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

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Many United States companies have, unfortunately, made the search for [#permalink]

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New post 29 Apr 2010, 04:17
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48% (00:37) correct 52% (00:27) wrong based on 113

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The Official Guide for GMAT Review 11th Edition, 2005

Practice Question
Question No.: RC 58 ~ 63
Page: 369

Many United States companies have, unfortunately, made the search for legal protection from import competition into a major line of work. Since 1980 the United States International Trade Commission (ITC) has received about 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.

Contrary to the general impression, this quest for import relief has hurt more companies than it has helped. As corporations begin to function globally, they develop an intricate web of marketing, production, and research relationships. The complexity of these relationships makes it unlikely that a system of import relief laws will meet the strategic needs of all the units under the same parent company.

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.

Perhaps the most brazen case occurred when the ITC investigated allegations that Canadian companies were injuring the United States salt industry by dumping rock salt, used to de-ice roads. The bizarre aspect of the complaint was that a foreign conglomerate with United States operations was crying for help against a United States company with foreign operations. The “United States” company claiming injury was a subsidiary of a Dutch conglomerate, while the “Canadian” companies included a subsidiary of a Chicago firm that was the second-largest domestic producer of rock salt.

[Reveal] Spoiler:
B

1. The passage is chiefly concerned with

(A) arguing against the increased internationalization of United States corporations
(B) warning that the application of laws affecting trade frequently has unintended consequences
(C) demonstrating that foreign-based firms receive more subsidies from their governments than United States firms receive from the United States government
(D) advocating the use of trade restrictions for “dumped” products but not for other imports
(E) recommending a uniform method for handling claims of unfair trade practices


[Reveal] Spoiler:
D

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.


[Reveal] Spoiler:
E

3. The last paragraph performs which of the following functions in the passage?

(A) It summarizes the discussion thus far and suggests additional areas of research.
(B) It presents a recommendation based on the evidence presented earlier.
(C) It discusses an exceptional case in which the results expected by the author of the passage were not obtained.
(D) It introduces an additional area of concern not mentioned earlier.
(E) It cites a specific case that illustrates a problem presented more generally in the previous paragraph.


[Reveal] Spoiler:
D

4. The passage warns of which of the following dangers?

(A) Companies in the United States may receive no protection from imports unless they actively seek protection from import competition.
(B) Companies that seek legal protection from import competition may incur legal costs that far exceed any possible gain.
(C) Companies that are United States-owned but operate internationally may not be eligible for protection from import competition under the laws of the countries in which their plants operate.
(D) Companies that are not United States-owned may seek legal protection from import competition under United States import relief laws.
(E) Companies in the United States that import raw materials may have to pay duties on those materials.


[Reveal] Spoiler:
D

5. The passage suggests that which of the following is most likely to be true of United States trade laws?

(A) They will eliminate the practice of “dumping” products in the United States.
(B) They will enable manufacturers in the United States to compete more profitably outside the United States.
(C) They will affect United States trade with Canada more negatively than trade with other nations.
(D) Those that help one unit within a parent company will not necessarily help other units in the company.
(E) Those that are applied to international companies will accomplish their intended result.


[Reveal] Spoiler:
B

6. It can be inferred from the passage that the author believes which of the following about the complaint mentioned in the last paragraph?

(A) The ITC acted unfairly toward the complainant in its investigation.
(B) The complaint violated the intent of import relief laws.
(C) The response of the ITC to the complaint provided suitable relief from unfair trade practices to the complainant.
(D) The ITC did not have access to appropriate information concerning the case.
(E) Each of the companies involved in the complaint acted in its own best interest.


