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Lawmaker: Raising taxes is not the only means of reducing
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18 Feb 2009, 19:17
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45
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A
B
C
D
E
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55% (hard)
Question Stats:
66% (01:46) correct 34% (01:53) wrong based on 2142 sessions
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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.
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24 Sep 2016, 04:28
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nishant12600 wrote:
I m confused between B and D, need expert opinion. sayantanc2k please help
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.
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19 Feb 2009, 03:14
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Selling the Helium is only way to reduce the debt burden because “current market price” supports it. What will happen if D comes true? “Current market price” will fall and government will no more capable of reducing overall debt.
IMO D
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Re: Lawmaker: Raising taxes is not the only means of reducing
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23 Feb 2010, 03:11
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BarneyStinson wrote:
A is simple and straight-forward. What is wrong with it? Why can't it be the correct answer?
Main conclusion of the argument says that helium can be sold to pay off the government debt (well some part of it).
Let's assume that government does in fact have some urgent need of helium. Does this fact change anything? You can still sell the helium and pay off the debt (as long as market price are high enough). The conclusion still holds.
The crucial assumption argument depends on concerns market prices. If prices decrease by more than 25%, there will be no more money left to pay off public debt.
Lawmaker: Raising taxes is not the only means of reducing
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09 Dec 2015, 10:30
reply2spg 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.
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.
Lawmaker: Raising taxes is not the only means of reducing
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06 Jun 2016, 22:45
reply2spg 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.
WE: Corporate Finance (Pharmaceuticals and Biotech)
Lawmaker: Raising taxes is not the only means of reducing
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24 Sep 2016, 10:36
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nishant12600 wrote:
I m confused between B and D, need expert opinion. sayantanc2k please help
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.
Lawmaker: Raising taxes is not the only means of reducing
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25 Sep 2016, 23:39
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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.
Re: Lawmaker: Raising taxes is not the only means of reducing
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13 Jun 2017, 07:29
gamerguy0074 wrote:
Can any one explain why is B wrong?
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.
Removing the Double Negative highlighted above, we get
B. Twenty-five percent 25% of the debt the government has accumulated in from Stockpiling helium is a significant portion of the government’s Total debt.
So what? Even if this is the correct assumption, how would selling off that stocked Helium is a better option than raising taxes or vice versa? This assumption does not affect our conclusion in any possible manner. As a matter of fact even if the 25% helium debt is a minuscule portion of govt's total debt, our conclusion is not affected.
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Re: Lawmaker: Raising taxes is not the only means of reducing
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08 Sep 2018, 13:14
reply2spg 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.
conclusion says "Therefore, by selling the helium, the government can not only pay off that debt but reduce its overall debt as well." So it quantity can be anything..passage is claiming that some amount will get reduced so B doesn't make sense. Because argument is just claiming that some(small or large %) debt will get reduced.
Which of the following is an assumption on which the argument depends?
So, what must be true for my conclusion to be valid?
Quote:
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.
Start with the conclusion: Govt can pay off its debt and also reduce it by selling helium (to market)
Logic: Current stock of helium is 25% more than the debt accumulated in acquiring and storing it So if we sell EXCESS helium, we can pay off past debt
Quote:
A. The government has no current need for helium.
Irrelevant to conclusion
Quote:
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.
Though I fell for this, I have different reasons to eliminate it than above. This talks about 25% of debt and arguments talks about 25% of stock of Helium. Can I reject on the grounds that both are talking about different subjects?
The usage of double negatives in (B) by few members seems to be nightmare.
Quote:
C. It is not in the lawmaker’s interest to advocate raising taxes as a Means of reducing government debt.
Who cares what is in lawyer's interest, out of scope.
Quote:
D. Attempts to sell the government’s helium will not depress the market Price of helium by more than 25 percent.
If I negate this, I arrive at Attempts to sell the government’s helium will depress the market Price of helium by more than 25 percent. Hmm.. so helium market prices are down than earlier. Then does it mean that people will reduce buying helium? Does not usually a reduction in price increase in demand of goods?
Quote:
E. The government will not incur any costs in closing its facilities for stockpiling helium.
costs for shutting down storage houses for helium are irrelevant to the argument.
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Re: Lawmaker: Raising taxes is not the only means of reducing
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11 Sep 2018, 02:01
reply2spg 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.
Premises: Raising taxes is not the only means of reducing government debt Government’s stockpile of helium is worth 25 percent more, at current market prices, than the debt accumulated in acquiring and storing it.
Conclusion: By selling the helium, the government can not only pay off that debt but reduce its overall debt as well.
Let's say when the Govt acquired and stored the helium, it incurred a debt of $100. Now the value of that helium is $125. So the conclusion says that if you sell the helium, you can pay off the $100 debt AND you can further pay off $25 of the Govt debt.
A. The government has no current need for helium.
We need to worry only about how selling off helium will impact the current debt level of the Govt. Whether selling off helium is ok from other angles is not relevant to our argument.
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.
The figure of 25% given here is just to confuse you. It has no relevance and no connection to the 25% increase in value of helium. The option could very well have been "the debt the government has accumulated in Stockpiling helium is not an insignificant portion of the government’s Total debt". It doesn't matter whether this debt is a small or big part of the overall debt. The conclusion only says that "this debt" can be taken care of and its overall debt can be reduced. That will be true irrespective of the relative size of this debt.
C. It is not in the lawmaker’s interest to advocate raising taxes as a Means of reducing government debt.
The lawmaker's interest is irrelevant.
D. Attempts to sell the government’s helium will not depress the market Price of helium by more than 25 percent.
The impact of selling helium on Govt's debt is based on the current price of helium. If the current price of helium depresses because of too much helium supply in the market, it may not sell at the current price. If the reduction in price is more than the "25% that it was extra", selling off helium may not be able to take care of "this debt". This is a valid assumption.
E. The government will not incur any costs in closing its facilities for stockpiling helium.
The costs incurred in closing facilities are irrelevant. We just need to worry about what we will get when we sell the helium.
Answer (D)
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Re: Lawmaker: Raising taxes is not the only means of reducing
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11 Sep 2018, 04:52
Debt accumulated in acquiring and storing helium = x At current market price, cost of helium =1.25x Conclusion - by selling helium, government can reduce it's debt. Now let us negate D. Price of helium reduces by 25% Hence, price of helium now = 1.25x - 0.75x = 0.9375x, which is of course lower than the sent accumulated on acquiring and storing helium, which is 'x'. Hence in this case government would suffer a loss hence as negated statement destroys the conclusion, the answer to this is 'D'
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66% (01:46) correct 
