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# Large national budget deficits do not cause large trade deficits. If t

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Large national budget deficits do not cause large trade deficits. If t [#permalink]

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27 Oct 2009, 06:02
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Large national budget deficits do not cause large trade deficits. If they did, countries with the largest budget deficits would also have the largest trade deficits. In fact, when deficit figures are adjusted so that different countries are reliably comparable to each other, there is no such correlation.

If the statements above are all true, which of the following can properly be inferred on the basis of them?

(A) Countries with large national budget deficits tend to restrict foreign trade.
(B) Reliable comparisons of the deficit figures of one country with those of another are impossible.
(C) Reducing a country’s national budget deficit will not necessarily result in a lowering of any trade deficit that country may have.
(D) When countries are ordered from largest to smallest in terms of population, the smallest countries generally have the smallest budget and trade deficits.
(E) Countries with the largest trade deficits never have similarly large national budget deficits.
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Re: Large national budget deficits do not cause large trade deficits. If t [#permalink]

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27 Oct 2009, 10:49
2
Restate the premise "large national deficits may not necessarily result in large trade deficits. there is no correlation between national deficits and trade deficits"

A) Out of scope. The premise is about national deficits and trade deficits. it has nothing about trade restriction
B) False. The premise is about the correlation between national deficits and trade deficits. It has no information about comparison between deficits of different countries. In addition, the word impossible is too strong. There are no facts support such comparison is impossible.
C) Correct answer. The premise states that there is no correlation between national and trade deficits. Therefore, reducing one may or may not lead to the reduction of another.
D) The premise says nothing about population. Rule out
E) Exact opposite. The premise says there is no correlation between trade deficits and national deficits
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Re: Large national budget deficits do not cause large trade deficits. If t [#permalink]

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Updated on: 21 Oct 2013, 22:18
3
5
Official Guide for GMAT Verbal Review, 2nd Edition
Practice Question
Question No.: 12
Page: 120
Difficulty:

Large national budget deficits do not cause large trade deficits. If they did, countries with the largest budget deficits would also have the largest trade deficits. In fact, when deficit figures are adjusted so that different countries are reliably comparable to each other, there is no such correlation.

If the statements above are all true, which of the following can properly be inferred on the basis of them?
(A) Countries with large national budget deficits tend to restrict foreign trade.
(B) Reliable comparisons of the deficit figures of one country with those of another are impossible.
(C) Reducing a country’s national budget deficit will not necessarily result in a lowering of any trade deficit that country may have.
(D) When countries are ordered from largest to smallest in terms of population, the smallest countries generally have the smallest budget and trade deficits.
(E) Countries with the largest trade deficits never have similarly large national budget deficits.
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Last edited by dentobizz on 21 Oct 2013, 22:18, edited 1 time in total.
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Re: Large national budget deficits do not cause large trade deficits. If t [#permalink]

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23 Jul 2010, 05:49
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Premise : there is no such correlation between budget deficit and trade deficit

So we can infer that reducing budget deficit will NOT necessarily reduce the trade deficit.
C is correct.

(A) Countries with large national budget deficits tend to restrict foreign trade. >> Foreign trade is Out of scope
(B) Reliable comparisons of the deficit figures of one country with those of another are impossible. >> Impossible here is wrong. It cannot be inferred from this passage.
(C) Reducing a country’s national budget deficit will not necessarily result in a lowering of any trade deficit that country may have. Answer
(D) When countries are ordered from largest to smallest in terms of population, the smallest countries generally have the smallest budget and trade deficits. >> The size of the country has no bearing on the argument. Irrelevant
(E) Countries with the largest trade deficits never have similarly large national budget deficits. >> Never is wrong. This cannot be inferred.
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Re: Large national budget deficits do not cause large trade deficits. If t [#permalink]

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04 Sep 2010, 14:20
1
Premise: When deficit figures are adjusted so that the countries can be reliably compared , no correlation is found between budget deficit and trade deficit.

Conclusion:-Large Budget deficit does not mean large trade deficit.

(A) Countries with large national budget deficits tend to restrict foreign trade.
Not relevant to argument.
(B) Reliable comparisons of the deficit figures of one country with those of another are impossible.
Argument itself closes the loophole by including "when adjusted", therefore it is irrelevant whether comparison can be made or not. Further impossible introduces extreme inference.
(C) Reducing a country’s national budget deficit will not necessarily result in a lowering of any trade deficit that country may have.
Correct, since there is no correlation between BD & TD , it is safe to infer that reducing BD may not lead to lowering of TD.
(D) When countries are ordered from largest to smallest in terms of population, the smallest countries generally have the smallest budget and trade deficits.
New information , argument does not refer to population sizes.
(E) Countries with the largest trade deficits never have similarly large national budget deficits.
"Never" exaggerates the inference, no relationship between BD & TD doesn't mean BD &TD cannot occur together.

IMO C.
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Re: Large national budget deficits do not cause large trade deficits. If t [#permalink]

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17 Mar 2012, 08:49
3
I chose C for this question:

A. This answer may or may not be true - there is not enough information within the stimulus to say that this answer is true.

