make up for the government cuts.” Answer choice E matches this. Cutbacks in food safety inspection lead to illnesses and people have to spend money they would otherwise not have to in order to compensate. Choice A seems to indicate private construction companies would benefit from the cutbacks, which is not what the passage says. Choice B is close, but it doesn’t say that sending the children to a different school costs people more money. Choice C also seems to detail a potential benefit. Choice D says fewer houses are built but it doesn’t indicate how people have to spend more money to compensate.
Answer: E
Hope it Helps
raveesh1203
