While Governor Verdant has been in office, the state’s budget has incr

Question

While Governor Verdant has been in office, the state’s budget has increased by an average of 6 percent each year. While the previous governor was in office, the state’s budget increased by an average of 11.5 percent each year. Obviously, the austere budgets during Governor Verdant’s term have caused the slowdown in the growth in state spending.

Which of the following, if true, would most seriously weaken the conclusion drawn above?

(A) The rate of inflation in the state averaged 10 percent each year during the previous governor’s term in office and 3 percent each year during Verdant’s term.

(B) Both federal and state income tax rates have been lowered considerably during Verdant’s term in office.

(C) In each year of Verdant’s term in office, the state’s budget has shown some increase in spending over the previous year.

(D) During Verdant’s term in office, the state has either discontinued or begun to charge private citizens for numerous services that the state offered free to citizens during the previous governor’s term.

(E) During the previous governor’s term in office, the state introduced several so-called “austerity” budgets intended to reduce the growth in state spending.

karlsyf · Accepted Answer

I think the answer is A, reasoning below.

Budget is equivalent to spending, i.e. output.

Argument is a lack of spending has caused economic slowdown under Governor Verdant.

B) is incorrect as taxes are not the only source of state funding (bonds etc), and reduced taxes should spur business, not hinder it.
C) does not consider inflationary effects (but hints at answer)
D) concerns where money is raised, not how it is spent. Burden of paying for services moved from general levy (tax) to specific levy (fees) and hence does not concern spending. If services had been moved to private sector would be a valid argument, but they haven't.
E) concerns the cause of austere budgets, not their effect, not relevant.

Answer is A) real spending increase under Verdant is 6% - 3% = 3%, real spending increase under previous governer is 11.5% - 10% = 1.5%

Clearly Verdant spends more in real terms, and therefore is not more austere.

IanStewart · Answer

This doesn't strike me as a particularly realistic GMAT question, because it requires you to make assumptions about what an 'austere budget' might be. Still, C is consistent with the passage, so it's not right. B and D both support the conclusion - they are examples of 'austere' budget measures that may have led to a decline in state spending. E also supports the conclusion - if the previous governor introduced austerity budgets and still saw an 11% increase in spending, how austere must Verdant's budgets have been to bring that down to 6%?

A should be the right answer here - the previous governor's spending barely kept pace with inflation, while Verdant increased spending at twice the rate of inflation. In real dollar terms, then, Verdant was increasing spending faster than the previous governor. The conclusion is unwarranted; state spending hasn't really slowed down at all.

priyankurml · Answer

I would go with A.

Conclusion: Budget caused slowdown 
Premise: budget was low when Governor Verdant was in office.

A The rate of inflation in the state averaged 10 percent each year during the previous governor’s term in office and 3 percent each year during Verdant’s term.
 - inflation was low therefore budget was low. Therefore low budget is not the real cause of slowdown rather inflation might the cause. 
(E) During the previous governor’s term in office, the state introduced several so-called “austerity” budgets intended to reduce the growth in state spending
 - But it is not clear what happened under the reign of Governor Verdant

Albator · Answer

While Governor Verdant has been in office, the state’s budget has increased by an average of 6 percent each year. While the previous governor was in office, the state’s budget increased by an average of 11.5 percent each year.  Obviously, the austere budgets during Governor Verdant’s term have caused the slowdown in the growth in state spending. 
Which of the following, if true, would most seriously weaken the conclusion drawn above?

(A) The rate of inflation in the state averaged 10 percent each year during the previous governor’s term in office and 3 percent each year during Verdant’s term.
 Seems to be right. Expenses have slow down since prices are linked to inflation.

(B) Both federal and state income tax rates have been lowered considerably during Verdant’s term in office.
 Actually, out of scope, because it introduced Federal Tax which has nothing to do with State Budget 
(C) In each year of Verdant’s term in office, the state’s budget has shown some increase in spending over the previous year.
 In line with the premises 
(D) During Verdant’s term in office, the state has either discontinued or begun to charge private citizens for numerous services that the state offered free to citizens during the previous governor’s term.
 Cant be since it is actually strengthening the argument, some of state expenses have been passed onto Citizens 
(E) During the previous governor’s term in office, the state introduced several so-called “austerity” budgets intended to reduce the growth in state spending.
 Out of Scope

rbriscoe · Answer

A is the answer:

While Governor Verdant has been in office, the state’s budget has increased by an average of 6 percent each year. While the previous governor was in office, the state’s budget increased by an average of 11.5 percent each year. Obviously, the austere budgets during Governor Verdant’s term have caused the slowdown in the growth in state spending.

