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# Economies in which a high percentage of resources are

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GMAT Club Legend
Joined: 07 Jul 2004
Posts: 5036

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Location: Singapore
Economies in which a high percentage of resources are [#permalink]

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15 Oct 2005, 13:11
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Economies in which a high percentage of resources are invested in research and development show greater growth in the long run than do those in which resources are channeled into consumption. Japanese workers spend a higher percentage of their income investing in research and development than do American workers.

To grow as fast as Japan has in the past three decades, the United States must change the tax code in order to encourage savings and investment and discourage debt.

Which of the following, if true, tends to weaken the argument?
(A) Japanese research is more focused on consumers than is research by American firms.
(B) Class mobility, highly valued in American culture, is encouraged by a growing rather than a stagnant economy.
(C) Studies have shown that countries with high consumption rates prosper in the short run.
(D) Proposed changes to the tax code could involve strict limits on the deductability of interest, and increased allowance for research.
(E) Because a decreasing percentage of the United States is under 40, an age when savings are traditionally low, the savings rate will increase without changes to the tax code.

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Director
Joined: 21 Aug 2005
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15 Oct 2005, 17:06
E

To weaken the argument, we need to show that a law is not necessary to achieve the desired result. This is shown in E.

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Director
Joined: 14 Sep 2005
Posts: 984

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Location: South Korea

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16 Oct 2005, 18:28
By POE, only (E) is left.

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VP
Joined: 13 Jun 2004
Posts: 1112

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Location: London, UK
Schools: Tuck'08

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16 Oct 2005, 19:12
By POE i also went for E

However I think the question is not so clear :

Economies in which a high percentage of resources are invested in research and development show greater growth in the long run than do those in which resources are channeled into consumption. Japanese workers spend a higher percentage of their income investing in research and development than do American workers.

To grow as fast as Japan has in the past three decades, the United States must change the tax code in order to encourage savings and investment and discourage debt.

The facts tell us that if you invest in R&D there will be a greater gowth on a long term basis. Then the following paragraph just asks the good solution to grow as fast as japan. If USA can reach the same growth than Japan in one day, why not ? It is not said that they want to spend the same amount of time to reach this target.

In that case C would be ok. I mean I think that E is the correct answer but I still think the way this problem written has been is questionnable. Maybe I've overlooked at it

Kudos [?]: 51 [0], given: 0

16 Oct 2005, 19:12
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