During the 1960's and 1970's, the primary economic development strate

Question

During the 1960's and 1970's, the primary economic development strategy of local governments in the United States was to attract manufacturing industries. Unfortunately, this strategy was usually implemented at another community's expense: many manufacturing facilities were lured away from their moorings elsewhere through tax incentives and slick promotional efforts. Through the transfer of jobs and related revenues that resulted from this practice, one town's triumph could become another town's tragedy.

In the 1980's the strategy shifted from this zero-sum game to one called “high-technology development,” in which local governments competed to attract newly formed high-technology manufacturing firms. Although this approach was preferable to victimizing other geographical areas by taking their jobs, it also had its shortcomings: high-tech manufacturing firms employ only a specially trained fraction of the manufacturing workforce, and there simply are not enough high-tech firms to satisfy all geographic areas.

Recently, local governments have increasingly come to recognize the advantages of yet a third strategy: the promotion of homegrown small businesses. Small indigenous businesses are created by a nearly ubiquitous resource, local entrepreneurs. With roots in their communities, these individuals are less likely to be enticed away by incentives offered by another community. Indigenous industry and talent are kept at home, creating an environment that both provides jobs and fosters further entrepreneurship.   1 
 Answer: E 
 1. The primary purpose of the passage is to

(A) advocate more effective strategies for encouraging the development of high- technology enterprises in the United States 
(B) contrast the incentives for economic development offered by local governments with those offered by the private sector 
(C) acknowledge and counter adverse criticism of programs being used to stimulate local economic development 
(D) define and explore promotional efforts used by local governments to attract new industry 
(E) review and evaluate strategies and programs that have been used to stimulate economic development

2 
 Answer: C 
 2. The passage suggests which of the following about the majority of United States manufacturing industries before the high-technology development era of the 1980's?

(A) They lost many of their most innovative personnel to small entrepreneurial enterprises. 
(B) They experienced a major decline in profits during the 1960’s and 1970’s. 
(C) They could provide real economic benefits to the areas in which they were located. 
(D) They employed workers who had no specialized skills. 
(E) They actively interfered with local entrepreneurial ventures.

3 
 Answer: C 
 3. The tone of the passage suggests that the author is most optimistic about the economic development potential of which of the following groups?

(A) Local governments 
(B) High-technology promoters 
(C) Local entrepreneurs 
(D) Manufacturing-industry managers 
(E) Economic development strategists

4 
 Answer: C 
 4. The passage does NOT state which of the following about local entrepreneurs?

(A) They are found nearly everywhere. 
(B) They encourage further entrepreneurship. 
(C) They attract out-of-town investors. 
(D) They employ local workers. 
(E) They are established in their communities.

5 
 Answer: E 
 5. The author of the passage mentions which of the following as an advantage of high-technology development?

(A) It encourages the modernization of existing manufacturing facilities. 
(B) It promotes healthy competition between rival industries. 
(C) It encourages the growth of related industries. 
(D) It takes full advantage of the existing workforce. 
(E) It does not advantage one local workforce at the expense of another.

Skywalker18 · Accepted Answer

Took 6 mins 15 seconds, including 2 mins 15 seconds to read

1. The primary purpose of the passage is to
(E) review and evaluate strategies and programs that have been used to stimulate economic development - it discusses three strategies

2. The passage suggests which of the following about the majority of United States manufacturing industries before the high-technology development era of the 1980's?
(C) They could provide real economic benefits to the areas in which they were located. -"Through the transfer of jobs and related revenues that resulted from this practice, one town's triumph could become another town's tragedy."

3. The tone of the passage suggests that the author is most optimistic about the economic development potential of which of the following groups?
(C) Local entrepreneurs - the last para talks only good about them

4. The passage does NOT state which of the following about local entrepreneurs?
(C) They attract out-of-town investors.

5. The author of the passage mentions which of the following as an advantage of high-technology development?
(E) It does not advantage one local workforce at the expense of another. -"Although this approach was preferable to victimizing other geographical areas by taking their jobs"

goforgmat · Answer

The first line in the passage 
During the 1960's and 1970's,  the primary economic development strategy of local governments  in the United States was to attract manufacturing industries.
we can infer from this that manufacturing industries provided economic benefits.

Hope this resolves your doubt.

sobby · Answer

6:48 sec(including reading) ..4 out of 5 were correct..missed the last one...

