Arboria is floundering in the global marketplace, incurring

Question

Arboria is floundering in the global marketplace, incurring devastating losses in market position and profits. The problem is not Arboria's products, but Arboria's trade policy. Arboria faces the prospect of continuing economic loss until Arborian business and political leaders recognize the fundamental differences between Arborian and foreign economic systems. Today the key trade issue is not free trade versus protectionism but diminishing trade versus expanding trade.

Arboria is operating with an obsolete trade policy, an artifact of the mid-1940s when Arboria and Whorfland dominated the global economy, tariffs were the principal obstacle to trade, and Arborian supremacy was uncontested in virtually all industries. In the intervening decades, economic circumstances have shifted radically. Arborian trade policy has not.

Today, Arboria's trade policy seems paralyzed by the relentless conflict between proponents of “free” and “fair” trade. The free traders argue that Arborian markets should be open, and the movement of goods and services across national borders unrestrained. The fair traders assert that access to Arborian markets should be restricted until Arborian businesses are granted equal access to foreign markets. They contend that free trade is impossible while other nations erect barriers to Arborian exports. Both are correct: fair trade requires equal access and equal access leads to free trade. But both sides base their positions on the same two outdated premises:

1. Global commerce is conducted under the terms of the General Agreement on Tariffs and Trade (GATT) and dominated by Arboria and similar economic systems abroad.
2. Multilateral negotiations are the most effective way to resolve pressing trade issues.

Both assumptions are wrong. The 40-year-old GATT now covers less than 7 percent of global commerce. World trade is no longer dominated by the free-trade economies; nearly 75 percent is conducted by economic systems operating with principles at odds with those of Arboria. Forging a multilateral trade policy consensus among so many diverse economic systems has become virtually impossible. And while multilateral talks drag on, Arboria misses opportunities for trade expansion.   1 
 494. Which of the following best states the difference between free trade and fair trade, as explained in the passage?

A. Free trade requires no trade tariffs whatsoever, whereas fair trade assumes multilateral agreement on tariffs for goods of equal worth.
B. Free trade is based on the unrestricted movement of goods across all national boundaries, whereas fair trade is based on a nation's restriction of commerce with each nation that erects trade barriers to the first nation's exports.
C. The trade policies of countries like Arboria are based on the principles of free trade, whereas the trade policies of other types of world economies are based on fair trade.
D. Free-trade nations negotiate individual trade agreements with each of their trading partners, whereas fair-trade nations conduct multilateral trade negotiations.
E. Free trade assumes a constant level of global commerce, whereas fair trade promotes a steady expansion of international trade.

2 
 495. It can be inferred that the author of the passage would most likely agree with which of the following statements about multilateral trade negotiations?

A. They are the most effective way to resolve trade problems.
B. They are most effective in dealing with fair-trade issues between nations.
C. They have only recently begun to make an impact on world trade.
D. Arborian reliance on multilateral trade negotiations, while appropriate in the past, is inadequate for today's global marketplace.
E. The principles of multilateral trade negotiations are incompatible with current Arborian foreign trade policy.

3 
 496. Which of the following statements best summarizes the author's opinion of “free traders” and “fair traders”?

A. The free and the fair traders' continuing debate provides a healthy and effective forum for examining Arborian trade policy.
B. The proponents of fair trade are essentially correct, while those who advocate free trade are not.
C. The proponents of free trade are better able to deal with current economic problems than are the fair traders.
D. Neither the free nor the fair traders can come up with a workable trade policy because neither takes multilateral negotiations into account.
E. The proponents of both free and fair trade have based their positions on out-of-date premises that do not reflect current economic conditions.

4 
 497. The author mentions all of the following as characteristic of world trade in the mid-1940s EXCEPT:

A. Arboria played a major role in the global marketplace.
B. Whorfland played a major role in the global marketplace.
C. Tariffs were the main obstacle to trade.
D. Fair-trade economies dominated international trade.
E. Arborian manufacturers were unsurpassed in most industries.

