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# Policy analyst: CAFTA the Central American Free Trade

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Senior Manager
Joined: 04 Sep 2008
Posts: 251
Location: Kolkata
Schools: La Martiniere for Boys

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04 Feb 2009, 20:26
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Question Stats:

100% (02:03) correct 0% (00:00) wrong based on 13 sessions

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Policy analyst: CAFTA—the Central American Free Trade Agreement—is a good thing. If we enact CAFTA, we essentially drop trade barriers between the US and a host of Central American companies; that means lower production costs for American companies, lower retail prices for American consumers, and more income from exports for the US. These are undeniably good things. But all good things in economic policy come at a price. The price of CAFTA’s benefits is the outsourcing of American jobs. For prices to drop and companies to make more money, overhead costs must be slashed. CAFTA lets companies send all their manufacturing jobs to Central America, where workers make a fraction of what American workers make and where factories are poorly regulated and thus cheap to operate. In the end, the savings of the average American at the store will not compensate for the loss of income from outsourcing.

The boldface portion of the analyst’s argument serve what function?

(A) The first offers the analyst’s conclusion; the second gives a consideration that counts against that conclusion.
(B) The first presents a reason in favor of the analyst’s conclusion; the second is that conclusion.
(C) The first gives a reason that counts against the analyst’s conclusion; the second gives a reason that the analyst thinks supports the first reason.
(D) The first is a factor that weighs against the analyst’s conclusion; the second presents an explanation of why this consideration should be disregarded.
(E) The first is the analyst’s conclusion; the second presents a consequence of that conclusion.
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rampuria

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Joined: 01 Jan 2009
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04 Feb 2009, 21:07
IMO D.

The conclusion of the analyst is the statement "End the end.. ". So, A and E are gone. 1st bold statement is opposite to the conclusion. so B is also gone. Now 1st and 2ns statement state 2 opposite things , so C is also gone. that leaves D.
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Joined: 23 May 2008
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04 Feb 2009, 21:21
clear D
SVP
Joined: 17 Jun 2008
Posts: 1547

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04 Feb 2009, 22:33
Clear D.
Manager
Joined: 17 Dec 2008
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04 Feb 2009, 23:12
Clear D. 2:45 though...yikes...
VP
Joined: 18 May 2008
Posts: 1260

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05 Feb 2009, 02:32
D.
For the first time, I cld ans a bold face problem with confidence. These BF problems really terrorise me . Can sum1 help?
Senior Manager
Joined: 26 May 2008
Posts: 428
Schools: Kellogg Class of 2012

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05 Feb 2009, 02:46
Agree with D

Cheers,
Unplugged
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Joined: 18 Jul 2008
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05 Feb 2009, 12:00
Not sure if it's that clear to me.

Between A) and E), I went with A.

IF the first bold is NOT the conclusion, then what is?

In the end, the savings of the average American at the store will not compensate for the loss of income from outsourcing.

I believe this is a premise.
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Joined: 02 Nov 2008
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05 Feb 2009, 17:39
Not sure if it's that clear to me.

Between A) and E), I went with A.

IF the first bold is NOT the conclusion, then what is?

In the end, the savings of the average American at the store will not compensate for the loss of income from outsourcing.

I believe this is a premise.

I was also debating between A & E, and chose A simply because it fit a little better.
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Joined: 05 Jul 2008
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05 Feb 2009, 17:58
1
KUDOS
I agree this Q was very confusing.The opening statement makes it appear as if it were the conclusion.

But D has a pretty strong case. If we arrange all the events in chronological/logical order, what is the last word on this whole thing?

Is CAFTA a good thing the last word (or) If we adopt CAFTA for its good reasons, there are dire consequences

Logically it seems to be the later. How can the Policy expert still conclude that CAFTA is a good thing despite the huge loss in income unless there is an evidence that favors less prices to lower incomes. There is not.

Hence I believe it is D.

A was the trap and I fell for it to start with.
Senior Manager
Joined: 23 May 2008
Posts: 415

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05 Feb 2009, 22:38
I am still confused b/w A and E.......
Though D make sense but i doubt thats it's the OA.

Can someone throw some more light on it.....
Senior Manager
Joined: 21 Apr 2008
Posts: 488
Schools: Kellogg, MIT, Michigan, Berkeley, Marshall, Mellon

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06 Feb 2009, 14:11
Hi mates,

IMO D

The conc. is that the savings of the average American at the store will not compensate for the loss of income from outsourcing. And Oursourcing comes from CAFTA. Therefore, saying that the CAFTA is good goes againts the conc. and the second part explains why outsourcing should be disregarded.

OA and Source?

Cheers

rampuria wrote:
Policy analyst: CAFTA—the Central American Free Trade Agreement—is a good thing. If we enact CAFTA, we essentially drop trade barriers between the US and a host of Central American companies; that means lower production costs for American companies, lower retail prices for American consumers, and more income from exports for the US. These are undeniably good things. But all good things in economic policy come at a price. The price of CAFTA’s benefits is the outsourcing of American jobs. For prices to drop and companies to make more money, overhead costs must be slashed. CAFTA lets companies send all their manufacturing jobs to Central America, where workers make a fraction of what American workers make and where factories are poorly regulated and thus cheap to operate. In the end, the savings of the average American at the store will not compensate for the loss of income from outsourcing.

The boldface portion of the analyst’s argument serve what function?

(A) The first offers the analyst’s conclusion; the second gives a consideration that counts against that conclusion.
(B) The first presents a reason in favor of the analyst’s conclusion; the second is that conclusion.
(C) The first gives a reason that counts against the analyst’s conclusion; the second gives a reason that the analyst thinks supports the first reason.
(D) The first is a factor that weighs against the analyst’s conclusion; the second presents an explanation of why this consideration should be disregarded.
(E) The first is the analyst’s conclusion; the second presents a consequence of that conclusion.

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Joined: 26 Oct 2008
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09 Feb 2009, 20:05
Where does this question come from? I can't find a correct answer.
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Joined: 21 Apr 2008
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Schools: Kellogg, MIT, Michigan, Berkeley, Marshall, Mellon

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11 Feb 2009, 12:47
And I think it's time for OA...
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07 Jan 2015, 10:47
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.
Re: Policy analyst: CAFTA the Central American Free Trade   [#permalink] 07 Jan 2015, 10:47
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