Though domestic car sales have been steady, the economy must be spurre

Question

Though domestic car sales have been steady, the economy must be spurred, so an increase in domestic car sales is necessary. To accomplish this, higher taxes should be levied on imported cars. This increase in the price of imported cars will stimulate domestic car sales.

Which of the following is an additional premise required by the argument above?

A. People consider the price of a car to be a minor factor when deciding which car to buy.

B. If the price of imported cars is increased, some consumers who would have bought them will buy domestic cars.

C. Manufacturers of foreign cars will no longer export cars since the cars will no longer make a profit.

D. The only possible use of the increase in revenues received by domestic car manufacturers is as a stimulus for further growth.

E. The increase in revenues received by domestic car manufacturers is equal to the decrease in revenues lost by foreign manufacturers.

chrisbender · Answer

I'll go with D. Increased domestic car sales is given in the prompt. We need something that links the revenue from these sales to mean a stimulus to the economy.

Render · Answer

1st premise:  Economy must be spurred
 2nd premise:  This can be accomplished through an increase in the sales of domestic cars
 Conclusion:  Increase the tax levies on imported cars

Now, he must be assuming that an increase in the price (since increase in tax --> increase in price) of imported cars will stimulate locals to purchase domestic cars. So, there's a link between the price of imported cars and number of domestic cars purchased by local people.

This is exactly what "B" says.

Abhishek009 · Answer

Will certainly mark (B) as without it the entire arguement falls apart...

If price of imported cars is increased still some consumers keep buying imported cars then the objective of the government will fail and will not lead to the ultimate goal of an increase in domestic car sales.

AbhishekP220108 · Answer

Please provide the explanation along with what is the conclusion and how it is identified

Sajjad1994 · Answer

Hello AbhishekP220108

To identify conclusion, concentrate on certain words often (not always) signal that a conclusion is coming:

Therefore 
 Thus 
 Hence 
 So 
 Consequently 
 As a result 
 It follows that

Here the conclusion is: That price increase will stimulate domestic car sales.

The argument assumes:

Higher price of imported cars means some customers switch to domestic cars. This switch is not stated explicitly in the argument, so it’s an assumption.

Higher taxes on imports → higher prices for imports → more domestic sales only if people who would have bought imports now choose domestic cars instead.

Evaluate options

(A):  Opposite: eople consider price minor → if price minor, then raising import price shouldn’t matter much. This would weaken, not support, the argument. Out.

(B):  If price of imports increases, some consumers who would have bought imports will buy domestic cars. Exactly the missing premise. This connects price increase to switch in demand.

(C):  Foreign manufacturers stop exporting. Not necessary for the argument to work. Too extreme. Argument only needs substitution from some buyers, not complete withdrawal.

(D):  Only possible use of increased revenues is stimulus for growth — irrelevant. Argument is about sales volume, not what manufacturers do with revenue.

(E):  Revenue transfer equality between domestic and foreign — irrelevant to sales stimulation claim.

Answer: B

miag · Answer

Conclusion is:  Higher taxes should be levied on imported cars.  (look for the action step advised by the author to identify this)
 Premise 1: The economy must be spurred.
 Premise 2: An increase in domestic car sales is necessary to spur the economy.
 Premise 3: Taxing imports will increase prices of imported cars.
 Premise 4: Increasing imported car prices will stimulate domestic car sales.

Clearly, without B) the causal link breaks - if imported cars being more expensive does not deter buyers from buying them then the conclusion no longer holds
 Hope this helps!

Though domestic car sales have been steady, the economy must be spurre

Prep Toolkit

Top 5 GMAT Debrief Videos

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards

GMAT Critical Reasoning (CR) Questions

Though domestic car sales have been steady, the economy must be spurre

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards