It Is Paradoxical That The Old Countries Involve Themselves GMAT Reading Comprehension

Reading Passage Question

It is paradoxical that the old countries involve themselves in the most absurd complexities to prevent a shrinkage of their agricultural population and the new countries seem even more anxious to speed up the growth of the industrial population by artificial means. Much of this endeavor on the latter's part seems to be based on a rather naive fallacy of the post hoc ergo propter hoc variety: because historically the growth of wealth has regularly been accompanied by rapid industrialization, it is assumed that industrialization will bring about a more rapid growth of wealth. This involves a clear confusion of an intermediate effect with a cause. It is true that, as productivity per head increases as a result of investment in knowledge and skill, more and more of the additional output will be wanted in the form of industrial products. It is also true that a substantial increase in the production of food in those countries will require an increased supply of tools. But neither of these considerations alters the fact that if large-scale industrialization is to be the most rapid way of increasing average income, there must be an agricultural surplus available so that an industrial population can be fed. If unlimited amounts of capital were available and if the mere availability of sufficient capital could speedily change the knowledge and attitudes of an agricultural population, it might be sensible for such countries to impose a planned reconstruction of their economies on the model of the most advanced capitalist countries. This, however, is clearly not within the range of actual possibilities. It would seem, indeed, that if such countries as India and China are to effect a rapid rise in the standard of living, only a small portion of such capital as becomes available should be devoted to the creation of elaborate industrial equipment and perhaps none of it to the kind of highly automatized, 'capital-intensive' plants that are characteristic of countries where the value of labor is very high, and that these countries should aim at spreading such capital as widely and thinly as possible among those uses that will directly increase the production of food.

The essentially unpredictable developments that may be produced by the application of advanced technological knowledge to economies extremely poor in capital are more likely to be speeded up if opportunity for free development is provided than if a pattern is imposed which is borrowed from societies in which the proportion between capital and labor is altogether different from what it will be in the newer economies in the foreseeable future. However strong a case there may exist in such countries for the government's taking the initiative in providing examples and spending freely on spreading knowledge and education, it seems to me that the case against over-all planning and direction of all economic activity is even stronger there than in more advanced countries.

“It is paradoxical that the old countries involve themselves”- is a GMAT reading comprehension passage with answers. Candidates must have a solid grasp on English GMAT reading comprehension. There are four comprehension questions in this GMAT Reading Comprehension section. GMAT Reading Comprehension questions are designed to evaluate candidates' abilities to comprehend, analyze, and apply information or concepts. Candidates can actively prepare by answering GMAT Reading Comprehension Practice Questions.

Solutions and Explanation

1. According to this passage, which term below describes the argument that industrialization will accelerate the growth of wealth?

1. illogical
2. probabilistic
3. possible
4. economic
5. deterministic

2. What does the author of this passage recommend in order to produce a rapid rise in standard of living in India and China?

1. direction of capital to the creation of industrial equipment
2. direction of capital to automated, capital-intensive plants
3. direction of capital to increased production of food
4. modeling of their economies on those of advanced capitalist countries
5. increased investment in knowledge and skill

3. Capital-intensive plants are characteristic of countries where

1. All economic activity is planned and directed.
2. Economies are poor in capital.
3. The value of labor is very high.
4. The value of labor is low.
5. Capital is spread thinly and widely.

4. The major objective of this passage is:

1. to argue that developing countries should increase productivity per head
2. to compare industrial/agricultural policies of developing countries to those of the most advanced countries
3. to argue against overall planning and direction of all economic activity in developing countries
4. to advocate management of proportion between capital and labor in developing countries
5. to link increased standard of living with increased industrialization

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