GMAT Critical Reasoning - Economies in Which a High Percentage of Resources are Invested

Question: Economies in which a high percentage of resources are invested in research and development show greater growth in the long run than do those in which resources are channeled into consumption. Japanese workers spend a higher percentage of their income investing in research and development than do American workers.

To grow as fast as Japan has in the past three decades, the United States must change the tax code in order to encourage savings and investment and discourage debt.

Which of the following, if true, tends to weaken the argument?

(A) Japanese research is more focused on consumers than is research by American firms.
(B) Class mobility, highly valued in American culture, is encouraged by a growing rather than a stagnant economy.
(C) Studies have shown that countries with high consumption rates prosper in the short run.
(D) Proposed changes to the tax code could involve strict limits on the deductibility of interest and increased allowance for research.
(E) Because a decreasing percentage of the United States is under 40, an age when savings are traditionally low, the savings rate will increase without changes to the tax code.

“Economies in which a high percentage of resources are invested in research and development” – is a GMAT Critical question. To answer the question, a candidate can by either finding a piece of evidence that would weaken the argument or logical flaws in the argument. GMAT critical reasoning tests the logical and analytical skills of the candidates. This topic requires candidates to find the argument's strengths and weaknesses or the logical flaw in the argument. The GMAT CR section contains 10 -13 GMAT critical reasoning questions out of 36 GMAT verbal questions.

Answer: E
Explanation: GMAT critical reasoning tests the reasoning skills along with the candidate's logical and analytical thinking abilities. The candidate has to deduce the correct option by finding the logically correct argument.

Let us check the statements on which the argument depends:

(A) This says that the people of Japan are more focussed on the research on the consumer compared to the American Companies. This however doesn't discredit the fact that the Japanese are investing in research. Therefore this option is not the correct answer.
(B) This sentence talks about the class mobility and value of American culture and it is mentioned that it is due to their growing economy. This adds strength to the fact Americans value consumption over research. therefore this option cannot be the correct choice.
(C) This also lends strength to the fact that prosperity is guaranteed only for worthwhile for longer instances we have to look for alternatives. Therefore this answer is wrong.
(D) This doesn't guarantee long-term benefits. So this is not viable.
(E) This strengthens the idea that savings dynamics will shift, leading to Americans choosing to forego a tax system. Any alternative that says there is no need for the US to make the suggested move or that suggests a weakness in the proposal would undermine the argument since the conclusion suggests that the US must reform its tax rules in order to enhance savings and investments. The correct response is Option E because it offers an alternative option for US savings to increase.

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