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26 Aug 2026, 23:32
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Difficulty:
95%
(hard)
Question Stats:
36% (02:02) correct
64%
(02:18)
wrong
based on 70
sessions
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Not Attempted Yet
Finance minister: The World Bank's "Doing Business" report ranks countries in terms of ease of doing business in them. In producing the rankings, the World Bank assesses how difficult it is for a hypothetical business to comply with regulations and pay taxes. Since the last "Doing Business" report came out, our government has dramatically simplified tax filing for small and even midsized businesses. So our "Doing Business" ranking will probably improve.
The answer to which one of the following questions would most help in evaluating the finance minister's argument?
(A) If the finance minister's country made it easier for small businesses to comply with regulations, would the rate at which new businesses are formed increase?
(B) Has compliance with tax laws by small and midsized businesses increased since tax filing was simplified?
(C) For small and midsized businesses in the finance minister's country, is tax preparation and filing more difficult than complying with other regulations?
(D) Is what the finance minister considers to be a midsized business smaller than the hypothetical business used to produce the "Doing Business" report?
(E) Was the finance minister in office when the last "Doing Business" report was issued?
The answer to which one of the following questions would most help in evaluating the finance minister's argument?
(A) If the finance minister's country made it easier for small businesses to comply with regulations, would the rate at which new businesses are formed increase?
(B) Has compliance with tax laws by small and midsized businesses increased since tax filing was simplified?
(C) For small and midsized businesses in the finance minister's country, is tax preparation and filing more difficult than complying with other regulations?
(D) Is what the finance minister considers to be a midsized business smaller than the hypothetical business used to produce the "Doing Business" report?
(E) Was the finance minister in office when the last "Doing Business" report was issued?
27 Aug 2026, 00:23
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The Finance Minister argues:
The World Bank's Doing Business ranking measures how difficult it is for a hypothetical business to comply with regulations and pay taxes.
The government has made tax filing easier for small and midsized businesses.
Therefore, the country's Doing Business ranking will probably improve.
The key assumption is that the businesses whose tax filing was simplified are actually relevant to the hypothetical business used by the World Bank.
Why (D) is correct
(D) Is what the finance minister considers to be a midsized business smaller than the hypothetical business used to produce the "Doing Business" report?
This directly tests whether the tax simplification applies to the hypothetical business used in calculating the ranking.
Suppose:
The government's "midsized business" = 50 employees
The World Bank's hypothetical business = 500 employees
Then simplifying taxes for businesses with 50 employees might have no effect at all on the hypothetical business's tax burden.
So the ranking might not improve.
But if the hypothetical business falls within the government's definition of small/midsized, then the simplification could affect the ranking, strengthening the Finance Minister's argument.
That's exactly what an Evaluate the Argument question wants: information that could make the argument either stronger or weaker.
Why the others are wrong
(A) Whether easier regulations lead to more new businesses is irrelevant.
The argument is about how the World Bank calculates the ranking, not whether more businesses are created.
(B) Whether businesses are actually complying with tax laws more is irrelevant.
The report measures difficulty of compliance, not the actual compliance rate.
(C) This tells us whether tax preparation is more difficult than other regulations. But even if taxes are the hardest part, we still need to know whether the hypothetical business is affected by the simplification.(E) Whether the Finance Minister was in office when the previous report came out has no bearing on whether the ranking will change.
Correct option D
The World Bank's Doing Business ranking measures how difficult it is for a hypothetical business to comply with regulations and pay taxes.
The government has made tax filing easier for small and midsized businesses.
Therefore, the country's Doing Business ranking will probably improve.
The key assumption is that the businesses whose tax filing was simplified are actually relevant to the hypothetical business used by the World Bank.
Why (D) is correct
(D) Is what the finance minister considers to be a midsized business smaller than the hypothetical business used to produce the "Doing Business" report?
This directly tests whether the tax simplification applies to the hypothetical business used in calculating the ranking.
