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Whereas United States economic productivity grew at an annual rate of
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Updated on: 06 Aug 2022, 09:47
Updated on: 06 Aug 2022, 09:47
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Question 1
00:00
A
B
C
D
E
Difficulty:
75%
(hard)
based on 1577 sessions
48% (03:32) correct
52%
(03:31) wrong
Question 2
00:00
A
B
C
D
E
Difficulty:
25%
(medium)
based on 1831 sessions
69% (01:06) correct 31%
(01:19) wrong
Question 3
00:00
A
B
C
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E
Difficulty:
25%
(medium)
based on 1824 sessions
67% (01:06) correct 33%
(01:09) wrong
Question 4
00:00
A
B
C
D
E
Difficulty:
15%
(low)
based on 1726 sessions
79% (01:16) correct 21%
(01:28) wrong (This passage is excerpted from material published in 1997)
Whereas United States economic productivity grew at an annual rate of 3 percent from 1945 to 1965, it has grown at an annual rate of only about 1 percent since the early 1970’s. What might be preventing higher productivity growth? Clearly, the manufacturing sector of the economy cannot be blamed. Since 1980, productivity improvements in manufacturing have moved the United States from a position of acute decline in manufacturing to one of world prominence. Manufacturing, however, constitutes a relatively small proportion of the economy. In 1992, goods-producing businesses employed only 19.1 percent of American workers, whereas service-producing businesses employed 70 percent. Although the service sector has grown since the late 1970’s, its productivity growth has declined. Several explanations have been offered for this declined and for the discrepancy in productivity growth between the manufacturing and service sectors. One is that traditional measures fail to reflect service-sector productivity growth because it has been concentrated in improved quality of services. Yet traditional measures of manufacturing productivity have shown significant increases despite the under measurement of quality, whereas service productivity has continued to stagnate. Others argue that since the 1970’s, manufacturing workers, faced with strong foreign competition, have learned to work more efficiently in order to keep their jobs in the United States, but service workers, who are typically under less global competitive pressure, have not. However, the pressure on manufacturing workers in the United States to work more efficiently has generally been overstated, often for political reasons. In fact, while some manufacturing jobs have been lost due to foreign competition, many more have been lost simply because of slow growth in demand for manufactured goods.
Yet another explanation blames the federal budget deficit: if it were lower, interest rates would be lower too, thereby increasing investment in the development of new technologies, which would spur productivity growth in the service sector. There is, however, no dearth of technological resources, rather, managers in the service sector fail to take advantage of widely available skills and machines. High productivity growth levels attained by leading edge service companies indicate that service sector managers who wisely implement available technology and choose skillful workers can significantly improve their companies’ productivity. The culprits for service-sector productivity stagnation are the forces such as corporate takeovers and unnecessary governmental regulation that distract managers from the task of making optimal use of available resources.
Whereas United States economic productivity grew at an annual rate of 3 percent from 1945 to 1965, it has grown at an annual rate of only about 1 percent since the early 1970’s. What might be preventing higher productivity growth? Clearly, the manufacturing sector of the economy cannot be blamed. Since 1980, productivity improvements in manufacturing have moved the United States from a position of acute decline in manufacturing to one of world prominence. Manufacturing, however, constitutes a relatively small proportion of the economy. In 1992, goods-producing businesses employed only 19.1 percent of American workers, whereas service-producing businesses employed 70 percent. Although the service sector has grown since the late 1970’s, its productivity growth has declined. Several explanations have been offered for this declined and for the discrepancy in productivity growth between the manufacturing and service sectors. One is that traditional measures fail to reflect service-sector productivity growth because it has been concentrated in improved quality of services. Yet traditional measures of manufacturing productivity have shown significant increases despite the under measurement of quality, whereas service productivity has continued to stagnate. Others argue that since the 1970’s, manufacturing workers, faced with strong foreign competition, have learned to work more efficiently in order to keep their jobs in the United States, but service workers, who are typically under less global competitive pressure, have not. However, the pressure on manufacturing workers in the United States to work more efficiently has generally been overstated, often for political reasons. In fact, while some manufacturing jobs have been lost due to foreign competition, many more have been lost simply because of slow growth in demand for manufactured goods.
