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For decades the region's budget has slowly receded into a fiscal slump

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Senior Manager
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Joined: 26 Dec 2015
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Concentration: Finance, Strategy
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For decades the region's budget has slowly receded into a fiscal slump [#permalink]

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A
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57% (01:16) correct 43% (01:30) wrong based on 149 sessions

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For decades the region's budget has slowly receded into a fiscal slump. The effects of the slump have been felt at every level of government because the government can no longer offer other jurisdictions the subsidies that it had been able to provide in the past. Therefore, to ease the fiscal burden the government must both look to trim expenditures, and stimulate new revenues.

The answer to which of the following questions would be most important in determining whether implementing the proposal would be likely to achieve the desired result?

A) Will the subsidies continue to be needed by local jurisdictions?

B) Will the subsidies by the government continue to be supported by the public?

C) Will the proposed measures stimulate the region's economy?

D) Are there enough non-essential items in the budget available to cut?

E) Is the region's economy headed for a future recession?
[Reveal] Spoiler: OA
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For decades the region's budget has slowly receded into a fiscal slump [#permalink]

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New post 13 Jan 2018, 11:39
If there is no scope for cutting down the expenses, trimming the expenses would not be possible. Hence, the proposal will not achieve its intended result.
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Last edited by TaN1213 on 17 Jan 2018, 01:44, edited 1 time in total.
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Re: For decades the region's budget has slowly receded into a fiscal slump [#permalink]

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New post 17 Jan 2018, 00:59
Can anyone explain why is option C wrong??

And why is option D correct?
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For decades the region's budget has slowly receded into a fiscal slump [#permalink]

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New post 28 Jan 2018, 09:48
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MSarmah wrote:
Can anyone explain why is option C wrong??

And why is option D correct?


Hi MSarmah. Although i am no expert, here is my reason to eliminate C and choose D.

For decades the region's budget has slowly receded into a fiscal slump. The effects of the slump have been felt at every level of government because the government can no longer offer other jurisdictions the subsidies that it had been able to provide in the past. Therefore, to ease the fiscal burden the government must both look to trim expenditures, and stimulate new revenues.

The answer to which of the following questions would be most important in determining whether implementing the proposal would be likely to achieve the desired result?

We need to prove that cutting expenditures and stimulating new revenues will ease fiscal burden.

C) Will the proposed measures stimulate the region's economy?
lf we say "yes" the proposed measures stimulate the region's economy. But what about the moderation or pacifying fiscal budget?
Trim expenditure + Stimulate new revenues ---> Stimulate economy----> ?????
Will the stimulation of economy will ease out fiscal burden.? may be.. May be not.

D) Are there enough non-essential items in the budget available to cut?
D on the other hand is the required assumption. The author ,when recommending that cut the expenditures, is assuming that there are enough non essential items to cut.

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For decades the region's budget has slowly receded into a fiscal slump   [#permalink] 28 Jan 2018, 09:48
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