Many United States companies have, unfortunately, made the search for

Please Explain Question 2

Hello Reckless123

Welcome to GMAT Club!

Please refer the folowing link for explanation to question #2.

https://gmatclub.com/forum/many-united- ... l#p1943909

Cheers

2. It can be inferred from the passage that the minimal basis for a complaint to the International Trade Commission is which of the following?

(A) A foreign competitor has received a subsidy from a foreign government.
(B) A foreign competitor has substantially increased the volume of products shipped to the United States.
(C) A foreign competitor is selling products in the United States at less than fair market value.
(D) The company requesting import relief has been injured by the sale of imports in the United States.
(E) The company requesting import relief has been barred from exporting products to the country of its foreign competitor.

Check out this excerpt from the passage:

280 complaints alleging damage from imports that benefit from subsidies by foreign governments. Another 340 charge that foreign companies “dumped” their products in the United States at “less than fair value.” Even when no unfair practices are alleged, the simple claim that an industry has been injured by imports is sufficient grounds to seek relief.

The first four options are mentioned in the passage. Option (E) is not. There is no discussion about any company being barred from exporting.

Answer (E)

1. The passage is chiefly concerned with (B) warning that the application of laws affecting trade frequently has unintended consequences.
The passage discusses how the search for legal protection from import competition has hurt more companies than it has helped. It highlights the complexities and unintended consequences of import relief laws and how they may not meet the strategic needs of all units within the same parent company.
2. It can be inferred from the passage that the minimal basis for a complaint to the International Trade Commission is (D) The company requesting import relief has been injured by the sale of imports in the United States.
The passage mentions that even the simple claim of an industry being injured by imports is sufficient grounds to seek import relief. This implies that a company requesting import relief must demonstrate that it has been injured by the sale of imports in the United States.
3. The last paragraph performs which of the following functions in the passage? (E) It cites a specific case that illustrates a problem presented more generally in the previous paragraph.
The last paragraph presents a specific case of a complaint to the ITC, where a foreign conglomerate with United States operations sought import relief against a United States company with foreign operations. This case illustrates the problem discussed in the previous paragraph regarding the potential misuse of import relief laws by foreign companies against United States companies.
4. The passage warns of which of the following dangers? (D) Companies that are not United States-owned may seek legal protection from import competition under United States import relief laws.
The passage discusses the danger of foreign companies using import relief laws against United States-owned companies. It highlights a case where a "United States" company, which was a subsidiary of a Dutch conglomerate, sought import relief against "Canadian" companies, including a subsidiary of a Chicago firm. This demonstrates the danger that companies not owned by the United States may seek legal protection under United States import relief laws.
5. The passage suggests that which of the following is most likely to be true of United States trade laws? (D) Those that help one unit within a parent company will not necessarily help other units in the company.
The passage emphasizes the complexity of global relationships within corporations and states that a system of import relief laws is unlikely to meet the strategic needs of all units under the same parent company. This suggests that trade laws that help one unit within a parent company may not necessarily help other units in the company.
6. It can be inferred from the passage that the author believes which of the following about the complaint mentioned in the last paragraph? (B) The complaint violated the intent of import relief laws.
The passage describes the case of the complaint where a foreign conglomerate with United States operations sought import relief against a United States company with foreign operations. The use of import relief laws by the foreign conglomerate against the United States company violates the intent of import relief laws, which are designed to protect domestic industries.
7. According to the passage, companies have the general impression that International Trade Commission import relief practices have (C) actually helped companies that have requested import relief.
The passage states that contrary to the general impression, the quest for import relief has hurt more companies than it has helped. This implies that companies have the general impression that import relief practices by the International Trade Commission have actually helped companies that have requested import relief.
8. According to the passage, the International Trade Commission is involved in which of the following? (A) Investigating allegations of unfair import competition.
The passage mentions the role of the United States International Trade Commission (ITC) in receiving complaints and investigating allegations of damage from imports that benefit from subsidies, products being dumped at less than fair value, and overall injury from imports. Therefore, the ITC is involved in investigating allegations of unfair import competition.

GMATNinja, Could you help with Question 4?



Both C and D seem to be threats, How can we eliminate C?

GMATNinja @bunnel can you tell the difficulty level of each question

Here is a rough idea.

Question #1: 500
Question #2: 650
Question #3: 500
Question #4: 650
Question #5: 600
Question #6: 650
Question #7: 650-700
Question #8: 600

Overall: 600

Hey KarishmaB

I couldn't comprehend this paragraph properly. Can you dumb it down for me?

"Internationalization increases the danger that foreign companies will use import relief laws against the very companies the laws were designed to protect. Suppose a United States-owned company establishes an overseas plant to manufacture a product while its competitor makes the same product in the United States. If the competitor can prove injury from the imports—and that the United States company received a subsidy from a foreign government to build its plant abroad—the United States company’s products will be uncompetitive in the United States, since they would be subject to duties."

Take an example:

US made import relief laws (say a huge tax on imports) to ensure that its own companies (US companies) benefit.

Nike is a US company but say it manufactures its shoes in another country C and brings them to US to sell.
Adidas is a German company but say it manufactures its shoes in US itself for US customers.

Nike shoes are imported into US from C so Adidas could claim that this import is harming it and that Nike received subsidies from the country C govt to manufacture in C, then Nike's products could attract the heavy tax.
Finally, Nike, the US company, suffered because Adidas (a foreign company) took advantage of US's import relief laws.

GMATNinja can you please explain question 3?

Got down to options C and E but went with E since the author does mention a bizzare and exceptional case, whereas in the previous paragraph he mentions the reverse.

Question 3

To understand the purpose of the last paragraph, first think through the structure of the passage as a whole:

• Paragraph 1: The author introduces an "unfortunate" situation. He/she doesn't like that companies frequently seek legal protection from import competition.
  
• Paragraph 2: The author gives a reason of why it is "unfortunate": international companies are so complex that import protection hurts more companies than it helps.
  
• Paragraph 3: The author further explains why import protection is "unfortunate": foreign companies can use the laws against US companies.
  
• Paragraph 4: The author give an example of the issue discussed in paragraph 3: A Dutch company operating in the US used the laws against a US company operating in Canada.

From this, we can see that the author is unhappy about the use of import protection laws. The second and third paragraphs explain issues with these laws, and the last paragraph gives us an example of the why the laws are not great.

Take another look at (C):


Remember, the author thinks these laws stink. He/she expects them to harm more than they help. The example in the last paragraph goes along with that expectation: a US company ends up getting hurt.

Yes, the author does say that it is a "bizarre" case -- but it's bizarre because the laws are absurd, exactly as the author argued earlier in the passage. Because the example in paragraph 4 goes along with the author's argument, it's incorrect to say that it's "case in which the results expected by the author of the passage were not obtained."

(C) is out for question 3.

Here's (E):


This is what we're looking for! The fourth paragraph provides an example of the issues discussed in the third paragraph.

(E) is the correct answer to question 3.

I hope that helps!

Question 4

Both might "seem to be threats," but we're looking for the one that is explicitly called out in the passage.

The import protection laws are supposed to help US companies, but in the third paragraph the author warns us that "foreign companies will use import relief laws against the very companies the laws were designed to protect."

This is exactly what (D) says:


(D) is specifically mentioned in the passage, so (D) is the correct answer.

(C), on the other hand, is not discussed in the passage. We have no idea about the import protection laws in other countries, and how those laws may affect US companies that operate internationally.

(C) is out, and (D) is the answer to question 4.

I hope that helps!