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# Economist: At the insistence of the International Monetary

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Director
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Economist: At the insistence of the International Monetary [#permalink]

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23 Nov 2012, 05:54
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85% (02:31) correct 15% (02:08) wrong based on 24 sessions

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Economist: At the insistence of the International Monetary Fund, India slashed import duties from an average of
90 percent in 1991 to 30 percent in 1997. Many feared that the result would be a devastating drop in Indian
manufacturing due to competition with imported goods, but the doomsayers were wrong. Manufacturing output
increased by 50 percent in that time. The increase was due to the decrease in duties, since, with the decrease,
imports of goods used in manufacturing were much higher than imports of consumer goods.

Which of the following, if true, would most strengthen the economist’s argument?

A. A significant portion of manufacturers in India continued to produce goods from the same raw materials as before
1997 but at much lower cost.
B. Manufacturing increased significantly worldwide after 1992.
C. Production of goods and services in India was significantly enhanced by an increase in telecommunication
infrastructure in the 1990s.
D. Economic growth did not increase everywhere in India in the 1990s and 2000s.
E. Much of the increase in manufacturing output was of goods for export.
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Re: At the insistence of the International Monetary Fund [#permalink]

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23 Nov 2012, 10:50
gmatbull wrote:
Economist: At the insistence of the International Monetary Fund, India slashed import duties from an average of
90 percent in 1991 to 30 percent in 1997. Many feared that the result would be a devastating drop in Indian
manufacturing due to competition with imported goods, but the doomsayers were wrong. Manufacturing output
increased by 50 percent in that time. The increase was due to the decrease in duties, since, with the decrease,
imports of goods used in manufacturing were much higher than imports of consumer goods.

Which of the following, if true, would most strengthen the economist’s argument?

A. A significant portion of manufacturers in India continued to produce goods from the same raw materials as before
1997 but at much lower cost.
B. Manufacturing increased significantly worldwide after 1992.
C. Production of goods and services in India was significantly enhanced by an increase in telecommunication
infrastructure in the 1990s.
D. Economic growth did not increase everywhere in India in the 1990s and 2000s.
E. Much of the increase in manufacturing output was of goods for export.

Clear A.
The increase was due to the decrease in duties, since, with the decrease,
imports of goods used in manufacturing were much higher than imports of consumer goods.

It clearly tells that the instruments with which things were manufactured were now imposed with lower duties. So manufacturers can produce the same goods at much lower cost.
As told by A.
I shall be surprised if I get this one wrong.
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Re: At the insistence of the International Monetary Fund [#permalink]

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24 Nov 2012, 11:57
IMO A.

The argument is pretty strong and answer choices do not fit.

Among all A looks best.
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Re: At the insistence of the International Monetary Fund [#permalink]

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24 Nov 2012, 12:12
A

and 300/500 level.........nothing more. !!
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Re: At the insistence of the International Monetary Fund [#permalink]

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24 Nov 2012, 14:18
Yeah,
[Reveal] Spoiler:
A, the OA
fits most;
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Re: At the insistence of the International Monetary Fund   [#permalink] 24 Nov 2012, 14:18
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