For last question,Most will be narrow down to A and E. For last question why A is wrong: Govt try to attract newly formed high-technology manufacturing firms(1st line of 2nd paragraph).It is not benefiting existing one.

nikhilbhide · Answer

Why answer of first question (primary purpose of passage) is E and not C. What is the subtle difference between both of them? Pls explain

aceGMAT21 · Answer

Hi  nikhilbhide ,

To answer your question we first need to understand the structure of the passage.

1st PARA :  During the 1960's and 1970's, local governments in the United States were looking for the primary economic development of their community/town. They opted a strategy -- this strategy was usually implemented at another community's expense.

2nd PARA :  In the 1980's the strategy shifted from this zero-sum game to one called “high-technology development,” in which local governments competed to attract newly formed high-technology manufacturing firms.

3rd PARA :  third strategy: the promotion of homegrown small businesses.

As can be understood from the above structure and reading the details of each para, the author is talking about 3 strategies out of which the first 2 did not worked well due to some limitations. The tone of author for the 3rd strategy is positive and optimistic. So, local governments have increasingly come to recognize the advantages of it.

Now, coming to the question,
 1. The primary purpose of the passage is to

(C)  acknowledge   and   counter adverse criticism   of programs being used to stimulate local economic development   
 The author is simply reviewing and evaluating the 3 strategies as mentioned in the passage. Also, only the limitations are mentioned for the first 2 of the above mentioned strategies. There is no direct and adverse criticism which is countered by the author. Also, only the 3rd strategy is acknowledged by the author, because of the optimistic view of the author we can say this. So option C is incorrect.

(E) review and evaluate strategies and programs that have been used to stimulate economic development 
 Correct Answer. As discussed above.

Hope it clears your doubt. Let me know if you have any questions.

Thanks.
-Varun

praveenmittal95605 · Answer

Could you please share the explanation for Q 3 and 4

GMATNinja · Answer

In the first paragraph, the author describes the shortcomings of the strategy used in the 60s and 70s (attracting manufacturing industries). In the second paragraph, the author describes the shortcomings of the strategy used in the 80s ("high-technology development"). Then in the third paragraph, the author discusses the  advantages  of a third strategy (the promotion of homegrown small businesses, which are created by local entrepreneurs).

To summarize, the author discusses the  shortcomings  of two strategies and then the  advantages  of a third strategy. "  are less likely to be enticed away by incentives offered by another community. Indigenous industry and talent are kept at home, creating an environment that both provides jobs and fosters further entrepreneurship." Thus the author seems most optimistic about the third strategy, which supports local entrepreneurs.

As for question 4, refer to the last paragraph:

akshaykotha · Answer

I think answer to Q5 has more meaning than expected.

If you refer the below part:
 
The first sentence only says it was preferable and then mentions shortcomings. Not having enough high-tech firms implies one area cannot offer jobs because of the special training needed. That means,  it doesn't advantage one local community at the expense of other community . The advantage of high-tech development is with respect to the main purpose of the passage. To corroborate this, the question stem mentions:

debtanuB · Answer

GMATNinja   GMATNinja Two

for the 2nd question, I need you help..!!

I eliminated A,B, & D as it cannot be inferred from para 1. Between C & E, I choose E my reason-
Para 1 last line- "Through the transfer of jobs and related revenues that resulted from this practice, one town's triumph could become another town's tragedy." Made me think another town's tragedy=bad effect of industry(after being invited by the govt.)!!

Later on I read the 1st line of para 1- "During the 1960's and 1970's, the primary economic development strategy of local governments in the United States was to attract manufacturing industries." It made me think that maybe this is the right reason for choice C to be the right one. We can infer that industries were invited in an attempt by local govt. to improve their locality's economy. Though I'm not sure about this!?

Please help me out!!

Thanks & Regards~

Businessconquerer · Answer

You do not know that they interfered with the entrepreneurial ventures.
We just know that before 80's, which is in the first paragraph, that they did something good for one and something bad for others happened

GMATNinja · Answer

The first paragraph implies that "jobs and related revenues" are moved from Town A to Town B when a manufacturing facility was lured to Town B from Town A (through tax incentives and slick promotional efforts). Now that Town B has the manufacturing facility, it will enjoy those "real economic benefits" (jobs and related revenues).