5 
 498. In presenting the argument in the passage, the author uses all of the following EXCEPT:

A. statistical information about global commerce
B. definitions of terms concerning world trade
C. generalizations about Arboria's economic system
D. historical background of Arborian trade policy
E. an example of an economic system whose principles differ from those of Arboria

6 
 499. The author asserts which of the following about Arboria's trade policy?

A. A dramatic revision of Arboria's trade policy will be necessary unless Arborian manufacturers improve the quality of their goods.
B. The most crucial issue facing Arborian trade policymakers is that of free trade versus protectionism.
C. Arboria's current trade policy was essentially developed during the 1940s and has changed little since that time.
D. Arboria's trade policy is widely emulated throughout the world, to the extent that most international commerce is modeled on Arboria's principles.
E. Arboria's trade policy has evolved gradually over the last eighty years, constantly readjusting itself in response to shifts in global commerce.

7 
 500. The passage is primarily concerned with

A. illustrating the erosion of Arboria's position in the world marketplace
B. examining the differences between “free” and “fair” traders
C. advocating a reassessment of Arboria's trade policy
D. criticizing the terms of the General Agreement on Tariffs and Trade (GATT)
E. comparing the different economic circumstances of Arboria's trade partners

8 
 501. The author implies that the main obstacle to a truly effective Arborian trade policy is the

A. weak position that Arboria currently holds in the global marketplace
B. inability of Arborian leaders to recognize that foreign economic systems are based on principles fundamentally different from their own
C. dominance of the supporters of free trade in the conflict between free-trade and fair-trade advocates
D. apparent inability of Arborian industries to produce goods that are competitive in the world market
E. protectionism that characterizes the foreign trade policies of so many of Arboria's trade partners

ID: RC38200-01.01

GMATNinja · Accepted Answer

Before we look at (A) and (C), let's eliminate the others:

The author does examine the differences between free and fair trade proponents, but he/she concludes that BOTH are operating under false assumptions. Examining the  differences  between the two groups is not the primary purpose of the discussion -- instead, the author argues that both groups are operating under false assumptions, and that the conflict between them is paralyzing Arboria's trade policy and preventing Arboria from expanding its trade. Because the discussion of free vs. fair trade is included to SUPPORT this broader point, the differences between the two groups is not the primary purpose of the passage.

The author doesn't criticize the terms of the GATT. He/she just argues that the GATT covers a smaller portion of the world economy, and therefore Arboria should not assume that global commerce is conducted under the conditions of the GATT. (D) is out.

The author discusses Arboria's trade partners ONLY to examine Arboria's trade policies. His/her purpose is not to set up a comparison between the countries, but to look more closely at Arboria's trade policies. (E) is out.

Now let's take a look at the two remaining options:

Let's start with the first couple sentences of the passage:

"Arboria is  floundering  in the global marketplace,  incurring devastating losses  in market position and profits. The  problem  is not Arboria's products, but Arboria's trade policy. Arboria faces the prospect of  continuing economic loss until  Arborian business and political leaders recognize the fundamental differences between Arborian and foreign economic systems."

The author clearly views Arboria's current trade policy as a "problem" that is hurting Arboria (causing Arboria to flounder and incur devastating economic losses). And unless something changes (i.e. "unless Arborian business and political leaders recognize..."), Arboria will face the prospect of "continuing economic loss."

How did Arboria get into this mess?

"Arboria is operating with an  obsolete  trade policy"--a trade policy that has NOT shifted even though economic circumstances HAVE shifted radically.

In other words, Arboria's trade policy might have been fine in the mid-1940s, but the policy hasn't adapted as economic circumstances have changed radically. And why hasn't the policy adapted?

"Arboria's trade policy seems paralyzed by the relentless conflict between proponents of “free” and “fair” trade." - If the two sides are completely at odds, it will be really hard for them to agree on potential changes to the trade policy.

To recap, Arboria has an "obsolete" trade policy, one that has left Arboria floundering and incurring devastating losses. The economic loss will continue and Arboria will miss "opportunities for trade expansion" unless something changes. It is clear that the author views the current trade policy as a problem that 1) has and will continue to hurt Arboria economically and 2) is causing Arboria to miss opportunities for trade expansion.

