It is currently 16 Dec 2017, 04:56

Close

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

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Business are suffering because of a lack of money available for develo

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

1 KUDOS received
Manager
Manager
avatar
Joined: 14 Mar 2008
Posts: 130

Kudos [?]: 39 [1], given: 0

Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 28 Mar 2008, 11:18
1
This post received
KUDOS
18
This post was
BOOKMARKED
00:00
A
B
C
D
E

Difficulty:

  85% (hard)

Question Stats:

52% (01:29) correct 48% (01:53) wrong based on 4119 sessions

HideShow timer Statistics

Business are suffering because of a lack of money available for development loans. To help businesses, the government plans to modify the income-tax structure in order to induce individual taxpayers to put a larger portion of their incomes into retirement savings accounts, because as more money is deposited in such accounts, more money becomes available to borrowers.

Which of the following, if true, raises the most serious doubt regarding the effectiveness of the government's plan to increase the amount of money available for development loans for businesses?

(A) When levels of personal retirement savings increase, consumer borrowing always increase correspondingly

(B) The increased tax revenue the government would receive as a result of business expansino would not offset the loss in revenue from personal income taxes during the first year of the plan.

(C) Even with tax incentives, some people will choose not to increase their levels of retirement savings.

(D) Bankers generally will not continue to lend money to businesses whose prospective earnings are insufficient to meet their loan repayment schedules.

(E) The modified tax structure would give all taxpayers, regardless of their incomes, the same tax savings for a given increase in their retirement savings.
[Reveal] Spoiler: OA

Kudos [?]: 39 [1], given: 0

1 KUDOS received
Intern
Intern
User avatar
Joined: 22 Feb 2008
Posts: 9

Kudos [?]: 2 [1], given: 0

Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 28 Mar 2008, 16:00
1
This post received
KUDOS
I think its C.
the governments assumption is that the individual taxpayers are going to put more money into retirement savings. C weakens that assumption


Business are suffering because of a lack of money available for development loans. To help businesses, the government plans to modify the income-tax structure in order to induce individual taxpapyers to put a larger portion of their incomes into retirement savings accounts, because as more money is deposited in such accounts, more money becomes available to borrowers.

Which of the following, if true, raises the most serious doubt regarding the effectiveness of the government's plan to increase the amount of money available for development loans for businesses?

A. When levels of personal retirement savings increase, consumer borrowing always increase correspondingly -- consumer can be both individual and businesses
B. The increased tax revenue the government would receive as a result of business expansino would not offset the loss in revenue from personal income taxes during the first year of the plan. -- It can be after one year....there is no mention of time constarint anywhere
C. Even with tax incentives, some people will choose not to increase their levels of retirement savingsIf people dont put any more money then the Govt.'s plan failsD. Bankers generally will not continue to lend money to businesses whose prospective earnings are insufficient to meet their loan repayment schedules.Nothing related to the Govt.'s plans
E. The modified tax structure would give all taxpayers, regardless of their incomes, the same tax savings for a given increase in their retirement savings. Strengthens


What do you think?

Kudos [?]: 2 [1], given: 0

CEO
CEO
User avatar
Joined: 17 May 2007
Posts: 2945

Kudos [?]: 678 [0], given: 210

Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 29 Mar 2008, 05:24
1
This post was
BOOKMARKED
I feel its A.

If consumers borrow more, then the money left for development loans remains the same or reduces.

C is not correct, because "some" people may choose not to increase retirements, but some will, hence there will be at least some more money going to the bank to be available for loans.

zhenmaster wrote:
Business are suffering because of a lack of money available for development loans. To help businesses, the government plans to modify the income-tax structure in order to induce individual taxpapyers to put a larger portion of their incomes into retirement savings accounts, because as more money is deposited in such accounts, more money becomes available to borrowers.

Which of the following, if true, raises the most serious doubt regarding the effectiveness of the government's plan to increase the amount of money available for development loans for businesses?

A. When levels of personal retirement savings increase, consumer borrowing always increase correspondingly
B. The increased tax revenue the government would receive as a result of business expansino would not offset the loss in revenue from personal income taxes during the first year of the plan.
C. Even with tax incentives, some people will choose not to increase their levels of retirement savings.
D. Bankers generally will not continue to lend money to businesses whose prospective earnings are insufficient to meet their loan repayment schedules.
E. The modified tax structure would give all taxpayers, regardless of their incomes, the same tax savings for a given increase in their retirement savings.