Yet another explanation blames the federal budget deficit: if it were lower, interest rates would be lower too, thereby increasing investment in the development of new technologies, which would spur productivity growth in the service sector. There is, however, no dearth of technological resources, rather, managers in the service sector fail to take advantage of widely available skills and machines. High productivity growth levels attained by leading edge service companies indicate that service sector managers who wisely implement available technology and choose skillful workers can significantly improve their companies’ productivity. The culprits for service-sector productivity stagnation are the forces such as corporate takeovers and unnecessary governmental regulation that distract managers from the task of making optimal use of available resources.
1. Which of the following, if true, would most weaken the budget-deficit explanation for the discrepancy mentioned in line 57?
(A) Research shows that the federal budget deficit has traditionally caused service companies to invest less money in research and development of new technologies
(B) New technologies have been shown to play a significant role in companies that have been able to increase their service productivity
(C) In both the service sector and manufacturing, productivity improvements are concentrated in gains in quality
(D) The service sector typically requires larger investments in new technology in order to maintain productivity growth than those of manufacturing
(E) High interest rates tend to slow the growth of manufacturing productivity as much as they slow the growth of service-sector productivity in the United States
2. The passage states which of the following about the effect of foreign competition on the American manufacturing sector since the 1970’s?
A. It has often been exaggerated.
B. It has not been a direct cause of job loss.
C. It has in large part been responsible for the subsequent slowing of productivity growth.
D. It has slowed growth in the demand for manufactured goods in the United States.
E. It has been responsible for the majority of American jobs lost in manufacturing.
3. It can be inferred from the passage that which of the following was true of the United States manufacturing sector in the years immediately prior to 1980?
A. It was performing relatively poorly.
B. It was in a position of world prominence.
C. It was increasing its productivity at an annual rate of 3 percent.
D. It was increasing its productivity at an annual rate of 1 percent.
E. Its level of productivity was higher than afterward.
4. The author of the passage would be most likely to agree with which of the following statements about productivity improvements in United States service companies?
(A) Such improvements would be largely attributable to efficiencies resulting from corporate takeovers.
(B) Such improvements would depend more on wise implementation of technology than on managers' choice of skilled workers.
(C) Such improvements would be more easily accomplished if there were fewer governmental regulations of the service sector.
(D) Such improvements would require companies to invest heavily in the development of new technologies.
(E) Such improvements would be attributable primarily to companies' facing global competitive pressure.
(A) Research shows that the federal budget deficit has traditionally caused service companies to invest less money in research and development of new technologies
(B) New technologies have been shown to play a significant role in companies that have been able to increase their service productivity
(C) In both the service sector and manufacturing, productivity improvements are concentrated in gains in quality
(D) The service sector typically requires larger investments in new technology in order to maintain productivity growth than those of manufacturing
(E) High interest rates tend to slow the growth of manufacturing productivity as much as they slow the growth of service-sector productivity in the United States
2. The passage states which of the following about the effect of foreign competition on the American manufacturing sector since the 1970’s?
A. It has often been exaggerated.
B. It has not been a direct cause of job loss.
C. It has in large part been responsible for the subsequent slowing of productivity growth.
D. It has slowed growth in the demand for manufactured goods in the United States.
E. It has been responsible for the majority of American jobs lost in manufacturing.
3. It can be inferred from the passage that which of the following was true of the United States manufacturing sector in the years immediately prior to 1980?
A. It was performing relatively poorly.
B. It was in a position of world prominence.
C. It was increasing its productivity at an annual rate of 3 percent.
D. It was increasing its productivity at an annual rate of 1 percent.
E. Its level of productivity was higher than afterward.
4. The author of the passage would be most likely to agree with which of the following statements about productivity improvements in United States service companies?
(A) Such improvements would be largely attributable to efficiencies resulting from corporate takeovers.