Suppose:
The government's "midsized business" = 50 employees
The World Bank's hypothetical business = 500 employees
Then simplifying taxes for businesses with 50 employees might have no effect at all on the hypothetical business's tax burden.
So the ranking might not improve.
But if the hypothetical business falls within the government's definition of small/midsized, then the simplification could affect the ranking, strengthening the Finance Minister's argument.
That's exactly what an Evaluate the Argument question wants: information that could make the argument either stronger or weaker.
Why the others are wrong
(A) Whether easier regulations lead to more new businesses is irrelevant.
The argument is about how the World Bank calculates the ranking, not whether more businesses are created.
(B) Whether businesses are actually complying with tax laws more is irrelevant.
The report measures difficulty of compliance, not the actual compliance rate.
(C) This tells us whether tax preparation is more difficult than other regulations. But even if taxes are the hardest part, we still need to know whether the hypothetical business is affected by the simplification.(E) Whether the Finance Minister was in office when the previous report came out has no bearing on whether the ranking will change.
Correct option D
27 Aug 2026, 05:33
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To evaluate the finance minister's argument, we need to test the link between the premise (the government simplified tax filing for small and midsized businesses) and the conclusion (the country's ranking in the World Bank's "Doing Business" report will probably improve).
The argument relies on the assumption that the simplified tax rules actually apply to the standard hypothetical business used by the World Bank for its report.
Let's break down why (D) is the correct question to evaluate this argument:
Argument Mechanism: The World Bank assesses a specific hypothetical business to standardise rankings. The finance minister notes that tax filing was simplified for small and midsized businesses.
Impact of Question (D):
If YES (the country's definition of a midsized business is smaller than the report's hypothetical business): The hypothetical business evaluated by the World Bank is actually considered large in the minister's country, meaning it won't benefit from the new tax simplifications. Thus, the country's ranking will not improve.
If NO (the hypothetical business falls within the size category of small or midsized businesses): The business used for the report will benefit from the simplified tax filing, supporting the prediction that the ranking will improve.
Why the other options are incorrect:
(A) The rate of new business formation is outside the scope of how the World Bank measures regulations and tax compliance ease.
(B) Actual compliance rates by real businesses do not change how difficult the regulation is on paper for the hypothetical standard business.
(C) Whether tax filing is harder than other regulations doesn't change the fact that making tax filing easier still reduces total overall difficulty, regardless of relative difficulty.
(E) Who was in office when the last report was issued is irrelevant to how the World Bank will calculate the next rankings.
Correct Answer: (D) Is what the finance minister considers to be a midsized business smaller than the hypothetical business used to produce the "Doing Business" report?
The argument relies on the assumption that the simplified tax rules actually apply to the standard hypothetical business used by the World Bank for its report.
Let's break down why (D) is the correct question to evaluate this argument:
Argument Mechanism: The World Bank assesses a specific hypothetical business to standardise rankings. The finance minister notes that tax filing was simplified for small and midsized businesses.
Impact of Question (D):
If YES (the country's definition of a midsized business is smaller than the report's hypothetical business): The hypothetical business evaluated by the World Bank is actually considered large in the minister's country, meaning it won't benefit from the new tax simplifications. Thus, the country's ranking will not improve.
If NO (the hypothetical business falls within the size category of small or midsized businesses): The business used for the report will benefit from the simplified tax filing, supporting the prediction that the ranking will improve.
Why the other options are incorrect:
(A) The rate of new business formation is outside the scope of how the World Bank measures regulations and tax compliance ease.
(B) Actual compliance rates by real businesses do not change how difficult the regulation is on paper for the hypothetical standard business.
(C) Whether tax filing is harder than other regulations doesn't change the fact that making tax filing easier still reduces total overall difficulty, regardless of relative difficulty.
(E) Who was in office when the last report was issued is irrelevant to how the World Bank will calculate the next rankings.
Correct Answer: (D) Is what the finance minister considers to be a midsized business smaller than the hypothetical business used to produce the "Doing Business" report?