Which of the following, if true, would most seriously weaken the conclusion drawn above?

(A) The rate of inflation in the state averaged 10 percent each year during the previous governor’s term in office and 3 percent each year during Verdant’s term.

It states the the reason the new govenor is spending at a lower rate is because inflation is lower therefore cost are rising at a slower rate. Thus spending hasn't increase because prices have not increased. This means he is spending the same but prices have not risen so his expenses hasn't risen. This is directly related to spending.
 
(B) Both federal and state income tax rates have been lowered considerably during Verdant’s term in office.

This ask you to link the outside idea that lower taxes means less spending and thus is outsie the scope of the arguement.

(C) In each year of Verdant’s term in office, the state’s budget has shown some increase in spending over the previous year.

This is given in the paragraph. He had 6% increase on avarage. Does not weaken.

(D) During Verdant’s term in office, the state has either discontinued or begun to charge private citizens for numerous services that the state offered free to citizens during the previous governor’s term.

This supports the arguement.

(E) During the previous governor’s term in office, the state introduced several so-called “austerity” budgets intended to reduce the growth in state spending.

This is close but no cigar. If this statement included " which were expected to not effect the growth of state spending till sometime in the future"  it would have been a stonger candidate. However it does not directly erode at the assumption that the new govenor is responsible for the reduced spending.

ChrisLele · Answer

The argument boils down to the numbers: the state's budget increased by less percent during
Governor V.'s tenure than that of his predecessor (6% vs. 11.5%). Thus, Gov. V. represented a
slow down in budget spending.

Can we rely solely on the numbers? That question becomes the crux of the conclusion.

What if there was more inflation during the previous governor's tenure? Well, then we have
an alternative explanation for the greater percentage increase in state budget during the
previous governor's term.

Therefore, (A) is the answer.

@newdawn - the phenomenon in (D) could have multiple interpretations. For one, that the state discontinued/charged citizens for services does not definitively prove that the state spending slowed down during Gov. V's time (remember this is the conclusion). Perhaps, the budget actually increased and the funds were spent on other projects, e.g. state highway, etc. Indeed, the money that was saved from not scrapping citizens' services could be used for new projects.

Basically (D) doesn't provide us with any info. regarding the actual budget size during Gov. V's reign - just that certain programs were eliminated.

Hope that helps

metallicafan · Answer

+1 A

I think this example could help to understand the answer.

Let's assume that both governors had to buy 100 cans of Coke for their office employees. Also, let's assume that at the beginning the price of each can is $ 1 (total: $100).

Now, during the previous governor's period the inflation was 11.5%. So, he had to pay $ 111.5 for the 100 bottles.
Ok, suppose that the price is again $1, but the inflation of the current governor's period was 3%. So, he paid $ 103.

BUT, in both cases, both bought 100 cans!

So, we cannot conclude that the budgets were austere.

Hope it helps.

pqhai · Answer

I considered A and E. Finally I picked E and got the question wrong. I did some researches and see there are many people on the same boat with me. Because we think former governor's policies (austerity budgets) will affect the growth rate in the current governor term. However the reference is too far. Answer A shows a more direct reason. Very good question, thanks so much.

jlgdr · Answer

Yes, I can help. OK let's do it! Conclusion: Austere B of New G ---> Slowdown in growth in spending. Premise: New G, B +6%, Old G B +11.5% So this is basically saying that since the budget increased less then the new governor is also spending less money. Which will weaken? Sounds like we need to find a reason to show why despite an declining budget the amount of spending has not decreased at all. (A) The rate of inflation in the state averaged 10 percent each year during the previous governors term in office and 3 percent each year during Verdants term. ----> So this basically says that if inflation was higher previously then this may be the the reason why state budgets were higher during that time. So the fact that we have a lower budget now is explained by some other reason. So the use of this piece of evidence to prove that the G is spending less is not precise. We'll leave this one in (B) Both federal and state income tax rates have been lowered considerably during Verdants term in office ---> OK, so taxes are lowered, this could mean with have more or less budget, we don't know depends on laffer curve, so this tells us nothing (C) In each year of Verdants term in office, the states budget has shown some increase in spending over the previous year--> OK this is the past, we don't really care what happened (D) During Verdants term in office, the state has either discontinued or begun to charge private citizens for numerous services that the state offered free to citizens during the previous governors term.--> OK so if they provide less free services they should have a higher budget, well it seems that it is not working for some reason, but again this doesn't really tells us anything (E) During the previous governors term in office, the state introduced several so-called austerity budgets intended to reduce the growth in state spending.---> So old G introduced measures to reduce growth in spending. This is again something that happened in the past and does not really give us much information. So I will go with (A) Hope it helps! Cheers! J