The author does not  explicitly  call for a reassessment of the trade policy, but he/she certainly explains the consequences of NOT reassessing the trade policy (i.e. continued economic loss and missed trade opportunities). In explaining the dire consequences of NOT reassessing the trade policy, the author communicates an argument FOR reassessing the trade policy (just as I can make the case FOR brushing your teeth by describing all of the negative consequences of NOT brushing your teeth).

Is the author primarily concerned with letting us know that "Arboria is floundering in the global marketplace"? No. The fact that Arboria's position in the world marketplace is eroding simply supports the notion that the current trade policy is a problem that needs to be addressed.

So (C) is our best option.

globaldesi · Answer

1. Which of the following best states the difference between free trade and fair trade, as explained in the passage? 
 Thsi section specially refers to papa 3..
Today, Arboria's trade policy seems paralyzed by the relentless conflict between proponents of “free” and “fair” trade. The free traders argue that Arborian markets should be open, and the movement of goods and services across national borders unrestrained. The fair traders assert that access to Arborian markets should be restricted until Arborian businesses are granted equal access to foreign markets.
 
A. Free trade requires no trade tariffs whatsoever,  whereas fair trade assumes multilateral agreement on tariffs for goods of equal worth.   no where mentioned  
B. Free trade is based on the unrestricted movement of goods across all national boundaries, whereas fair trade is based on a nation's restriction of commerce with each nation that erects trade barriers to the first nation's exports.  Line 2 and 3 in third paragraph states this difference  
C. The trade policies of countries like Arboria are based on the principles of free trade, whereas the trade policies of other types of world economies are based on fair trade. No where mentioned in the passage 
D. Free-trade nations negotiate individual trade agreements with each of their trading partners, whereas fair-trade nations conduct multilateral trade negotiations. no nation comparison on these two policies is mentioned anywhere 
E. Free trade assumes a constant level of global commerce, whereas fair trade promotes a steady expansion of international trade. Not mentioned in the passage

2.  It can be inferred that the author of the passage would most likely agree with which of the following statements about multilateral trade negotiations? 
 both sides base their positions on the same two outdated premises: 
2. Multilateral negotiations are the most effective way to resolve pressing trade issues.
..Forging a multilateral trade policy consensus among so many diverse economic systems has become virtually impossible. 
 
A. They are the most effective way to resolve trade problems.
B. They are most effective in dealing with fair-trade issues between nations.
C. They have only recently begun to make an impact on world trade.
D.  Arborian reliance on multilateral trade negotiations, while appropriate in the past, is inadequate for today's global marketplace. 
E. The principles of multilateral trade negotiations are incompatible with current Arborian foreign trade policy.

3.  Which of the following statements best summarizes the author's opinion of “free traders” and “fair traders”? 
 World trade is no longer dominated by the free-trade economies; nearly 75 percent is conducted by economic systems operating with principles at odds with those of Arboria. Forging a multilateral trade policy consensus among so many diverse economic systems has become virtually impossible. And while multilateral talks drag on, Arboria misses opportunities for trade expansion.

A. The free and the fair traders' continuing debate provides a healthy and effective forum for examining Arborian trade policy.
B. The proponents of fair trade are essentially correct, while those who advocate free trade are not. non of these two policies are marked good. Both assumptions are wrong. 
C. The proponents of free trade are better able to deal with current economic problems than are the fair traders. no comparison mentioned 
D. Neither the free nor the fair traders can come up with a workable trade policy because neither takes multilateral negotiations into account. they worked in past 
E. The proponents of both free and fair trade have based their positions on out-of-date premises that do not reflect current economic conditions. Last 3 lines clearly state them

4.  The author mentions all of the following as characteristic of world trade in the mid-1940s EXCEPT:

A. Arboria played a major role in the global marketplace.  Arboria and Whorfland dominated the global economy, 
B. Whorfland played a major role in the global marketplace.  Arboria and Whorfland dominated the global economy, 
C. Tariffs were the main obstacle to trade. Arboria is operating with an obsolete trade policy, an artifact of the mid-1940s 
D. Fair-trade economies dominated international trade. no where mentioned 
E. Arborian manufacturers were unsurpassed in most industries. Arborian supremacy was uncontested in virtually all industries.