(B) Such improvements would depend more on wise implementation of technology than on managers' choice of skilled workers.
(C) Such improvements would be more easily accomplished if there were fewer governmental regulations of the service sector.
(D) Such improvements would require companies to invest heavily in the development of new technologies.
(E) Such improvements would be attributable primarily to companies' facing global competitive pressure.
Originally posted by JarvisR on 03 Jul 2015, 03:34.
Last edited by Sajjad1994 on 06 Aug 2022, 09:47, edited 7 times in total.
Last edited by Sajjad1994 on 06 Aug 2022, 09:47, edited 7 times in total.
Updated - Complete topic (281).
Re: Whereas United States economic productivity grew at an annual rate of
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21 Jul 2017, 19:05
21 Jul 2017, 19:05
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Expert Reply
Question 1
Ashy Boy
8 minutes for this passage. Got 3 correct. Can someone explain why the answer for Question 1 is option E and not A?
First, remember what we are trying to explain: "Several explanations have been offered for [the decline in the service sector's productivity growth] and for the discrepancy in productivity growth between the manufacturing and service sectors."One possible explanation for this discrepancy in productivity growth is the budget-deficit explanation:
Quote:
Yet another explanation blames the federal budget deficit: if it were lower, interest rate would be lower too, thereby increasing investment in the development of new technologies, which would spur productivity growth in the service sector.
- The author contends that if the federal budget deficit were lower, then the interest rate would be lower too.
- If the interest rate were lower, investment in the development of new technologies would increase.
- Development of new technologies would spur productivity growth in the service sector. (note that the author does not say that the new technologies would spur productivity growth in the manufacturing sector)
Quote:
(A) Research shows that the federal budget deficit has traditionally caused service companies to invest less money in research and development of new technologies
This statement is consistent with the author's explanation, implying that a federal budget deficit decreases the amount of investment in new technologies. This does not WEAKEN the author's explanation, so (A) can be eliminated.Quote:
(E) High interest rates tend to slow the growth of manufacturing productivity as much as they slow the growth of service-sector productivity in the United States
If high interest rates slowed growth equally in BOTH sectors, then the interest rates would not explain the DIFFERENCE (discrepancy) in productivity growth between the manufacturing and service sectors. This goes against the logic described above, thus weakening the explanation.I hope that helps!
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Re: Whereas United States economic productivity grew at an annual rate of
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27 Jun 2017, 19:44
27 Jun 2017, 19:44
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1)You need to look at the entire passage in order to be able to answer any question as it would put the highlighted parts in context. Just to summarise, let's consider the below points:
1. Economic growth in the US has been sluggish
2. Manufacturing employs only 19.1% American workers whereas services employ 70% of the American workers
3. Productivity has grown in the manufacturing sector whereas it has shown a decline in services
4. Several possible arguments to showcase why manufacturing has shown an improvement in productivity whereas despite growth, services has shown a productivity decline
5. The author now talks about another possible reason why manufacturing is growing whereas services has stagnated
i. Argument by proponents: lower federal budget deficit -> lower interest rate -> higher investment in development of new technologies -> higher growth in services sector
ii. Service-sector managers who implement available technology , choose skillful workers can improve their companys' productivity
iii. Culprits of service sector stagnation: corporate takeovers and unnecessary governmental regulation
While you have not highlighted the part which the question is referring to, I am assuming it is the one mentioned in Premise 5 (i) with the linkage between federal budget deficit and investment in technology for service sector.
Now, looking at the options:
A. This option ends up strengthening the explanation given by the proponent of the federal budget deficit theory. INCORRECT
B. This again strengthens the argument as it implies that new technology, which is currently being hindered by the federal budget deficit, can actually improve the productivity in service sector companies. INCORRECT
C. This is not in context to the highlighted text. The highlighted text is about whether a particular economic policy can improve productivity in the service sector. This option gives more details about what the productivity improvements will end up impacting. INCORRECT
D. An option which strengthen the relationship in the highlighted text. It highlights the difference between service and manufacturing implying higher investment in technology for service which is being hindered by the federal budget deficit. INCORRECT
E. The passage at multiple points mentions that it is trying to find the root cause for why manufacturing industry productivity is registering a growth while the service industry productivity is declining. For a reason to be valid it should impact the service industry more than it does manufacturing. This option attacks that gap showcasing that the high interest rates impact both the industries equally and this cannot be looked at as a cause for sluggish service sector productivity alone. CORRECT
Thus, the answer is E.