The areas in which the manufacturing industries  are located  (i.e. Town B) are the areas that enjoy those economic benefits. Meanwhile, the towns that LOSE the manufacturing facilities, etc., (i.e. Town A), LOSE jobs and related revenues. So Town B's triumph is Town A's tragedy.

As for (E), the passage doesn't say anything about negative consequences to  local  entrepreneurs once manufacturing industry comes to town. In other words, we have no reason to suspect that the movement of manufacturing from Town A to Town B will interfere with the local entrepreneurs in Town B -- or their entrepreneurial ventures.

The only "bad effect of industry" described in the passage is the loss of jobs and revenue in the former town when, for example, a manufacturing facility moves from one town to another.

I hope this helps!

GMATmronevsall · Answer

This is the first time i got 5/5 correct. But after taking a look at stats I am no longer thrilled at all.

nkshmalik1 · Answer

Can anyone elaborate q5? 
Para 2 says "Although this approach was preferable to victimizing other geographical areas by taking their jobs", doesn't that mean the approach seems to be taking the jobs from one area victimizing other? It feels negative of this approach. Kindly help in understanding this.

Thanks 
   Posted from my mobile device

TheGriffin · Answer

got 4 on 5 correct , 7 mins flat . Made silly mistake in Q 5 and got it wrong

testbug123 · Answer

GMATNinja  could you please tell me how is Question 5 solved?

GMATNinja · Answer

Question 5

Question 5 asks us to identify an advantage of high-technology development (HTD) mentioned in the passage. This type of development is discussed in the second paragraph. Much of this paragraph is devoted to a discussion of the shortcomings of HTD, but the author briefly mentions what appears to be a potential advantage of HTD in the second sentence of the paragraph. He/she says “this approach was preferable to victimizing other geographical areas by taking their jobs....” With that in mind, let’s take a look at the answer choices.

(A) is tempting. The term “high-technology development” seems to imply some level of modernization. However, in describing HTD, the author notes that local governments compete “to attract NEWLY formed high-technology manufacturing firms.” So, even if HTD encourages the modernization of EXISTING manufacturing facilities, this is not mentioned in the passage. Eliminate (A).

HTD does seem to promote competition, but not between rival  industries . The passage mentions that it causes local  governments , not industries, to compete. Eliminate (B).

It’s totally possible that HTD encourages the growth of related industries. The problem is that the question asks for an advantage  mentioned  in the passage. The passage simply doesn’t talk about the effect of HTD on manufacturing-related industries. Eliminate (C).

HTD actually does the opposite of what is described in (D). According to the author, one of the shortcomings of HTD is that “high-tech manufacturing firms employ only a specially trained fraction of the manufacturing workforce.” So, HTD does not take full advantage of the existing workforce, and we can eliminate (D).

Remember, the author mentioned that HTD “was preferable to victimizing other geographical areas by taking their jobs.” In other words, unlike the strategy discussed in the first paragraph, HTD did not aim to lure  existing  manufacturing facilities from one geography to another. Instead, by attempting to attract  newly  formed high-technology firms, HTD provided jobs to one area without stealing jobs from another area. This is exactly what is described by (E).

(E) is an advantage of HTD mentioned in the passage, and it is the correct answer for question 5.

I hope that helps!

VBudhew · Answer

What is the level of this RC???? 300-400????

Taulark1 · Answer

Hi  GMATNinja ,

"it also had its shortcomings: high-tech manufacturing firms employ only a specially trained fraction of the manufacturing workforce, and there simply are not enough high-tech firms to satisfy all geographic areas."

Is my interpretation correct ? - 
Shortcoming ->High tech firms only employed specially trained fraction of the manufacturing workforce, so all the manufacturing workforce for the geographic areas couldn't get jobs. (Hence didn't satisfy all geographic areas).

GMATNinja · Answer

The author lists two separate shortcomings of high-tech development in this sentence:

1) It only employs specially trained employees, leaving the rest of the workforce out of luck.
2) Separately, there aren't enough high-tech firms to help the economies of all geographic regions. This implies that even the specially trained employees are in danger, because there aren't enough companies to give them jobs.

The first shortcoming isn't necessarily causing the second shortcoming. Instead, they are both factors that weigh against high-tech development as a universally great strategy.

I hope that helps!

During the 1960's and 1970's, the primary economic development strate

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GMAT Reading Comprehension (RC) Questions

During the 1960's and 1970's, the primary economic development strate

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615 to 715 in 15 Days (Ria's Strategies)

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