GMAT Critical Reasoning

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Source: Princeton

Level: 3

Cutting taxes is often viewed as a way to speed economic development. However, cutting taxes means that the government collects less revenue and, since the government is a major spender in the economy, less money will be spent in the economy. This results in low economic growth, and those arguing to cut taxes as a means to stimulate the economy are wrong.

In the above argument, the bold phrase plays which of the following roles?

  • A It states one of the argument's premises, that reducing taxes causes low economic growth.
  • B It states the argument's conclusion, that lowering taxes results in poor economic performance and therefore those arguing for such a policy are wrong.
  • C It presents information to counter the expected claims of critics.
  • D It presents one of the argument's premises, arguing that lower taxes result in lower government revenues and, in turn, lower government spending.
  • E It presents the argument's conclusion, that lowering taxes stimulates growth in the economy by making more money available for businesses.

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