5.  In presenting the argument in the passage, the author uses all of the following EXCEPT:

A. statistical information about global commerce The 40-year-old GATT now covers less than 7 percent of global commerce. World trade is no longer dominated by the free-trade economies; nearly 75 percent is conducted by economic systems operating with principles at odds with those of Arboria. 
B. definitions of terms concerning world trade  The free traders argue.... The fair traders assert that access to Arborian markets should be restricted... 
C. generalizations about Arboria's economic system rboria faces the prospect of continuing economic loss until Arborian business and political leaders recognize the fundamental differences between Arborian and foreign economic systems 
D. historical background of Arborian trade policy free trade and fair trade policies 
E. an example of an economic system whose principles differ from those of Arboria No other country is mentioned in the passage

6.  The author asserts which of the following about Arboria's trade policy?

A. A dramatic revision of Arboria's trade policy will be necessary unless Arborian manufacturers improve the quality of their goods. The problem is not Arboria's products, but Arboria's trade policy 
B. The most crucial issue facing Arborian trade policymakers is that of free trade versus protectionism ts both free and fair trade not just comaprison between two .
C. Arboria's current trade policy was essentially developed during the 1940s and has changed little since that time. Thsi is clearly mentioned as it hasnt chanegd over time 
D. Arboria's trade policy is widely emulated throughout the world, to the extent that most international commerce is modeled on Arboria's principles. ut both sides base their positions on the same two outdated premises: Nations thus do not follow these principles 
E. Arboria's trade policy has evolved gradually over the last eighty years, constantly readjusting itself in response to shifts in global commerce. But both sides base their positions on the same two outdated premises: Thus no change

7.  The passage is primarily concerned with 
 Tha passage talkes about Arboria in general and about its outdated policies that haven't changed overtime .How market has moved and now Arboria should re-evaluate to change their policies as the old principles are no longer valid. C satisfies that 
A. illustrating the erosion of Arboria's position in the world marketplace
B. examining the differences between “free” and “fair” traders
C.  advocating a reassessment of Arboria's trade policy 
D. criticizing the terms of the General Agreement on Tariffs and Trade (GATT)
E. comparing the different economic circumstances of Arboria's trade partners

8.  The author implies that the main obstacle to a truly effective Arborian trade policy is the 
 Arboria faces the prospect of continuing economic loss until Arborian business and political leaders recognize the fundamental differences between Arborian and foreign economic systems. Today the key trade issue is not free trade versus protectionism but diminishing trade versus expanding trade.  
A. weak position that Arboria currently holds in the global marketplace
B. inability of Arborian leaders to recognize that foreign economic systems are based on principles fundamentally different from their own rewording of exactly wha is implied in para 1 last lines 
C. dominance of the supporters of free trade in the conflict between free-trade and fair-trade advocates
D. apparent inability of Arborian industries to produce goods that are competitive in the world market
E. protectionism that characterizes the foreign trade policies of so many of Arboria's trade partners

Diya52 · Answer

500.  The passage is primarily concerned with

A. illustrating the erosion of Arboria's position in the world marketplace
B. examining the differences between “free” and “fair” traders
C. advocating a reassessment of Arboria's trade policy
D. criticizing the terms of the General Agreement on Tariffs and Trade (GATT)
E. comparing the different economic circumstances of Arboria's trade partners

Can someone tell me why C is the correct answer? In the passage, the author talks about Arboria`s struggle in the global marketplace, then he talks about the problem, conflict between proponents of free and fair trade and how both of them are wrong. So where in the passage is the author advocating a reassessment? Isnt he just talking about the problems?

PearlRay · Answer

GMATNinja

Can you help with Q.7?