B. This answer choice directly counters a statement within the stimulus. The stimulus says "when deficit figures are adjusted so that different countries are reliably comparable to each other..."

C. This is a good inference. The reason is because it essentially restates that large national budget deficits and large trade deficits have no correlation.

D. We are not concerned with ordering countries from largest to smallest population - this answer choice is irrelevant. Also, the smallest countries may or may not have the smallest budget and trade deficits - there is nothing within the stimulus to suggest this answer.

E. Firstly, the word "never have" is very strong - I was a bit suspicious of this. Also, I knew that this wasn't true because there is actually no correlation between large national budget deficits and large trade deficits as stated in the last sentence. Therefore, this answer choice can't be correct.
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Re: Large national budget deficits do not cause large trade deficits. If t [#permalink]

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24 Aug 2012, 00:35
2
Large national budget deficits do not cause large trade deficits. If they did, countries with the largest budget deficits would also have the largest trade deficits. In fact, when deficit figures are adjusted so that different countries are reliably comparable to each other, there is no such correlation.
If the statements above are all true, which of the following can properly be inferred on the basis of them?
(A) Countries with large national budget deficits tend to restrict foreign trade.
(B) Reliable comparisons of the deficit figures of one country with those of another are impossible.
(C) Reducing a country’s national budget deficit will not necessarily result in a lowering of any trade deficit that country may have.
(D) When countries are ordered from largest to smallest in terms of population, the smallest countries generally have the smallest budget and trade deficits.
(E) Countries with the largest trade deficits never have similarly large national budget deficits.
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Re: Large national budget deficits do not cause large trade deficits. If t [#permalink]

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24 Aug 2012, 03:31
PUNEETSCHDV wrote:
Large national budget deficits do not cause large trade deficits. If they did, countries with the largest budget deficits would also have the largest trade deficits. In fact, when deficit figures are adjusted so that different countries are reliably comparable to each other, there is no such correlation.
If the statements above are all true, which of the following can properly be inferred on the basis of them?
(A) Countries with large national budget deficits tend to restrict foreign trade.
(B) Reliable comparisons of the deficit figures of one country with those of another are impossible.
(C) Reducing a country’s national budget deficit will not necessarily result in a lowering of any trade deficit that country may have.
(D) When countries are ordered from largest to smallest in terms of population, the smallest countries generally have the smallest budget and trade deficits.
(E) Countries with the largest trade deficits never have similarly large national budget deficits.

C is the answer for this question.
Explanation: Conclusion of the passage states that Trade Deficit is not related or dependent upon National deficit.

(A) Countries with large national budget deficits tend to restrict foreign trade. - Does not extend the conclusion
(B) Reliable comparisons of the deficit figures of one country with those of another are impossible. -Does not extend the conclusion
(C) Reducing a country’s national budget deficit will not necessarily result in a lowering of any trade deficit that country may have. - It is directly related to conclusion
(D) When countries are ordered from largest to smallest in terms of population, the smallest countries generally have the smallest budget and trade deficits. - Out of scope

(E) Countries with the largest trade deficits never have similarly large national budget deficits - Again it tries to form a relationship between large national budget deficits and largest trade deficits. Also usage of strong word "never" helps eleminating this option.
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Re: Large national budget deficits do not cause large trade deficits. If t [#permalink]

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06 Oct 2013, 13:32
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Re: Large national budget deficits do not cause large trade deficits. If t [#permalink]

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15 Jul 2014, 06:37
Hi All,

This question particularly is relatively very easy to solve! But there are a lot of inference questions which are based on a particular pattern recognition. Can anyone help me decipher this code?

Q . Large national budget deficits do not cause large trade deficits. If they did, countries with the largest budget deficits would also have the largest trade deficits. In fact, when deficit figures are adjusted so that different countries are reliably comparable to each other, there is no such correlation.

If the statements above are all true, which of the following can properly be inferred on the basis of them?

(A) Countries with large national budget deficits tend to restrict foreign trade.

(B) Reliable comparisons of the deficit figures of one country with those of another are impossible.

(C ) Reducing a country's national budget deficit will not necessarily result in a lowering of any trade deficit that country may have.

(D) When countries are ordered from largest to smallest in terms of population, the smallest countries generally have the smallest budget and trade deficits.

(E) Countries with the largest trade deficits never have similarly large national budget deficits.
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Re: Large national budget deficits do not cause large trade deficits. If t [#permalink]

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07 Aug 2014, 09:06
I feel it was between the options C and E.

I negated out option E, as the word 'never' made it a very strong negative correlation. In fact the last sentence states that there is no such correlation.

If the word, 'never' was not present, then option was lucrative as well.

But clearly option C is the correct answer.
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Re: Large national budget deficits do not cause large trade deficits. If t [#permalink]

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17 Nov 2014, 02:57
aiming4mba wrote:
Official Guide for GMAT Verbal Review, 2nd Edition
Practice Question
Question No.: 12
Page: 120
Difficulty:

Large national budget deficits do not cause large trade deficits. If they did, countries with the largest budget deficits would also have the largest trade deficits. In fact, when deficit figures are adjusted so that different countries are reliably comparable to each other, there is no such correlation.

