It is currently 21 Nov 2017, 05:23

### 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

# Lawmaker: Raising taxes is not the only means of reducing

Author Message
TAGS:

### Hide Tags

Manager
Joined: 18 Oct 2008
Posts: 187

Kudos [?]: 29 [0], given: 11

Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

12 Jul 2010, 02:35
Should be D.

I dont see any use in assuming A.

Argument says says. govt can sell the helium and clear its debt..irrespective of whether govt needs it or not.

But what if the price fall when govt tries to sell, this clearly weakens the argument. And we need this assumption to defend the conclusion.

Kudos [?]: 29 [0], given: 11

Manager
Joined: 25 Aug 2008
Posts: 214

Kudos [?]: 83 [0], given: 5

Location: India
WE 1: 3.75 IT
WE 2: 1.0 IT
Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

12 Jul 2010, 02:44
What is OA??
_________________

Cheers,
Varun

If you like my post, give me KUDOS!!

Kudos [?]: 83 [0], given: 5

Manager
Joined: 24 May 2010
Posts: 65

Kudos [?]: 22 [0], given: 4

Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

12 Jul 2010, 05:56
i feel the answer is b.. This is the assumption if not taken will fail the conclusion of the total debt part. I may be wrong though

Kudos [?]: 22 [0], given: 4

Manager
Joined: 16 Jun 2010
Posts: 154

Kudos [?]: 48 [0], given: 1

Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

13 Jul 2010, 07:04
D . Well if govt is not using it then better it sells it off and invests the money or fill balloons with the gas.

Its not about the need here as said in A.

Plz tell OA, if it exists
_________________

R E S P E C T

Finally KISSedGMAT 700 times 450 to 700 An exprience

Kudos [?]: 48 [0], given: 1

Manager
Joined: 11 Feb 2008
Posts: 89

Kudos [?]: 52 [0], given: 2

Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

13 Jul 2010, 11:49
after negating B, argument falls apart . So, B
_________________

-------------------------------------------------------------------------------------------
Amar
http://amarnaik.wordpress.com

Kudos [?]: 52 [0], given: 2

Non-Human User
Joined: 01 Oct 2013
Posts: 10125

Kudos [?]: 270 [0], given: 0

Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

04 Nov 2015, 11:18
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.

Kudos [?]: 270 [0], given: 0

Manager
Joined: 14 Apr 2015
Posts: 79

Kudos [?]: 17 [0], given: 48

Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

24 Nov 2015, 18:41
aielman wrote:
I would go with option A.

Option D, though appealing has a fundamental mathematical pitfall.

Lets say the buy price of the Govt is 100\$ for 10 units therefore the total cost of accruing the helium is 1000\$, now the current market price is 125\$ for each unit.

Now 24% of 125\$ would be 30\$. If the market value of helium decreases even by 24%, the net selling price of one unit of helium would be 95\$. If the government sells 9 units of helium at this price and 1 unit at 125\$, the total amount it would gain is
95*9 + 125*1 = 980\$ (this is the worst case scenario).
Still running a debt of 20\$.

So i guess option A is the only one that holds, cos a proposition to sell the helium is made iff the govt has no current need for it.

The math is good. But, the argument depends on the fact that government ought to sell the He at market price only. So, the 1 unit 125 is not possible. It has to sell all units at 95 only. Anyways, A was close for me too. If govt. has no current need, it might sell He. If it has need, it won't sell He. But, A doesn't address the money thing, while D does.

Kudos [?]: 17 [0], given: 48

Intern
Joined: 22 Aug 2014
Posts: 48

Kudos [?]: 4 [0], given: 5

Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

09 Dec 2015, 11:30
Lawmaker: Raising taxes is not the only means of reducing government debt. The government’s stockpile of helium is worth 25 percent more, at current market prices, than the debt accumulated in acquiring and storing it. Therefore, by selling the helium, the government can not only pay off that debt but reduce its overall debt as well.

Which of the following is an assumption on which the argument depends?

A. The government has no current need for helium.
B. Twenty-five percent of the debt the government has accumulated in Stockpiling helium is not an insignificant portion of the government’s Total debt.
C. It is not in the lawmaker’s interest to advocate raising taxes as a Means of reducing government debt.
D. Attempts to sell the government’s helium will not depress the market Price of helium by more than 25 percent.
E. The government will not incur any costs in closing its facilities for stockpiling helium.

