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The answer is C.


The argument is that corporations are behind the cut in funding. Logically, this would be strengthened by evidence that when corporations aren't involved, no cut occurs. This is exactly what (C) tells us: only when corporations are involved, does this happen.

Why are the rest wrong?
(A) For the past two decades, most alternative-energy initiatives have received little or no government funding. we already knew this, and it doesn't relate to the heart of the argument - whether this is caused by corporations or not
(B) The funding initially earmarked for a government project is always subject to change, given the mechanisms by which the political process operates. this doesn't add much, and if anything it weakens the claim that corporations are the cause
(D) Some projects encouraged by large corporations have seen their funding severely curtailed over the last five years. significantly weakens the claim - it shows corporations do not get their way in funding
(E) All large corporations have made it a point to discourage some forms of research. too general - we don't care about all corporations, and the fact that they "have made a point" of something doesn't mean they succeed
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Over the last five years, every new major alternative-energy initiative that initially was promised government funding has since seen that funding severely curtailed. In no such case has the government come even close to providing the level of funds initially earmarked for these projects. Since large corporations have made it a point to discourage alternative-energy projects, it is likely that the corporations’ actions influenced the government’s funding decisions.

Which one of the following, if true, most strengthens the reasoning above?

(A) For the past two decades, most alternative-energy initiatives have received little or no government funding. - WRONG. Nothing as such signified here as should have been according to the highlighted text.
(B) The funding initially earmarked for a government project is always subject to change, given the mechanisms by which the political process operates. - WRONG. Irrelevant but weakens also.
(C) The only research projects whose government funding has been severely curtailed are those that large corporations have made it a point to discourage. - CORRECT. Straightforward.
(D) Some projects encouraged by large corporations have seen their funding severely curtailed over the last five years. - WRONG. Goes in either direction.
(E) All large corporations have made it a point to discourage some forms of research. - WRONG. Thus any curtailment in govt funding is normal. Weakens.

Answer C.
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akela
Over the last five years, every new major alternative-energy initiative that initially was promised government funding has since seen that funding severely curtailed. In no such case has the government come even close to providing the level of funds initially earmarked for these projects. Since large corporations have made it a point to discourage alternative-energy projects, it is likely that the corporations’ actions influenced the government’s funding decisions.

Which one of the following, if true, most strengthens the reasoning above?

(A) For the past two decades, most alternative-energy initiatives have received little or no government funding.
(B) The funding initially earmarked for a government project is always subject to change, given the mechanisms by which the political process operates.
(C) The only research projects whose government funding has been severely curtailed are those that large corporations have made it a point to discourage.
(D) Some projects encouraged by large corporations have seen their funding severely curtailed over the last five years.
(E) All large corporations have made it a point to discourage some forms of research.

Source: LSAT

The stem states that " every new major alternative-energy initiative that initially was promised government funding has since seen that funding severely curtailed ", with respect to option C, which states "The only research projects whose government funding has been severely curtailed are those that large corporations have made it a point to discourage." does this really strengthen the reasoning?
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