Kudos [?]: 678 [0], given: 210

1 KUDOS received
Intern
Intern
avatar
Joined: 05 Jul 2006
Posts: 9

Kudos [?]: 1 [1], given: 0

Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 29 Mar 2008, 05:35
1
This post received
KUDOS
The answer is A according to me. We need to find something that would suggest that more money might not be available for business to borrow. Answer A explains the reason, if people borrow more than money may not be available for businesses to borrow.

C states that some might not take advantage of tax incentives but that does not mean all the people will choose to do so. More people might still take advantage of tax incentives and hence it leaves open a possibility that more money might be available for businesses to borrow.

Can you please tell us the OA.

Thanks.

Kudos [?]: 1 [1], given: 0

Senior Manager
Senior Manager
User avatar
Joined: 07 Feb 2008
Posts: 310

Kudos [?]: 188 [0], given: 1

Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 30 Mar 2008, 08:31
I'll go for C

Kudos [?]: 188 [0], given: 1

Manager
Manager
avatar
Joined: 14 Mar 2008
Posts: 130

Kudos [?]: 39 [0], given: 0

Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 30 Mar 2008, 16:33
OA is (A)

I chose C as well ...

Kudos [?]: 39 [0], given: 0

7 KUDOS received
Manager
Manager
avatar
Joined: 22 Jul 2009
Posts: 195

Kudos [?]: 555 [7], given: 6

Location: Manchester UK
Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 22 Dec 2009, 12:00
7
This post received
KUDOS
81
This post was
BOOKMARKED
Businesses are suffering because of a lack of money available for development loans. To help businesses, the government plans to modify the income-tax structure in order to induce individual taxpayers to put a larger portion of their incomes into retirement savings accounts, because as more money is deposited in such accounts, more money becomes available to borrowers.

Which of the following, if true, raises the most serious doubt regarding the effectiveness of the government's plan to increase the amount of money available for development loans for businesses?

(A) When levels of personal retirement savings increase, consumer borrowing always increases correspondingly.

(B) The increased tax revenue the government would receive as a result of business expansion would not offset the loss in revenue from personal income taxes during the first year of the plan.

(C) Even with tax incentives, some people will choose not to increase their levels of retirement savings.

(D) Bankers generally will not continue to lend money to businesses whose prospective earnings are insufficient to meet their loan repayment schedules.

(E) The modified tax structure would give all taxpayers, regardless of their incomes, the same tax savings for a given increase in their retirement savings.

Please some one explain this...as i am not convinced with the explanation from OG

Last edited by carcass on 07 Jan 2016, 03:25, edited 1 time in total.
Edited the post

Kudos [?]: 555 [7], given: 6

Manager
Manager
avatar
Joined: 22 Jul 2009
Posts: 195

Kudos [?]: 555 [0], given: 6

Location: Manchester UK
Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 22 Dec 2009, 12:35
Still waiting for some more replies before posting OA

Kudos [?]: 555 [0], given: 6

19 KUDOS received
Manager
Manager
User avatar
Joined: 25 Aug 2009
Posts: 162

Kudos [?]: 206 [19], given: 3

Location: Streamwood IL
Schools: Kellogg(Evening),Booth (Evening)
WE 1: 5 Years
Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 22 Dec 2009, 13:42
19
This post received
KUDOS
3
This post was
BOOKMARKED
Fact1: Businesses are suffering because of a lack of money available for development loans.
Fact 2: To help businesses, the government plans to modify the income-tax structure in order to induce individual taxpayers to put a larger portion of their incomes into retirement savings accounts
Conclusion: Because as more money is deposited in such accounts, more money becomes available to borrowers.
Weakness: Do the people actually put money in their retirement accounts? This is not the right weakness as it's mentioned in the fact section and not the conclusion section.(hence C is incorrect).

Right Weakness: Money deposited into retirements accounts might not result is more money available to borrowers (Mentioned in the conclusion).
Scan through the choices which states this -
A looks like the closest match.
_________________

Rock On

Kudos [?]: 206 [19], given: 3

Director
Director
User avatar
Joined: 24 Aug 2007
Posts: 924

Kudos [?]: 1561 [0], given: 40

WE 1: 3.5 yrs IT
WE 2: 2.5 yrs Retail chain
Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 14 May 2010, 03:47
Even I marked C but I doubt the OA in OG. The last line of argument says that -

because as more money is deposited in such accounts, more money becomes available to borrowers.


While A says that -
(A) When levels of personal retirement savings increase, consumer borrowing always increases correspondingly.

This is ambiguous. I think to make this a correct argument, the last line of the passage should have been -
because as more money is deposited in such accounts, more money becomes available to bankers/lenders.