My answer is D without any doubt. Just understand that, say 100 dollar tor acquiring the stock and 25 dollar gain for market price favour. The last part 25dollar, which is a gain, can help reduce debt overall. Assumption answer anyhow tries to help to remove any inconsitency between conclusion and premises. Here, seems no such inconsitency, nor any any new things in the conclusion without the help or touch of premises. So, it might seem no way to help the conclusion to fill up a gap, since no gap available. Still, you have an opportunity to help. How? Think ..how can you give money to a guy who is too rich to get your help! still, you can help him, even without paying a dollar! This is through defending other possibilities of his expenses , for example, you can do something that will reduce his at least one way of expenses (it is like, saving a dollar from lost is like earning a new dollar).This is called defender rule!
This defender rule needs to be applied here, since no obvious gap is evident. Such rule has often a signature to recognize easily..which is..using 'not' in order to cancel out one possibility of attack.Answer D is a classic example.

Kudos [?]: 4 [0], given: 5

Intern
Joined: 30 Nov 2015
Posts: 1

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

Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

26 Apr 2016, 17:32
Why not Option E????

If the cost of closing down the storage facility of 25% Helium is more than its selling price, It ll not gain any money for Govt.

Hence Y not E..

Option D, even if price goes down from the normal rates, Govt will gain some money ( may be less). Other gain is in reducing storage cost. So it ll always be good for Govt (may not b best).

So I feel E is the answer..

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

Intern
Joined: 15 Mar 2016
Posts: 6

Kudos [?]: 1 [0], given: 19

Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

27 Apr 2016, 13:27
WhyabloodyMBA wrote:
aielman wrote:
I would go with option A.

Option D, though appealing has a fundamental mathematical pitfall.

Lets say the buy price of the Govt is 100\$ for 10 units therefore the total cost of accruing the helium is 1000\$, now the current market price is 125\$ for each unit.

Now 24% of 125\$ would be 30\$. If the market value of helium decreases even by 24%, the net selling price of one unit of helium would be 95\$. If the government sells 9 units of helium at this price and 1 unit at 125\$, the total amount it would gain is
95*9 + 125*1 = 980\$ (this is the worst case scenario).
Still running a debt of 20\$.

So i guess option A is the only one that holds, cos a proposition to sell the helium is made iff the govt has no current need for it.

The argument says that the govt can the stockpile, thus the argument itself signifies that der s a stockpile, which means its der for emergency n no current need is der. so option A is wrong.

IMO D.as d negation of dis statement wud make the lawmakes argument to fail.

E is wrong, i guess, coz ders nothing mentioned in the argument abt the facility costs.

Please correct if m wrong nywhr.

I think E is more wrong b/c the argument talks about "overall" debt. Thus any costs incurred could still have the possibilty of not effecting any overall change in debt

Kudos [?]: 1 [0], given: 19

Current Student
Joined: 03 May 2015
Posts: 262

Kudos [?]: 87 [0], given: 23

Location: South Africa
GPA: 3.49
WE: Web Development (Insurance)
Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

06 Jun 2016, 23:45
Lawmaker: Raising taxes is not the only means of reducing government debt. The government’s stockpile of helium is worth 25 percent more, at current market prices, than the debt accumulated in acquiring and storing it. Therefore, by selling the helium, the government can not only pay off that debt but reduce its overall debt as well.

Which of the following is an assumption on which the argument depends?

A. The government has no current need for helium.
B. Twenty-five percent of the debt the government has accumulated in Stockpiling helium is not an insignificant portion of the government’s Total debt.
C. It is not in the lawmaker’s interest to advocate raising taxes as a Means of reducing government debt.
D. Attempts to sell the government’s helium will not depress the market Price of helium by more than 25 percent.
E. The government will not incur any costs in closing its facilities for stockpiling helium.

Premise : Govt. has stockpile ( If it can recover national debt, you can well imagine how much)

Conclusion: By selling Helium, the govt can recover its debt.

Assumption: Flooding the market won't reduce the price to less than the govt. debt

A states that the govt. has no current need for helium. This is a very tempting assumption. But It says nothing about national debt. Also. Stockpile implies that excess stored for the future. SO the govt. has already taken care for its current need.
The currect answer would be something similar to " The government shall never need the helium to be sold"

Lets negate D.

If flooding the market will reduce by 25%, then the govt will still have to raise taxes. Leading to a failure of the argument.

_________________

Kudos if I helped

Kudos [?]: 87 [0], given: 23

Director
Status: I don't stop when I'm Tired,I stop when I'm done
Joined: 11 May 2014
Posts: 564

Kudos [?]: 2922 [0], given: 220

GPA: 2.81
Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

07 Jun 2016, 12:09
arirux92 wrote:
Lawmaker: Raising taxes is not the only means of reducing government debt. The government’s stockpile of helium is worth 25 percent more, at current market prices, than the debt accumulated in acquiring and storing it. Therefore, by selling the helium, the government can not only pay off that debt but reduce its overall debt as well.