I chose option A instead of C. Because there is no sentence explicitly advocating a re-assessment of Arboria's trade policy. The entire passage just seems to explain why Arboria's trade policy is outdated- eg. the premises

admission2020 · Answer

GMATNinja 
How to decide between D and E?

GMATNinja · Answer

The author states at the beginning of the 3rd paragraph that Arboria's current trade policy seems "seems paralyzed by the relentless conflict between proponents of “free” and “fair” trade."

He/she goes on to say that both of these groups operate under the  incorrect  assumption that "multilateral negotiations are the most effective way to resolve pressing trade issues."

The reason why he/she believes that this assumption is wrong is that "forging a multilateral trade policy consensus among so many diverse economic systems has become virtually impossible."

Take a look at answer choice (E) for question #495:
 
From the analysis above, the author believes that those involved in Arboria's current policy   are   operating under the assumption that multilateral trade negotiations are the way to go. So, he/she would not agree that the principles of multilateral trade negotiations are  incompatible with  current   policy -- he/she just thinks that the assumption regarding multilateral trade negotiations should be questioned when developing a  new  trade policy. (E) is out.

Bingo! The author believes that both "free" and "fair" trade advocates are wrong in assuming that multilateral trade negotiations are appropriate in the current marketplace.

(D) is the correct answer to question #495.

I hope that helps!

maggiesomi · Answer

501.  The author implies that the main obstacle to a truly effective Arborian trade policy is the

A. weak position that Arboria currently holds in the global marketplace
B. inability of Arborian leaders to recognize that foreign economic systems are based on principles fundamentally different from their own
C. dominance of the supporters of free trade in the conflict between free-trade and fair-trade advocates
D. apparent inability of Arborian industries to produce goods that are competitive in the world market
E. protectionism that characterizes the foreign trade policies of so many of Arboria's trade partners

GMATNinja , Could you please help me with Q8? I was struggling between B and C, and I chose C because the first sentence in the third paragraph "Today, Arboria's trade policy seems paralyzed by the relentless conflict between proponents of “free” and “fair” trade. " I am always very bad at inference problems, Please help. Thank you.

GMATNinja · Answer

Question 8 
 
We’re looking for an answer choice that the author implies is the  main  obstacle to a truly effective Arborian trade policy. With that in mind, let’s consider (C):

As you noted, the author of the passage takes note of the apparent effect of the debate between “free” and “fair” trade supporters on Arboria’s trade policy. But nowhere does the author indicate that supporters of free trade are dominant in that conflict. Moreover, the author only states that the conflict SEEMS to paralyze Arboria. That’s different than saying the debate DOES paralyze the economy. For those two reasons, we can eliminate (C).

And here’s (B):

In the third sentence of the first paragraph, the author states that “Arboria faces the prospect of continuing economic loss until Arborian business and political leaders recognize the fundamental differences between Arborian and foreign economic systems.” In other words, Arborian trade policy is ineffective because it’s based on fundamentally different principles than those of foreign economies. That’s what (B) says, so (B) is correct.

I hope that helps!

quynhcel · Answer

Can someone help me with this? I usually find lost and cannot capture much information when encountering long passages, especially in passages that contain many difficult words like this. But the second time I read to review the passage, although I still don't understand all the words but I found it's much easier to capture the main idea. Can you suggest how to deal with hard passage? I work pretty well with short passages but not for the long ones.

GMATNinja · Answer

Great question! Long passages with difficult vocab can be intimidating, but they don't really demand a different approach than any other type of RC passage.

The best way to deal with these is to have a consistent approach which you can apply to any passage. As you finish each paragraph, pause to ask yourself the following questions:

1) What was the author's purpose? 
2) How does this paragraph connect to the previous paragraph?

Check out our  RC guide  or  this RC video  (and maybe its sequels) for more on this approach.

I hope that helps a bit!

hubertgo · Answer

Can someone help me to figure out the meaning of "first" in choice B of test of 494. I was stuck by this word and chose A instead.

sant13osh · Answer

question 6:
499. ???The author asserts which of the following about Arboria's trade policy?

