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Unformatted text preview: The Official Guide for GMAT Review 11th Edition 8.6 Critical Reasoning Answer Explanations The following discussion is intended to familiarize you with the most efficient and effective approaches to critical reasoning questions. The particular questions in this chapter are generally representative of the kinds of critical reasoning questions you wilt encounter on the GMAT ® . Remember that it is the problem solving strategy that is important, not the specific details of a particular question. 1. Some economists view the Kennedy Johnson tax cut of 1964, which radically reduced corporate and individual taxes, as the impetus for the substantial prosperity enjoyed by the United States in the late 1960's and early 1970's. Which of the following, if true, would most weaken the claim that the tax cut of 1964 was the impetus for economic prosperity? (A) Modernized, more productive factories were built in the late 1960's as a result of the funds made available by the tax cut. (S) Improved economic conditions in Western Europe and Japan resulted in substantially increased demand for United States manufactured goods in the late 1960's. C) The tax cut of 1964 contained regulations concerning tax shelters that prompted investors to transfer their savings to more economically productive investments. D) Personal income after taxes rose in the years following 1964. E) In the late 1960's, unemployment was relatively low compared with the early 1960's. Argument Evaluation Situation Some economists claim that the Kennedy-Johnson tax cut of 1964 was responsible for the prosperity of the late 1960's and early 1970's. Reasoning Which point weakens the conclusion that the 1964 tax cut caused the later prosperity? When two events occur close together in time, it is possible for one to be mistaken as the cause of the other; this could be the case with the economists' claim. The conclusion of this argument may be weakened by demonstrating another possible cause of the prosperity. If improved economic conditions among the international trading partners of the United States resulted in a significantly increased demand for United States manufactured goods in the late 1960's, the rise in demand would provide an alternative explanation for the prosperity and weaken the argument. A B C D E The modern, more productive factories made possible by the tax cut offer a reason in support of the conclusion, not against it. Correct. This statement properly identifies a factor that weakens the argument by providing an alternative explanation. The economically productive investments made possible by the tax cut provide an example that supports, rather than weakens, the conclusion. The rise in personal income after 1964 suggests that the tax cut of 1964 was responsible for this increase. ....
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This note was uploaded on 02/27/2012 for the course FIN 132 taught by Professor Afda during the Spring '12 term at Centenary College New Jersey.
- Spring '12