Which of the following is an assumption on which the argument depends?

A. The government has no current need for helium.
B. Twenty-five percent of the debt the government has accumulated in Stockpiling helium is not an insignificant portion of the government’s Total debt.
C. It is not in the lawmaker’s interest to advocate raising taxes as a Means of reducing government debt.
D. Attempts to sell the government’s helium will not depress the market Price of helium by more than 25 percent.
E. The government will not incur any costs in closing its facilities for stockpiling helium.

Premise : Govt. has stockpile ( If it can recover national debt, you can well imagine how much)

Conclusion: By selling Helium, the govt can recover its debt.

Assumption: Flooding the market won't reduce the price to less than the govt. debt

A states that the govt. has no current need for helium. This is a very tempting assumption. But It says nothing about national debt. Also. Stockpile implies that excess stored for the future. SO the govt. has already taken care for its current need.
The currect answer would be something similar to " The government shall never need the helium to be sold"

Lets negate D.

If flooding the market will reduce by 25%, then the govt will still have to raise taxes. Leading to a failure of the argument.

To get the question Correct,I didn't able to make any specific assumption.I guessed,There is a hundred of assumptions to conclude the argument.
_________________

Md. Abdur Rakib

Please Press +1 Kudos,If it helps
Sentence Correction-Collection of Ron Purewal's "elliptical construction/analogies" for SC Challenges

Kudos [?]: 2922 [0], given: 220

Manager
Joined: 17 Aug 2015
Posts: 117

Kudos [?]: 19 [0], given: 647

GMAT 1: 650 Q49 V29
Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

05 Aug 2016, 16:22
d) let's say government paid 100 billion to store and purchasing the helium, market price 25% more, so if government sells it, 25 billion net profit

let's say overall debt 300 billion, so government can still reduce some debt by using the profit earned 300-25 billion
if market price falls more then 25%, government will get less than 75 billion by selling helium, so loss of 100-75= more than 25 billion
so more debt on government 300+25= 325

choice A wrong - even if government needs helium, we dont know how much need of it, it might be just the fraction of the storage

Kudos [?]: 19 [0], given: 647

Manager
Joined: 24 May 2014
Posts: 99

Kudos [?]: 9 [0], given: 357

Location: India
GMAT 1: 590 Q39 V32
GRE 1: 310 Q159 V151
GRE 2: 312 Q159 V153
GPA: 2.9
Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

18 Sep 2016, 01:23
The conclusion states that selling the helium at current prices will not only reduce the debt acquired by storing the helium but also reduce the overall debt.

Only in Option D, the assumption is clearly visible. If this option is negated, it damages the conclusion. As the prices of helium will fall, the money obtained won't be sufficient to cover the overall debt that was calculated with the assumption that prices of helium will remain 25% above current levels.

Kudos [?]: 9 [0], given: 357

Manager
Joined: 03 Jan 2016
Posts: 92

Kudos [?]: 20 [0], given: 14

WE: Operations (Manufacturing)
Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

23 Sep 2016, 11:50
Lawmaker: Raising taxes is not the only means of reducing government debt. The government’s stockpile of helium is worth 25 percent more, at current market prices, than the debt accumulated in acquiring and storing it. Therefore, by selling the helium, the government can not only pay off that debt but reduce its overall debt as well.

Which of the following is an assumption on which the argument depends?

A. The government has no current need for helium.
B. Twenty-five percent of the debt the government has accumulated in Stockpiling helium is not an insignificant portion of the government’s Total debt.
C. It is not in the lawmaker’s interest to advocate raising taxes as a Means of reducing government debt.
D. Attempts to sell the government’s helium will not depress the market Price of helium by more than 25 percent.
E. The government will not incur any costs in closing its facilities for stockpiling helium.

Govt will sell its helium to reduce the debt.
under what conditions this plan fails to accomplish its requirements:
1. There is no market available for helium
2. If excess of helium is sold, its price goes down.

reverse of these prethinking must be our assumption. Now only A and D are worth considering here:
Negating option A:
If govt needs helium, then it will not sell. But it is already mentioned that helium is in excess so we can leave this option.

Negating option D:
Attempt to sell will depress market price. This will falter our conclusion and hence is the correct answer.

Kudos [?]: 20 [0], given: 14

Intern
Joined: 10 Nov 2015
Posts: 17

Kudos [?]: 7 [0], given: 105

Location: India
Concentration: Strategy, Operations
GMAT 1: 710 Q49 V38
Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

24 Sep 2016, 01:37
I m confused between B and D, need expert opinion.

Kudos [?]: 7 [0], given: 105

Board of Directors
Status: Aiming MBA
Joined: 18 Jul 2015
Posts: 2766

Kudos [?]: 916 [5], given: 67

Location: India
GPA: 3.65
WE: Information Technology (Health Care)
Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

24 Sep 2016, 05:28
5
KUDOS
nishant12600 wrote:
I m confused between B and D, need expert opinion.

Notice, conclusion is that selling helium will reduce the overall debt of the government.

