GMAT Questions 2013
GMAT Questions 2013
Question3:CriticalReasoning Businessesaresufferingbecauseofalackofmoneyavailablefordevelopmentloans.Tohelp businesses,thegovernmentplanstomodifytheincometaxstructureinordertoinduceindividual taxpayerstoputalargerportionoftheirincomesintoretirementsavingsaccounts,becauseasmore moneyisdepositedinsuchaccounts,moremoneybecomesavailabletoborrowers. Whichofthefollowing,iftrue,raisesthemostseriousdoubtregardingtheeffectivenessofthe governmentsplantoincreasetheamountofmoneyavailablefordevelopmentloansfor businesses? (A).Whenlevelsofpersonalretirementsavingsincrease,consumerborrowingalwaysincreases correspondingly. (B).Theincreasedtaxrevenuethegovernmentwouldreceiveasaresultofbusinessexpansion wouldnotoffsetthelossinrevenuefrompersonalincometaxesduringthefirstyearoftheplan. (C).Evenwithtaxincentives,somepeoplewillchoosenottoincreasetheirlevelsofretirement savings. (D).Bankersgenerallywillnotcontinuetolendmoneytobusinesseswhoseprospectiveearningsare insufficienttomeettheirloanrepaymentschedules. (E).Themodifiedtaxstructurewouldgivealltaxpayers,regardlessoftheirincomes,thesametax savingsforagivenincreaseintheirretirementsavings.