A. A dramatic revision of Arboria's trade policy will be necessary unless Arborian manufacturers improve the quality of their goods.
B. The most crucial issue facing Arborian trade policymakers is that of free trade versus protectionism.
C. Arboria's current trade policy was essentially developed during the 1940s and has changed little since that time.
D. Arboria's trade policy is widely emulated throughout the world, to the extent that most international commerce is modeled on Arboria's principles.
E. Arboria's trade policy has evolved gradually over the last eighty years, constantly readjusting itself in response to shifts in global commerce.

OA is C. Passage states that Arobia's policy had not changed to new policies. How can a little changed is correct?

egmat · Answer

Hi Santosh,

What the passage says:  Arboria has not made any real changes to its trade policies, which have been in use since the 1940s.

What option C says:  Arboria's current trade policy was essentially developed during the 1940s and has changed little since that time.

What option C means:  Arboria's current trade policy came into existence in the 1940s and has not really changed from then.

Your confusion arises from a common misunderstanding of the meaning of option C. Let me explain with an example.

Sentence : A few players can be compared to Sachin Tendulkar.
 Meaning:  There are some players (a small but non-negligible number) who can be compared to Sachin.

Sentence:  Few players can be compared to Sachin Tendulkar.
 Meaning:  There are pretty much no players who can be compared to Sachin. The number of such players is so small that it is negligible. In other words, the intended meaning is that practically no player can be compared to Sachin.

Small words like "a" can tilt the intended meaning of the sentence by 180 degrees. We need to be extra careful.

Look at this example.

Sentence:  John's attitude towards life has changed a little since he served in the army

vs.

Sentence:  John's attitude towards life has changed little since he served in the army

The first sentence means: John's attitude has changed
The second sentence means: John's attitude has not changed.

In option C:
 Arboria's trade policy has not changed in all these years.

This is a very important learning!

Hope this helps!
Warm Regards
Harsha

GMATNinja · Answer

Question 1

Notice that answer choice (B) defines the meaning of fair trade. In the context of the sentence, the word “ first ” could be replaced with the word “ other ,” and it would have the same meaning.

Put another way: according to fair trade theory, when a nation erects trade barriers against some other nation, that other nation will respond by restricting commerce. The answer choice refers to this  other  nation (which restricts commerce) as the “first” nation, to differentiate it from the nation that erects trade barriers.

I hope that helps!

GMATNinja · Answer

Question 6 
 
Here are the key lines from the passage:

The second sentence is saying that Arborian trade policy has not  shifted radically . Notice this is different than saying it has not shifted  at all . So answer choice (C) is perfectly consistent with this statement. In other words, the idea that trade policy has not “shifted radically” supports the statement that it has “changed little.”

Question 7 
 
It's usually not helpful to imagine alternate answer choices, because your job is to assess whether each option answers the question exactly as written. In this case, changing "illustrating" to "explaining" wouldn't make a huge difference -- neither would capture the author's primary purpose for writing the passage.

See our  previous post  for an explanation of answer choice (A).

I hope that helps!

CrackverbalGMAT · Answer

Question 1

Which of the following best states the difference between free trade and fair trade, as explained in the passage?

A. Free trade requires no trade tariffs whatsoever, whereas fair trade assumes multilateral agreement on tariffs for goods of equal worth.  “…assumes multilateral agreement on tariffs for goods of equal worth” not mentioned anywhere.

B. Free trade is based on the unrestricted movement of goods across all national boundaries, whereas fair trade is based on a nation's restriction of commerce with each nation that erects trade barriers to the first nation's exports.   This difference is stated in the third paragraph

C. The trade policies of countries like Arboria are based on the principles of free trade, whereas the trade policies of other types of world economies are based on fair trade.  Not mentioned anywhere

D. Free-trade nations negotiate individual trade agreements with each of their trading partners, whereas fair-trade nations conduct multilateral trade negotiations.  Such a comparison has not mentioned anywhere

E. Free trade assumes a constant level of global commerce, whereas fair trade promotes a steady expansion of international trade.  Not mentioned anywhere

Question 2

It can be inferred that the author of the passage would most likely agree with which of the following statements about multilateral trade negotiations?