2)"Please go through the line "since the 1970’s, manufacturing workers, faced with strong foreign competition, have learned to work more efficiently in order to keep their jobs in the United States, but service workers, who are typically under less global competitive pressure, have not. However, the pressure on manufacturing workers in the United States to work more efficiently has generally been overstated, often for political reasons. In fact, while some manufacturing jobs have been lost due to foreign competition, many more have been lost simply because of slow growth in demand for manufactured goods.". Hence A.
3)"Since 1980, productivity improvements in manufacturing have moved the United States from a position of acute decline in manufacturing to one of world prominence." It is asking immediate before 1980. Hence A.
4)"The culprits for service-sector productivity stagnation are the forces—such as corporate takeovers and unnecessary governmental regulation—that distract managers from the task of making optimal use of available resources". Only C makes sense.
1. Economic growth in the US has been sluggish
2. Manufacturing employs only 19.1% American workers whereas services employ 70% of the American workers
3. Productivity has grown in the manufacturing sector whereas it has shown a decline in services
4. Several possible arguments to showcase why manufacturing has shown an improvement in productivity whereas despite growth, services has shown a productivity decline
5. The author now talks about another possible reason why manufacturing is growing whereas services has stagnated
i. Argument by proponents: lower federal budget deficit -> lower interest rate -> higher investment in development of new technologies -> higher growth in services sector
ii. Service-sector managers who implement available technology , choose skillful workers can improve their companys' productivity
iii. Culprits of service sector stagnation: corporate takeovers and unnecessary governmental regulation
While you have not highlighted the part which the question is referring to, I am assuming it is the one mentioned in Premise 5 (i) with the linkage between federal budget deficit and investment in technology for service sector.
Now, looking at the options:
A. This option ends up strengthening the explanation given by the proponent of the federal budget deficit theory. INCORRECT
B. This again strengthens the argument as it implies that new technology, which is currently being hindered by the federal budget deficit, can actually improve the productivity in service sector companies. INCORRECT
C. This is not in context to the highlighted text. The highlighted text is about whether a particular economic policy can improve productivity in the service sector. This option gives more details about what the productivity improvements will end up impacting. INCORRECT
D. An option which strengthen the relationship in the highlighted text. It highlights the difference between service and manufacturing implying higher investment in technology for service which is being hindered by the federal budget deficit. INCORRECT
E. The passage at multiple points mentions that it is trying to find the root cause for why manufacturing industry productivity is registering a growth while the service industry productivity is declining. For a reason to be valid it should impact the service industry more than it does manufacturing. This option attacks that gap showcasing that the high interest rates impact both the industries equally and this cannot be looked at as a cause for sluggish service sector productivity alone. CORRECT
Thus, the answer is E.
2)"Please go through the line "since the 1970’s, manufacturing workers, faced with strong foreign competition, have learned to work more efficiently in order to keep their jobs in the United States, but service workers, who are typically under less global competitive pressure, have not. However, the pressure on manufacturing workers in the United States to work more efficiently has generally been overstated, often for political reasons. In fact, while some manufacturing jobs have been lost due to foreign competition, many more have been lost simply because of slow growth in demand for manufactured goods.". Hence A.
3)"Since 1980, productivity improvements in manufacturing have moved the United States from a position of acute decline in manufacturing to one of world prominence." It is asking immediate before 1980. Hence A.
4)"The culprits for service-sector productivity stagnation are the forces—such as corporate takeovers and unnecessary governmental regulation—that distract managers from the task of making optimal use of available resources". Only C makes sense.