If the statements above are all true, which of the following can properly be inferred on the basis of them?
(A) Countries with large national budget deficits tend to restrict foreign trade.
(B) Reliable comparisons of the deficit figures of one country with those of another are impossible.
(C) Reducing a country’s national budget deficit will not necessarily result in a lowering of any trade deficit that country may have.
(D) When countries are ordered from largest to smallest in terms of population, the smallest countries generally have the smallest budget and trade deficits.
(E) Countries with the largest trade deficits never have similarly large national budget deficits.

Can any expert please help explain the difference in meaning between 2nd line of the passage and answer choice (B)?
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Re: Large national budget deficits do not cause large trade deficits. If t [#permalink]

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17 Nov 2014, 16:39
1
mneeti wrote:
aiming4mba wrote:
Official Guide for GMAT Verbal Review, 2nd Edition
Practice Question
Question No.: 12
Page: 120
Difficulty:

Large national budget deficits do not cause large trade deficits. If they did, countries with the largest budget deficits would also have the largest trade deficits. In fact, when deficit figures are adjusted so that different countries are reliably comparable to each other, there is no such correlation.

If the statements above are all true, which of the following can properly be inferred on the basis of them?
(A) Countries with large national budget deficits tend to restrict foreign trade.
(B) Reliable comparisons of the deficit figures of one country with those of another are impossible.
(C) Reducing a country’s national budget deficit will not necessarily result in a lowering of any trade deficit that country may have.
(D) When countries are ordered from largest to smallest in terms of population, the smallest countries generally have the smallest budget and trade deficits.
(E) Countries with the largest trade deficits never have similarly large national budget deficits.

Can any expert please help explain the difference in meaning between 2nd line of the passage and answer choice (B)?

Hello mneeti.

The 2nd line of the stimulus says: when deficit figures are adjusted so that different countries are reliably comparable to each other, there is no such correlation.

It means when deficit figures are adjusted to a comparable levels --> there is NO correlation "countries with the largest budget deficits would also have the largest trade deficits".

Do not be confused the term "such correlation".

Option B, however, says the deficit figures of one country with those of another can't be compared. That's wrong. They are different, but can be adjusted to a comparable levels.

Hope it helps.
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15 Dec 2016, 22:43
joyseychow wrote:
Large national budget deficits do not cause large trade deficits. If they did, countries with the largest budget deficits would also have the largest trade deficits. In fact, when deficit figures are adjusted so that different countries are reliably comparable to each other, there is no such correlation.
If the statements above are all true, which of the following can properly be inferred on the basis of them?

Boil it down - There is no correlation between national budget deficit and trade deficit
Type - Inference
(A) Countries with large national budget deficits tend to restrict foreign trade. Out of scope
(B) Reliable comparisons of the deficit figures of one country with those of another are impossible. Incorrect
(C) Reducing a country’s national budget deficit will not necessarily result in a lowering of any trade deficit that country may have. Correct since there is no correlation
(D) When countries are ordered from largest to smallest in terms of population, the smallest countries generally have the smallest budget and trade deficits. Out of scope - we don't the relation of these 2 terms with population
(E) Countries with the largest trade deficits never have similarly large national budget deficits. - Large national budget deficits do not cause large trade deficits. But "never" is too strong a word in this statement . Hence , it can't be an inference

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27 Dec 2016, 03:49
We just know that there is no such correlation between budget and trade deficits.

(A) Countries with large national budget deficits tend to restrict foreign trade. OUT OF SCOPE
(B) Reliable comparisons of the deficit figures of one country with those of another are impossible. OUT OF SCOPE (Questioning the premise)
(C) Reducing a country’s national budget deficit will not necessarily result in a lowering of any trade deficit that country may have. CORRECT.
(D) When countries are ordered from largest to smallest in terms of population, the smallest countries generally have the smallest budget and trade deficits. OUT OF SCOPE
(E) Countries with the largest trade deficits never have similarly large national budget deficits. The language is too strong when compared to option C. Thus incorrect.
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01 Mar 2017, 06:03
Argument is "cause and effect" type, we're given that X doesn't necessarily cause Y.
C - is the right answer.
E - is a "reverse logic" trap.
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Re: Large national budget deficits do not cause large trade deficits. If t [#permalink]

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07 Jul 2017, 08:53
Merged topics. Please, search before posting questions!
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Re: Large national budget deficits do not cause large trade deficits. If t [#permalink]

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08 Jul 2017, 02:07
Imo C
The argument tells that there is no co relation between large national deficits and trade deficits .
So one does not impact the other a high national deficit does not mean that the country is going to have a large trade deficits .
Option proves this .
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Re: Large national budget deficits do not cause large trade deficits. If t [#permalink]

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15 Aug 2017, 23:36
C is correct - No correlation is found between large national budget deficits and large trade deficits. Statement 'C' proves it.
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Re: Large national budget deficits do not cause large trade deficits. If t [#permalink]

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18 Aug 2017, 03:08
sir can you please help me to understand the argument
Re: Large national budget deficits do not cause large trade deficits. If t   [#permalink] 18 Aug 2017, 03:08

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