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# Spending on research and development by United States

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Manager
Joined: 28 Jan 2005
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Spending on research and development by United States [#permalink]

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19 Mar 2005, 01:55
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Spending on research and development by United States businesses for 1984 showed an increase of about 8% over the 1983 level. This increase actually continued a downward trend evident since 1981 - when outlays for reserch and development increase 16.4% over 1980 spending. Clearly, the 25% tax credit enacted by Congress in 1981, which was intended to promote spending on research and development, did little or nothing to stimulate such spending.

The conclusion of the argument above cannot be true unless which of the following is true?

A: Business spending on research and development is usually directly proportional to business profits.
B: Business spending for research and development in 1985 could not increase by more than 8.3%.
C: Had the 1981 tax credit been set higher than 25%, business spending for research and development after 1981 would have increased more than it did.
D: In the absence of the 25% tax credit, business spending for research and development after 1981 would not have been substantially lower than it was.
E: Tax credits marked for specific investments are rarely effective in inducing businesses to make those investments.
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VP
Joined: 26 Apr 2004
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19 Mar 2005, 02:10
Taku wrote:
Spending on research and development by United States businesses for 1984 showed an increase of about 8% over the 1983 level. This increase actually continued a downward trend evident since 1981 - when outlays for reserch and development increase 16.4% over 1980 spending. Clearly, the 25% tax credit enacted by Congress in 1981, which was intended to promote spending on research and development, did little or nothing to stimulate such spending.

The conclusion of the argument above cannot be true unless which of the following is true?

A: Business spending on research and development is usually directly proportional to business profits.
B: Business spending for research and development in 1985 could not increase by more than 8.3%.
C: Had the 1981 tax credit been set higher than 25%, business spending for research and development after 1981 would have increased more than it did.
D: In the absence of the 25% tax credit, business spending for research and development after 1981 would not have been substantially lower than it was.
E: Tax credits marked for specific investments are rarely effective in inducing businesses to make those investments.

1980-1981 16.4%
1983-1984 8%
------------------------
downward trend
------------------------
conclusion: 25% tax credit did little or nothing.
--------------------------------------
the argument said 25% tax credit did little or nothing.
To support the conclusion, we can assume that if no 25%, the downard trend might exist or not exist. That is, try to mitigate the necessary of 25% tax credit.

That's like the rule of thumb. If A, then B, if not A, then not B. Support!

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Director
Joined: 19 Nov 2004
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Location: SF Bay Area, USA

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19 Mar 2005, 13:26
D)
Think about it, you will figure it out.

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20 Mar 2005, 14:57
D: In the absence of the 25% tax credit, business spending for research and development after 1981 would not have been substantially lower than it was.

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Manager
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21 Mar 2005, 01:21
As everyone went with, yes OA is (D). Mine was (E)....

Hello chunjuwa,
you are stating "if A, then B, if not A, then not B". In this case, would (D) mean " if there is no tax credit, business spending for R&D after 1981 would be nearly the same as it was". Am I correct?

chunjuwu wrote:
Taku wrote:
Spending on research and development by United States businesses for 1984 showed an increase of about 8% over the 1983 level. This increase actually continued a downward trend evident since 1981 - when outlays for reserch and development increase 16.4% over 1980 spending. Clearly, the 25% tax credit enacted by Congress in 1981, which was intended to promote spending on research and development, did little or nothing to stimulate such spending.

The conclusion of the argument above cannot be true unless which of the following is true?

A: Business spending on research and development is usually directly proportional to business profits.
B: Business spending for research and development in 1985 could not increase by more than 8.3%.
C: Had the 1981 tax credit been set higher than 25%, business spending for research and development after 1981 would have increased more than it did.
D: In the absence of the 25% tax credit, business spending for research and development after 1981 would not have been substantially lower than it was.
E: Tax credits marked for specific investments are rarely effective in inducing businesses to make those investments.

1980-1981 16.4%
1983-1984 8%
------------------------
downward trend
------------------------
conclusion: 25% tax credit did little or nothing.
--------------------------------------
the argument said 25% tax credit did little or nothing.
To support the conclusion, we can assume that if no 25%, the downard trend might exist or not exist. That is, try to mitigate the necessary of 25% tax credit.

That's like the rule of thumb. If A, then B, if not A, then not B. Support!

_________________

Best regards,

Kudos [?]: 164 [0], given: 0

Re: CR - R&D   [#permalink] 21 Mar 2005, 01:21
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# Spending on research and development by United States

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