The $464 million reserve in the budget adopted

Question

The $464 million “reserve” in the budget adopted by the legislature in June turns out to have been based mainly on wishful thinking. Because of tax cuts approved by voters on the June ballot, along with the continuing economic slump and other events affecting income and expenses, the actual reserve in prospect may be as low as $7 million.

The author is probably leading to which of the following conclusions?

A. These facts warrant an investigation into who squandered $457 million.

B. A reserve in the budget is not so necessary as we might wish it to be.

C. The legislature would be wise not to add any new spending to the budget adopted in June.

D. The economic slump will probably not last much longer, but while it does the legislature must adjust the budget accordingly.

E. Legislative budgets are typically careless and unheeding of variable factors which may affect their accuracy.

charanrana · Answer

Each of the other choices requires assumptions and conclusions not supported or implied by the argument. 
The argument’s stress on reduced funds leads logically to the conclusion that further spending is unwise.

adityaikhe10 · Answer

I narrowed my choice down to  option C or option E

option E  uses the word  "typically"  suggesting that the option encompasses a larger/ more  general statement! 
C seems like the answer which can be concluded without any other assumptions,

thus IMO C.

DishaAgarwal12 · Answer

why not D- it is not saying that the economic slump "will" not last longer, it is saying probably. Ad ultimately adjusting the budget is much needed

guddo · Answer

The $464 million “reserve” in the budget adopted by the legislature in June turns out to have been based mainly on wishful thinking. Because of tax cuts approved by voters on the June ballot, along with the continuing economic slump and other events affecting income and expenses, the actual reserve in prospect may be as low as $7 million. 
 
The author is probably leading to which of the following conclusions?

The passage says the expected budget reserve has nearly disappeared: instead of $464 million, it may be only $7 million.  So the likely conclusion  is that the legislature should be financially cautious and avoid adding new spending.

A. These facts warrant an investigation into who squandered $457 million.

Wrong. The passage does not say the money was stolen or wasted. It says the original reserve estimate was unrealistic.

B. A reserve in the budget is not so necessary as we might wish it to be.

Wrong. If anything, the passage suggests a reserve is important, not unnecessary.

C. The legislature would be wise not to add any new spending to the budget adopted in June.

Correct. If the reserve is much smaller than expected, then adding new spending would be risky. This is the most reasonable conclusion from the  budget shortfall  described.

D. The economic slump will probably not last much longer, but while it does the legislature must adjust the budget accordingly.

Wrong. The passage says the slump is continuing, but gives no basis for saying it will probably end soon.

E. Legislative budgets are typically careless and unheeding of variable factors which may affect their accuracy.

Wrong. Too broad. The passage criticizes this particular budget estimate, not legislative budgets generally.

Answer: (C)

The $464 million reserve in the budget adopted

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The $464 million reserve in the budget adopted

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