[Reveal] Spoiler:
C

7. According to the passage, companies have the general impression that International Trade Commission import relief practices have

(A) caused unpredictable fluctuations in volumes of imports and exports
(B) achieved their desired effect only under unusual circumstances
(C) actually helped companies that have requested import relief
(D) been opposed by the business community
(E) had less impact on international companies than the business community expected


[Reveal] Spoiler:
A

8. According to the passage, the International Trade Commission is involved in which of the following?

(A) Investigating allegations of unfair import competition
(B) Granting subsidies to companies in the United States that have been injured by import competition
(C) Recommending legislation to ensure fair
(D) Identifying international corporations that wish to build plants in the United States
(E) Assisting corporations in the United States that wish to compete globally

[Reveal] Spoiler: Question #1 OA
[Reveal] Spoiler: Question #2 OA
[Reveal] Spoiler: Question #3 OA
[Reveal] Spoiler: Question #4 OA
[Reveal] Spoiler: Question #5 OA
[Reveal] Spoiler: Question #6 OA
[Reveal] Spoiler: Question #7 OA
[Reveal] Spoiler: Question #8 OA

Last edited by hazelnut on 10 Jul 2017, 19:08, edited 2 times in total.
Formatted the question & added the OA

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Re: Many United States companies have, unfortunately, made the search for [#permalink]

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New post 29 Apr 2010, 04:18
OA
[Reveal] Spoiler:
BDEDDBCA

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Re: Many United States companies have, unfortunately, made the search for [#permalink]

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New post 29 Apr 2010, 08:04
bdeddbea

needless to say i got one wrong. but hey. only God's perfect. sheesh
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New post 30 Apr 2010, 05:02
alright..couldsomeone explain more about 5th question

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Re: Many United States companies have, unfortunately, made the search for [#permalink]

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New post 05 May 2012, 03:21
sasen wrote:
alright..couldsomeone explain more about 5th question


Here's the relevant part that address the 5th question: "The complexity of these relationships makes it unlikely that a system of import relief laws will meet the strategic needs of all the units under the same parent company."

So the right answer is D.

B and C are out of scope.

A is not proven in the passage.
A: Trade laws "address", not "eliminate" dumping (this verbal is too strong and confirmative as trade laws might not succeed in eliminating dumping yet).

E is wrong: the passage says that application of trade laws might have unintended consequences, because international companies use trade laws against U.S. companies that have production bases abroad and given privileges by foreign governments.

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Re: Many United States companies have, unfortunately, made the search for [#permalink]

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New post 05 May 2012, 03:24
For question 1:

1. The passage is chiefly concerned with
(A) arguing against the increased internationalization of United States corporations
(B) warning that the application of laws affecting trade frequently has unintended consequences
(C) demonstrating that foreign-based firms receive more subsidies from their governments than United States firms receive from the United States government
(D) advocating the use of trade restrictions for “dumped” products but not for other imports
(E) recommending a uniform method for handling claims of unfair trade practices

B is the most correct one. But I still think that it is not quite right because it violates the "too narrow/ too broad scope" criteria.

The passage specifically deals with "import reliefs policies" while for choice B, it addresses "laws affecting trade", which is much more general than "import reliefs policies".

Can anybody explain?

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New post 19 Mar 2014, 21:49
What was your timing on this. I got all right, but took 11 mins.

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New post 26 Jul 2015, 18:54
Got all correct when i was completely depressed about my performance. Got some of my confidence back.. took 13 Min.. should reduce more.

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Re: Many United States companies have, unfortunately, made the search for [#permalink]

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New post 04 Sep 2015, 23:43
Can anyone xplain me question number 6 ?

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Many United States companies have, unfortunately, made the search for [#permalink]

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New post 10 Jul 2017, 20:03
GMATNinja, Could you help with Question 6?
Quote:
Perhaps the most brazen case occurred when the ITC investigated allegations that Canadian companies were injuring the United States salt industry by dumping rock salt, used to de-ice roads. The bizarre aspect of the complaint was that a foreign conglomerate with United States operations was crying for help against a United States company with foreign operations. The “United States” company claiming injury was a subsidiary of a Dutch conglomerate, while the “Canadian” companies included a subsidiary of a Chicago firm that was the second-largest domestic producer of rock salt.