Experts, please comment.
_________________

Want to improve your CR: http://gmatclub.com/forum/cr-methods-an-approach-to-find-the-best-answers-93146.html
Tricky Quant problems: http://gmatclub.com/forum/50-tricky-questions-92834.html
Important Grammer Fundamentals: http://gmatclub.com/forum/key-fundamentals-of-grammer-our-crucial-learnings-on-sc-93659.html

Kudos [?]: 1561 [0], given: 40

Director
Director
User avatar
Joined: 24 Aug 2007
Posts: 924

Kudos [?]: 1561 [0], given: 40

WE 1: 3.5 yrs IT
WE 2: 2.5 yrs Retail chain
Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 14 May 2010, 03:48
Also, A is just the prephased of last sentence of the argument.
_________________

Want to improve your CR: http://gmatclub.com/forum/cr-methods-an-approach-to-find-the-best-answers-93146.html
Tricky Quant problems: http://gmatclub.com/forum/50-tricky-questions-92834.html
Important Grammer Fundamentals: http://gmatclub.com/forum/key-fundamentals-of-grammer-our-crucial-learnings-on-sc-93659.html

Kudos [?]: 1561 [0], given: 40

20 KUDOS received
VP
VP
avatar
Joined: 17 Feb 2010
Posts: 1469

Kudos [?]: 806 [20], given: 6

Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 14 May 2010, 11:13
20
This post received
KUDOS
6
This post was
BOOKMARKED
I picked the wrong OA too.....but after reading thru the explanation I understand that I was wrong.

The premise mean to say that as more money is deposited in such
accounts, more money becomes available to borrowers ( business borrowers).

Now A says that as personal retirement savings increase, consumer borrowing always increases correspondingly.....the important point here is that consumer borrowing is different from business borrowing

The government is intending to increase retirement savings so that businesses can borrow but what if because of increase in retirement savings end consumers borrowing also increases correspondingly....this will defeat the purpose of the plan.

Kudos [?]: 806 [20], given: 6

Manager
Manager
avatar
Joined: 16 Feb 2010
Posts: 179

Kudos [?]: 34 [0], given: 17

Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 15 May 2010, 00:36
agreed with seekmba
if people would put more money in retirement saving plan they eventualy end up very less personal saving hence they could become borrowers themselves, and this could frustrate govt's plan, hence the nas must be A

Kudos [?]: 34 [0], given: 17

Intern
Intern
avatar
Joined: 10 Aug 2007
Posts: 4

Kudos [?]: [0], given: 0

Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 14 Dec 2010, 18:57
I don't see why C doesn't weaken the conclusion.

The OG concludes that effectiveness of the plan would be determined not by what "some" people do but by what "most" people do. I would argue that by logic, some means at least one i.e. It can be 1, most or all!

We have to take the choices as true since it is a weaken question i.e. for C, if the people decide not to put money into retirement savings account, then the conclusion is weakened in that the plan to provide more money to borrowers via the retirement savings account will not work.

Kudos [?]: [0], given: 0

Manager
Manager
avatar
Joined: 31 May 2010
Posts: 94

Kudos [?]: 48 [0], given: 25

Reviews Badge
Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 14 Dec 2010, 19:43
Plan of government is to increase the money so that it can meet the loan amount required. Therefore, govt thinking to modify the tax structure to get the more money collected .
But, if due to this plan, if money demanded by the business/consumer also increases, then this plan will not work

Hence A
_________________

Kudos if any of my post helps you !!!

Kudos [?]: 48 [0], given: 25

Verbal Forum Moderator
avatar
Joined: 31 Jan 2010
Posts: 485

Kudos [?]: 163 [0], given: 149

WE 1: 4 years Tech
Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 15 Dec 2010, 01:11
sagarsabnis wrote:
Businesses are suffering because of a lack of money available for development loans. To help businesses, the
government plans to modify the income-tax structure in order to induce individual taxpayers to put a larger
portion of their incomes into retirement savings accounts, because as more money is deposited in such
accounts, more money becomes available to borrowers.
Which of the following, if true, raises the most serious doubt regarding the effectiveness of the government's
plan to increase the amount of money available for development loans for businesses?
(A) When levels of personal retirement savings increase, consumer borrowing always increases
correspondingly.
(8) The increased tax revenue the government would receive as a result of business expansion would not
offset the loss in revenue from personal income taxes during the first year of the plan.
(e) Even with tax incentives, some people will choose not to increase their levels of retirement savings.
(D) Bankers generally will not continue to lend money to businesses whose prospective earnings are
insufficient to meet their loan repayment schedules.
(E) The modified tax structure would give all taxpayers, regardless of their incomes, the same tax savings for
a given increase in their retirement savings.