Kudos please!

LogicGuru1 · Answer

Answer is A

Here's the explanation

While Governor Verdant has been in office, the state’s budget has increased by an average of 6 percent each year. While the previous governor was in office, the state’s budget increased by an average of 11.5 percent each year. Obviously, the austere budgets during Governor Verdant’s term have caused the slowdown in the growth in state spending.

Which of the following, if true, would most seriously weaken the conclusion drawn above?

(A) The rate of inflation in the state averaged 10 percent each year during the previous governor’s term in office and 3 percent each year during Verdant’s term.
Higher inflation means less purchasing power and a weak currency value. Meaning more dollars will be needed to buy anything. Lower inflation means the same thing can be bought in less dollars. Example when inflation is 10 % a car would cost you 1000 dollar but when inflation is 3 % the same car would cost you 400 $. Now since inflation is reduced by 66% (3/10), the purchasing power of dollar has increased by 66%. so people can buy items by paying less money. So less money is buying more things. Now when you spend less obviously the market will receive less and hence the general situation will appear as a slowdown. 
hence A is right.

(B) Both federal and state income tax rates have been lowered considerably during Verdant’s term in office.
It's opposite. It strengthen. Low income tax means more money in hands. So people should have spend more money.

(C) In each year of Verdant’s term in office, the state’s budget has shown some increase in spending over the previous year.
Mildly Strengthening. If each year the budget spending is increasing then it means it started increasing the first year of verdant being elected. if verdant become governor in 2010 , the spending was more than 2009. But in 2009 there must be another governor in the office. so verdant actually performed better than him in first year and keep on performing better with each passing year. So by no means the lack of budget spending can be attributed to Verdant who is actually better than the earlier governor. 
  
 (D) During Verdant’s term in office, the state has either discontinued or begun to charge private citizens for numerous services that the state offered free to citizens during the previous governor’s term.
Strengthening. Two things are happening here. Earlier water was free, now its being charged. So people are spending. spending should increase
Earlier free health checkup was done. It is not done now; it's discontinued. So the cost of these free checkups should reflect in other ways in economies. 
 
(E) During the previous governor’s term in office, the state introduced several so-called “austerity” budgets intended to reduce the growth in state spending.
Again strengthening. If there is a slowdown , its because of the decision of earlier governor and not because of verdant.

thanks

AryaSwagat · Answer

There are many problems with the question. 
Most of the answers are curated to match the Official Answer Key without analyzing the question much. The conclusion is "Austere budget caused slowdown in state pending". Now had the State Pending been a straight forward activity like handing over the paper money for expenditures, we could determine what was the intrinsic value of spending correlating with inflation. But state spending is a much wider set of activities and most of them are only in provisioning/allocation of funds or budgets. How can I correlate it with inflation to determine its relative value with respect to a previous period? 
Also it is difficult to determine the cause and effect that govt spending had on inflation, the durations are fairly long for several years of each governor's term. The theory that increased spending caused the increased inflation and the austere spending was an effort to control the inflation can not be ruled out. 
IMO question does not have a straight forward solution.

agrasan · Answer

Thanks  IanStewart

I did this question yesterday and was analysing my mistake as I had selected (D).

My reasoning was that the argument said:

Austere budget during Verdant's term --> Slowdown in spending

I didn't know what  "austere budget"  is so I thought we could weaken it by introducing another reason and (D) talks about other reason but now realise that (C) is a form of austere budget only  (in which government announces that they will spend less money).  Can I say that I did this mistake because of the vocabulary void on "austere budget" like you have mentioned below?

While Governor Verdant has been in office, the state’s budget has incr

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While Governor Verdant has been in office, the state’s budget has incr

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