In B, we are given that 25% of the total debt the government has accumulated in Stockpiling helium is not an insignificant portion.

Negate it, 25% of the total debt the government has accumulated in Stockpiling helium is an insignificant portion. So, what is insignificant here?? Is it 1% or 30% or what? We don't know. May be its 30%. So, selling it may reduce that 30% amount. We are no where given the conclusion that the larger portion of the overall debt is reduced. So, whether its insignificant or significant, the debt is obviously going to reduce. hence, this statement doesn't shatter the conclusion. Hence, incorrect.

Now, option D : Attempts to sell the government’s helium will not depress the market Price of helium by more than 25 percent.

Negate it : Attempts to sell the government’s helium will depress the market Price of helium by more than 25 percent. Now, since we are saying that the market price will be reduced by more than 25%, so it casts doubt whether we will be able to pay the debt. We are given that it is currently at 25% higher than its actual price. So, if the price is reduced by 25%, we may actually get the lower amount of money that would lead to not able to pay the helium price as well. Hence, the conclusion is shattered.

lets say Helium bought at 100, Current price = 125, after selling reduced price = 93.75, which is less than the original price. I hope its clear now.
_________________

How I improved from V21 to V40! ?

Kudos [?]: 916 [5], given: 67

Verbal Expert
Joined: 14 Dec 2013
Posts: 3198

Kudos [?]: 3515 [2], given: 22

Location: Germany
Schools: HHL Leipzig
GMAT 1: 780 Q50 V47
WE: Corporate Finance (Pharmaceuticals and Biotech)
Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

24 Sep 2016, 11:36
2
KUDOS
Expert's post
nishant12600 wrote:
I m confused between B and D, need expert opinion.

In addition to the explanation by abhimahna above, please note that an assumption MUST BE TRUE. Whenever a specific number or percentage is observed in an option of an assumption question, there are chances that by changing the number or percentage the implication of the option does not change. Hence assumption of that particular number or percentage need not necessarily be required. Such options can then be easily eliminated. Here instead of 25% mentioned in option B take any other larger percentage - the implication does not change. So the assumption of that specific 25% is not required. Without further analysis this option can be dropped.

Kudos [?]: 3515 [2], given: 22

Intern
Joined: 23 Dec 2015
Posts: 24

Kudos [?]: 5 [0], given: 146

Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

26 Sep 2016, 00:39
IMO D
My explaination

Lets total debt of the Govt. be \$1000, of which \$100 of debt was taken for purchasing and stockpiling Helium.

Now the current market price of Helium is 25% more. i.e \$125.

So, if we sell the Helium @ \$125 , we not only pay the debt of procuring the Helium, but also reduce the overall debt to \$875 (\$1000 -\$ 125).

So, here we are assuming that Attempts to sell the government’s helium will not depress the market Price of helium by more than 25 percent..
Negate it, Attempts to sell the government’s helium will depress the market Price of helium by more than 25 percent..
i.e current market price \$125*(.75) = \$93.75. In this case, we did not even get the price at which have procured and stored the Helium.
Hence the conclusion breaks.

Thanks,
JP

Kudos [?]: 5 [0], given: 146

Manager
Joined: 21 Jan 2016
Posts: 85

Kudos [?]: 10 [0], given: 99

Location: India
GMAT 1: 670 Q50 V30
WE: Engineering (Computer Software)
Re: Lawmaker: Raising taxes is not the only means of reducing [#permalink]

### Show Tags

11 Jan 2017, 20:08
sayantanc2k wrote:
nishant12600 wrote:
I m confused between B and D, need expert opinion.

In addition to the explanation by abhimahna above, please note that an assumption MUST BE TRUE. Whenever a specific number or percentage is observed in an option of an assumption question, there are chances that by changing the number or percentage the implication of the option does not change. Hence assumption of that particular number or percentage need not necessarily be required. Such options can then be easily eliminated. Here instead of 25% mentioned in option B take any other larger percentage - the implication does not change. So the assumption of that specific 25% is not required. Without further analysis this option can be dropped.

sayantanc2k Didn't exactly get your point here. Could you explain via example ?

Kudos [?]: 10 [0], given: 99

Re: Lawmaker: Raising taxes is not the only means of reducing   [#permalink] 11 Jan 2017, 20:08

Go to page   Previous    1   2   3    Next  [ 44 posts ]

Display posts from previous: Sort by