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24 Jun 2019, 11:05
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E
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
25%
(medium)
Question Stats:
77% (01:49) correct
23%
(01:59)
wrong
based on 282
sessions
History
Date
Time
Result
Not Attempted Yet
It is true that increasing demand for a limited number of products drives up the price of those products. However, if we cut tax rates, then people will retain a higher percentage of their income and will be encouraged to work harder and produce more. Therefore, the increase in demand resulting from greater disposable income will not result in higher prices for the products available.
In the passage above, the author makes which of the following arguments?
(A) Reducing taxes is likely to result in less disposable income.
(B) Reducing taxes is likely to decrease demand.
(C) Reducing taxes can fail to result in greater disposable income.
(D) Reducing taxes will probably restrict the availability of certain products.
(E) Reducing taxes will not necessarily lead to increased prices
In the passage above, the author makes which of the following arguments?
(A) Reducing taxes is likely to result in less disposable income.
(B) Reducing taxes is likely to decrease demand.
(C) Reducing taxes can fail to result in greater disposable income.
(D) Reducing taxes will probably restrict the availability of certain products.
(E) Reducing taxes will not necessarily lead to increased prices
25 Jun 2019, 05:13
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Quote:
The right answer here is E. Though worded unconventionally, this is essentially an inference question. It's asking us what the authors actual argument is.
A - This is not true. If anything, the author suggests that people would have more disposable income. OUT
B - We are not told anything about demand. OUT
C - This is possibly true in real life, but the author has not addressed that. Therefore, from the premises we have been given, we can't say for sure that reducing taxes have a possibility to fail to lead to greater disposable income. OUT
D - We don't know anything about availability. OUT
E - This is the main point of the author. Lowering taxes does not HAVE to mean higher prices. It is also the central claim here, and therefore CORRECT.
- Matoo
28 Jun 2020, 05:35
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REASONING:
reducing taxes -> increased disposable income -> increased demand -> no higher prices for products.
ANSWER (E)
reducing taxes -> increased disposable income -> increased demand -> no higher prices for products.
ANSWER (E)
