It is currently 22 Nov 2017, 01:13

### 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

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

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# Economies in which a high percentage of resources are

Author Message
Manager
Joined: 20 Sep 2005
Posts: 54

Kudos [?]: 3 [0], given: 0

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

### Show Tags

28 Oct 2005, 14:44
00:00

Difficulty:

(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions

### HideShow timer Statistics

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.

Kudos [?]: 3 [0], given: 0

SVP
Joined: 28 May 2005
Posts: 1699

Kudos [?]: 480 [0], given: 0

Location: Dhaka

### Show Tags

28 Oct 2005, 15:57
I got B.
_________________

hey ya......

Kudos [?]: 480 [0], given: 0

Director
Joined: 09 Jul 2005
Posts: 589

Kudos [?]: 67 [0], given: 0

### Show Tags

28 Oct 2005, 16:09
On the basis that investing in reasearch and developement leads to a greater growth in the long run, the author argues that it is necessary (must) change the tax code to grow as fast as Japan has done. Here the clue word is must. It introduces the necessity meaning. In order to weaken the argument one have to find some evidence proving that it is not necessary to change the taxt code in order to grow as fast as Japan has done. This evidence is introduced in E.

Last edited by automan on 29 Oct 2005, 05:48, edited 1 time in total.

Kudos [?]: 67 [0], given: 0

Director
Joined: 14 Sep 2005
Posts: 984

Kudos [?]: 220 [0], given: 0

Location: South Korea

### Show Tags

28 Oct 2005, 17:48
Let me go for (E).

The article says that America MUST change the tax code in order to increase savings. However, according to (E), the tax code need not be changed since the savings will increase even without the change of tax code.
_________________

Auge um Auge, Zahn um Zahn !

Kudos [?]: 220 [0], given: 0

SVP
Joined: 16 Oct 2003
Posts: 1798

Kudos [?]: 173 [0], given: 0

### Show Tags

28 Oct 2005, 17:52
E.

C may or may not fit for US. Also it does not speak about overhauling tax system.

Kudos [?]: 173 [0], given: 0

Manager
Joined: 20 Sep 2005
Posts: 54

Kudos [?]: 3 [0], given: 0

### Show Tags

28 Oct 2005, 17:54
what is wrong with (D)

Kudos [?]: 3 [0], given: 0

SVP
Joined: 16 Oct 2003
Posts: 1798

Kudos [?]: 173 [0], given: 0

### Show Tags

28 Oct 2005, 18:23
[quote="pavrnd"]what is wrong with (D)[/quote

We should be concerned about tax and not interest.

Kudos [?]: 173 [0], given: 0

Senior Manager
Joined: 05 Jan 2005
Posts: 251

Kudos [?]: 5 [0], given: 0

### Show Tags

28 Oct 2005, 21:04
D !

Kudos [?]: 5 [0], given: 0

Director
Joined: 15 Aug 2005
Posts: 793

Kudos [?]: 75 [0], given: 0

Location: Singapore

### Show Tags

28 Oct 2005, 22:11
This one is a clear E.

The argument is this - for US to reach heightened levels of R&D, the govt has to induce higher savings by altering the tax code.

So, a weakening statement will be one that provides an alternative way to increase the savings.

E says that as a majority of the US population is above 40 (age where people by default tend to save more), altering tax is not required. Savings will increase, coutesy the demography of the US.

D is wrong as we are not concerned about interest deductability and also D is beyond the scope of the argument.
_________________

Cheers, Rahul.

Kudos [?]: 75 [0], given: 0

Manager
Joined: 19 Jun 2004
Posts: 79

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

### Show Tags

28 Oct 2005, 22:31
no doubt.. E

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

Senior Manager
Joined: 29 Aug 2005
Posts: 498

Kudos [?]: 14 [0], given: 0

### Show Tags

29 Oct 2005, 00:22
E is the answer. What is the OA?

Kudos [?]: 14 [0], given: 0

Manager
Joined: 20 Sep 2005
Posts: 54

Kudos [?]: 3 [0], given: 0

### Show Tags

30 Oct 2005, 16:01
OA is E

Kudos [?]: 3 [0], given: 0

Senior Manager
Joined: 11 May 2004
Posts: 453

Kudos [?]: 56 [0], given: 0

Location: New York

### Show Tags

31 Oct 2005, 11:55
Is there an OE?

Kudos [?]: 56 [0], given: 0

Senior Manager
Joined: 07 Jul 2005
Posts: 402

Kudos [?]: 61 [0], given: 0

### Show Tags

31 Oct 2005, 20:44
a) Out of scope
b) Out of scope
c) Out of scope
d) strengthens the argument

e) The correct option. Because the percentatage of the population that is 40 and below is decreasing, implies that the older generation is growing in percentage of the total population. Since the older generation tends to save more money (unfortunately, we have to assume the savings are channeled into funding for R&D), a change in tax code in unneccessary.

I choose E.

Kudos [?]: 61 [0], given: 0

Intern
Joined: 01 Nov 2005
Posts: 2

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

### Show Tags

01 Nov 2005, 09:23
Can anybody please direct me to a place where I can download the 1000 cr and the 100 rc files ?

Many thanks....

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

Intern
Joined: 10 Aug 2005
Posts: 25

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

### Show Tags

01 Nov 2005, 10:28
Both D and E seem to weaken the argument.

The argument is of the type, x->y and x necessary for y.
i.e., change tax structure -> encourage investment, savings etc
and must change the tax structure.

D weakens by saying x-> ~y i.e., discourages investment in research by creating strict limits on research allowance

E weakens by saying x not a necessary condition for y.

Of the two, D seems to be more strong as it directly opposes the logic while E allows for the possibility that x can cause y.

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

Manager
Joined: 03 Oct 2005
Posts: 87

Kudos [?]: 10 [0], given: 0

### Show Tags

01 Nov 2005, 10:33
E.

Basically what rigger said above. Including the parenthetical note about unfortunately assuming that savings will go towards research and not other things!!

Kudos [?]: 10 [0], given: 0

01 Nov 2005, 10:33
Display posts from previous: Sort by

# Economies in which a high percentage of resources are

Moderators: GMATNinjaTwo, GMATNinja

 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®.