A. They are the most effective way to resolve trade problems.  The exact opposite of what can be inferred

B. They are most effective in dealing with fair-trade issues between nations.  Cannot infer this

C. They have only recently begun to make an impact on world trade.  Nothing in the passage to help us infer this

D. Arborian reliance on multilateral trade negotiations, while appropriate in the past, is inadequate for today's global marketplace.   We can infer this from this statement: “Forging a multilateral trade policy consensus among so many diverse economic systems has become virtually impossible” and the statement that leads to this statement.

E. The principles of multilateral trade negotiations are incompatible with current Arborian foreign trade policy.  We cannot infer anything about the principles of multilateral trade negotiations

Question 3

Which of the following statements best summarizes the author's opinion of “free traders” and “fair traders”?

A. The free and the fair traders' continuing debate provides a healthy and effective forum for examining Arborian trade policy.  This is not the author’s opinion

B. The proponents of fair trade are essentially correct, while those who advocate free trade are not.  The author feels that both the positions are wrong.

C. The proponents of free trade are better able to deal with current economic problems than are the fair traders.  No such comparison has been made.

D. Neither the free nor the fair traders can come up with a workable trade policy because neither takes multilateral negotiations into account.  The passage says that both sides say that multilateral negotiations are the most effective way to resolve pressing trade issues

E. The proponents of both free and fair trade have based their positions on out-of-date premises that do not reflect current economic conditions.   This line: But both sides base their positions on the same two outdated premises

Question 4

The author mentions all of the following as characteristic of world trade in the mid1940s EXCEPT:

A. Arboria played a major role in the global marketplace  “…Arboria and Whorfland dominated the global economy”

B. Whorfland played a major role in the global marketplace  “…Arboria and Whorfland dominated the global economy”

C. Tariffs were the main obstacle to trade.  “…tariffs were the principal obstacle to trade”

D. Fair-trade economies dominated international trade.   Not mentioned

E. Arborian manufacturers were unsurpassed in most industries.  “..Arborian supremacy was uncontested in virtually all industries”

Question 5

In presenting the argument in the passage, the author uses all of the following EXCEPT:

A. statistical information about global commerce  “The 40-year-old GATT now covers less than 7 percent of global commerce.”

B. definitions of terms concerning world trade  "The fair traders assert that access to Arborian markets should be restricted..."

C. generalizations about Arboria's economic system  "Arboria faces the prospect of continuing economic loss until Arborian business and political leaders recognize the fundamental differences between Arborian and foreign economic systems"

D. historical background of Arborian trade policy  Arboria is operating with an obsolete trade policy, an artifact of the mid-1940s when Arboria

E. an example of an economic system whose principles differ from those of Arboria   Not mentioned

Question 6

The author asserts which of the following about Arboria's trade policy?

A. A dramatic revision of Arboria's trade policy will be necessary unless Arborian manufacturers improve the quality of their goods.  No talk of improving the quality of goods

B. The most crucial issue facing Arborian trade policymakers is that of free trade versus protectionism.  The problem is free trade and fair trade

C. Arboria's current trade policy was essentially developed during the 1940s and has changed little since that time.   “Arboria is operating with an obsolete trade policy, an artifact of the mid1940s…economic circumstances have shifted radically. Arborian trade policy has not.”

D. Arboria's trade policy is widely emulated throughout the world, to the extent that most international commerce is modeled on Arboria's principles.  The author does not assert this

E. Arboria's trade policy has evolved gradually over the last eighty years, constantly readjusting itself in response to shifts in global commerce.  The author clearly states that Arborian trade policy has not shifted

Question 7

The passage is primarily concerned with

A. illustrating the erosion of Arboria's position in the world marketplace  This is a small portion of what has been mentioned

B. examining the differences between “free” and “fair” traders  This is a small portion of what has been mentioned

C. advocating a reassessment of Arboria's trade policy   The passage talks about Arboria, its outdated policies that haven't changed overtime and how Arboria should re-evaluate and change their policies as the old principles are no longer valid

D. criticizing the terms of the General Agreement on Tariffs and Trade (GATT)  This is a small portion of what has been mentioned

E. comparing the different economic circumstances of Arboria's trade partners  This has not been done

Question 8

The author implies that the main obstacle to a truly effective Arborian trade policy is the

A. weak position that Arboria currently holds in the global marketplace  That is not the obstacle

B. inability of Arborian leaders to recognize that foreign economic systems are based on principles fundamentally different from their own   “Today the key trade issue is not free trade versus protectionism but diminishing trade versus expanding trade.”