It can be inferred from the passage that the author believes which of the following about the complaint mentioned in the last paragraph?

(A) The ITC acted unfairly toward the complainant in its investigation.
(B) The complaint violated the intent of import relief laws.
(C) The response of the ITC to the complaint provided suitable relief from unfair trade practices to the complainant.
(D) The ITC did not have access to appropriate information concerning the case.
(E) Each of the companies involved in the complaint acted in its own best interest.
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Re: Many United States companies have, unfortunately, made the search for [#permalink]

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New post 21 Jul 2017, 19:03
hazelnut wrote:
GMATNinja, Could you help with Question 6?
Quote:
Perhaps the most brazen case occurred when the ITC investigated allegations that Canadian companies were injuring the United States salt industry by dumping rock salt, used to de-ice roads. The bizarre aspect of the complaint was that a foreign conglomerate with United States operations was crying for help against a United States company with foreign operations. The “United States” company claiming injury was a subsidiary of a Dutch conglomerate, while the “Canadian” companies included a subsidiary of a Chicago firm that was the second-largest domestic producer of rock salt.

It can be inferred from the passage that the author believes which of the following about the complaint mentioned in the last paragraph?

(A) The ITC acted unfairly toward the complainant in its investigation.
(B) The complaint violated the intent of import relief laws.
(C) The response of the ITC to the complaint provided suitable relief from unfair trade practices to the complainant.
(D) The ITC did not have access to appropriate information concerning the case.
(E) Each of the companies involved in the complaint acted in its own best interest.

Quote:
Internationalization increases the danger that foreign companies will use import relief laws against the very companies the laws were designed to protect.

This portion suggests that author believes that the import relief laws were designed to protect American companies from foreign competition. In this particular example (the complaint mentioned in the last paragraph), a Dutch company used the laws to file a complaint against an American company. Instead of the laws being used to protect American companies, in this example the laws were used against an American company.

Now, let's take a look at the answer choices:

Quote:
(A) The ITC acted unfairly toward the complainant in its investigation.

All we know is that the ITC investigated these allegations. We do not know how the ITC responded to the complaints, so we do not know whether the ITC acted unfairly. (A) can be eliminated.

Quote:
(B) The complaint violated the intent of import relief laws.

The author believes that the import relief laws were designed to protect American companies, but in this example the laws were used against an American company. Thus, we can infer that the author would believe that the complaint violated the intent of the import laws. Choice (B) looks good.

Quote:
(C) The response of the ITC to the complaint provided suitable relief from unfair trade practices to the complainant.

Again, we do not know how the ITC responded to the complaint, so we cannot infer what the author might think about the response. Eliminate (C).

Quote:
(D) The ITC did not have access to appropriate information concerning the case.

We are not told anything about the ITC's access to appropriate information concerning the case, so we cannot infer that the author would believe this. Eliminate (D).

Quote:
(E) Each of the companies involved in the complaint acted in its own best interest.

The passage does not mention anything about the motivation of the companies, so we cannot infer what the author thinks about the motivations of the companies. We can only infer what the author thinks about the complaint itself. (E) can be eliminated.

(B) is the best choice.

I hope that helps!
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Re: Many United States companies have, unfortunately, made the search for [#permalink]

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New post 08 Aug 2017, 07:19
hazelnut

Could you chip in on Question 2
Question 2:
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?

(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.

Passage says:
Quote:
Even when no unfair practices are alleged, the simple claim that an industry has been injured by imports is sufficient grounds to seek relief.

I rejected D as there is no mention of "injured by sale of imports".
Thus ended up selecting B.
Why is B wrong? Why is D correct?

Thanks! :)

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Re: Many United States companies have, unfortunately, made the search for   [#permalink] 08 Aug 2017, 07:19
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