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In each of the past four years, the percent increase of the profits of

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In each of the past four years, the percent increase of the profits of  [#permalink]

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New post 30 Jan 2019, 05:49
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A
B
C
D
E

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  55% (hard)

Question Stats:

63% (02:24) correct 37% (02:29) wrong based on 118 sessions

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In each of the past four years, the percent increase of the profits of Japan’s five largest semiconductor firms has been less than that of the year before. This trend marks a severe departure from the industry’s peak in 1993, when revenues of each of these five firms grew at an average annual rate of 47 percent since the beginning of the decade. Clearly, the trade deficit law enacted by the Japanese government in 1993 has had an adverse effect on the industry, which accounts for a large portion of the Japanese gross domestic product.

The conclusion of the argument above cannot be true unless which of the following is true?

A. Japan’s gross domestic product has also shrunk since 1993.

B. The original goal of most trade-deficit laws is to protect domestic products from cheaper imports, yet not every one achieves this goal.

C. The five companies mentioned have encountered new pressure from smaller companies that hold patents on newer semiconductor technology.

D. Profits of semiconductor companies would have kept climbing steadily if the government had not passed its 1993 trade-deficit bill.

E. Many other sectors of Japanese commerce, such as its auto industry, have also suffered declining profits since 1993.

Kudos to best explanation, after OA answer is published

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Re: In each of the past four years, the percent increase of the profits of  [#permalink]

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New post 30 Jan 2019, 09:01
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In each of the past four years, the percent increase of the profits of Japan’s five largest semiconductor firms has been less than that of the year before. This trend marks a severe departure from the industry’s peak in 1993, when revenues of each of these five firms grew at an average annual rate of 47 percent since the beginning of the decade. Clearly, the trade deficit law enacted by the Japanese government in 1993 has had an adverse effect on the industry, which accounts for a large portion of the Japanese gross domestic product.

The conclusion of the argument above cannot be true unless which of the following is true?

A. Japan’s gross domestic product has also shrunk since 1993. (There might be other reason for shrinking japan's gdp not necessarily the trade deficit law )

B. The original goal of most trade-deficit laws is to protect domestic products from cheaper imports, yet not every one achieves this goal(The original goal mentioned in the statement doesn't make sense, because we don't know the government direction).

C. The five companies mentioned have encountered new pressure from smaller companies that hold patents on newer semiconductor technology(Out of context).

D. Profits of semiconductor companies would have kept climbing steadily if the government had not passed its 1993 trade-deficit bill. (Here is my thinking, we know that revenue was increasing from 1993, suddenly after trade deficit law everything goes wrong, so this is the reason)

E. Many other sectors of Japanese commerce, such as its auto industry, have also suffered declining profits since 1993 (Out of context).

Answer is D
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Re: In each of the past four years, the percent increase of the profits of  [#permalink]

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New post 30 Jan 2019, 07:25
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I think D is the correct answer. Since, according to the given statement it is because of the trade deficit law that the revenues started showing a declining trend. According to D in absence of the trade deficit law, the industry would have continued to show increasing profits year on year.
A states that Japan’s GDP has also shrunk, there is no evidence as such to support this claim. May be other industries had a better opportunity of increasing profits/revenues after introduction of the trade deficit law.
E hints towards similar trends in other industries but in the argument only semiconductor industry has been talked about.
B and C seem to be providing additional generalised kind of information.
So IMO its D

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Re: In each of the past four years, the percent increase of the profits of   [#permalink] 30 Jan 2019, 07:25
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