Please some one explain this...as i am not convinced with the explanation from OG

What abt E ?
If the taxes that people save after increasing their retirement savings does not differ from what it would have been had they not increased their retirement saving, then people would not have incentive to save.
_________________

My Post Invites Discussions not answers
Try to give back something to the Forum.I want your explanations, right now !
Please let me know your opinion about the Chandigarh Gmat Centrehttp://gmatclub.com/forum/gmat-experience-at-chandigarh-india-centre-111830.html

Kudos [?]: 163 [0], given: 149

Verbal Forum Moderator
avatar
Joined: 31 Jan 2010
Posts: 485

Kudos [?]: 163 [0], given: 149

WE 1: 4 years Tech
Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 15 Dec 2010, 01:12
mundasingh123 wrote:
sagarsabnis wrote:
Businesses are suffering because of a lack of money available for development loans. To help businesses, the
government plans to modify the income-tax structure in order to induce individual taxpayers to put a larger
portion of their incomes into retirement savings accounts, because as more money is deposited in such
accounts, more money becomes available to borrowers.
Which of the following, if true, raises the most serious doubt regarding the effectiveness of the government's
plan to increase the amount of money available for development loans for businesses?
(A) When levels of personal retirement savings increase, consumer borrowing always increases
correspondingly.
(8) The increased tax revenue the government would receive as a result of business expansion would not
offset the loss in revenue from personal income taxes during the first year of the plan.
(e) Even with tax incentives, some people will choose not to increase their levels of retirement savings.
(D) Bankers generally will not continue to lend money to businesses whose prospective earnings are
insufficient to meet their loan repayment schedules.
(E) The modified tax structure would give all taxpayers, regardless of their incomes, the same tax savings for
a given increase in their retirement savings.

Please some one explain this...as i am not convinced with the explanation from OG

What abt E ?
If the taxes that people save after increasing their retirement savings does not differ from what it would have been had they not increased their retirement saving, then people would not have incentive to save.

I think i misread the option .
_________________

My Post Invites Discussions not answers
Try to give back something to the Forum.I want your explanations, right now !
Please let me know your opinion about the Chandigarh Gmat Centrehttp://gmatclub.com/forum/gmat-experience-at-chandigarh-india-centre-111830.html

Kudos [?]: 163 [0], given: 149

Intern
Intern
avatar
Joined: 10 Aug 2007
Posts: 4

Kudos [?]: [0], given: 0

Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 16 Dec 2010, 13:02
saurabhgoel wrote:
Plan of government is to increase the money so that it can meet the loan amount required. Therefore, govt thinking to modify the tax structure to get the more money collected .
But, if due to this plan, if money demanded by the business/consumer also increases, then this plan will not work

Hence A


I'm not saying that A is wrong. But the explanation still doesn't rule C out.

As per my response above, The plan would fail because people won't put more money than is currently in a retirement savings account in spite of changes to the tax structure.

I think the reason that OG quotes is not good enough to rule out option C.

Kudos [?]: [0], given: 0

12 KUDOS received
Director
Director
User avatar
Joined: 21 Dec 2010
Posts: 619

Kudos [?]: 287 [12], given: 51

Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 28 Apr 2011, 03:09
12
This post received
KUDOS
2
This post was
BOOKMARKED
C states 'Even with tax incentives, some people will choose not to increase their levels of retirement savings.'

but that also means some people will choose to increase their levels of retirement savings, hence funds available for borrowing will still increase. and that increase amount will be available for businesses to borrow.

so C doesn't weaken the conclusion .

A states that number of borrowers will increase , this may result in even lesser funds for businesses to borrow than were previously available.

hence A seriously weakens the conclusion
_________________

What is of supreme importance in war is to attack the enemy's strategy.

Kudos [?]: 287 [12], given: 51

1 KUDOS received
Manager
Manager
User avatar
Status: Dream big, work hard, and drink gallons of beer!
Joined: 11 Jun 2011
Posts: 204

Kudos [?]: 62 [1], given: 33

Concentration: Finance, General Management
GMAT Date: 10-01-2011
WE: Web Development (Consulting)
Re: Business are suffering because of a lack of money available for develo [#permalink]

Show Tags

New post 28 Jul 2011, 20:33
1
This post received
KUDOS
I was contemplating between C and D. Never thought the answer will be A. Any perspectives about D will be highly appreciated.
_________________

If I look absent-minded or insane, I am just living a dream of being successful. If you still wonder why I am like this, you have no idea how success tastes like!

Kudos [?]: 62 [1], given: 33

Re: Business are suffering because of a lack of money available for develo   [#permalink] 28 Jul 2011, 20:33

Go to page    1   2   3   4   5    Next  [ 91 posts ] 

Display posts from previous: Sort by

Business are suffering because of a lack of money available for develo

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.