C. dominance of the supporters of free trade in the conflict between free-trade and fair-trade advocates  Not been mentioned

D. apparent inability of Arborian industries to produce goods that are competitive in the world market  Not been mentioned

E. protectionism that characterizes the foreign trade policies of so many of Arboria's trade partners  Not been mentioned

- Nitha Jay

waytowharton · Answer

GMATNinja   Sajjad1994   CrackverbalGMAT   KarishmaB   egmat   Magoosh 
Can you help me understand why Option B is incorrect in Que 6.

Que - The author asserts which of the following about Arboria's trade policy?

Option B - The most crucial issue facing Arborian trade policymakers is that of free trade versus protectionism.

Here protectionism refers to fair trade. The most crucial issue faced by them is that of free trade vs fair trade. Please me on this.

Sajjad1994 · Answer

Official Explanation

499. The author asserts which of the following about Arboria's trade policy?

Difficulty Level:   500

Explanation

Supporting Ideas

This question asks us to identify something stated in the passage—though not necessarily in the exact words given. We should look for the statement that is the most precise paraphrase of a statement made in the passage.

A.  Although the passage indicates that some revision of Arborian trade policy is needed, the passage does not indicate that such a revision would be unnecessary if the quality of Arborian manufactures improved.

B.  The passage states:  "Today the key trade issue is not free trade versus protectionism."

C.  Correct.   The passage states that the current trade policy is obsolete and  "an artifact of the mid-1940s,"  and adds that although economic circumstances have changed, Arborian trade policy has not.

D.  The passage states:  "nearly 75 percent   is conducted by economic systems operating with principles at odds with those of Arboria."

E.  The passage does not state that this is so; in fact, it emphasizes the lack of change over the previous 40 years in Arborian trade policy and the absence of readjustment in response to significant changes in conditions affecting global trade.

The correct answer is C.

GMATNinja · Answer

Question 6 
 
The author spends a good amount of time discussing free trade and fair trade, but he/she would  not  agree that this is a "crucial issue." Instead, the author thinks that the free trade vs. fair trade argument completely misses the  actual  issues with Arboria's economy. This is a pretty important piece of the author's argument, and you really want to wrap your head around this kind of thing before you dive into the weeds of the particular questions.

To pick up on the key components of the author's argument, consider why he/she write each paragraph, and how those paragraphs fits together. As an example, here's a breakdown of this passage:

Paragraph 1 : the author introduces a problem, rules out one aspect of that problem, and focuses on another aspect of the problem.

The problem: "Arboria's trade policy." 
 Something that's NOT an important piece of the problem: "free trade versus protectionism." 
 Something that IS an important piece of the problem: "diminishing trade versus expanding trade."

Paragraph 2:  The author states that Arboria's trade policy is obsolete.

Paragraph 3:  The author outlines the argument between free trade and fair trade, and lists 2 assumptions on which BOTH sides rely.

Paragraph 4:  The author explains that the assumptions from Paragraph 3 are incorrect, and thus demonstrates why the free vs. fair trade discussion isn't relevant.

From the above analysis, you can see that the author doesn't think that the free vs. fair trade argument is that important at all -- he/she thinks that both sides of that debate rely on incorrect assumptions. Instead of that debate, the author thinks that Arborian trade policy should focus on expansion.

Eliminate (B) for question 6.

I hope that helps!

Arboria is floundering in the global marketplace, incurring

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Arboria is floundering in the global marketplace, incurring

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