GMAT Reading Comprehension

Home > GMAT Test > GMAT Reading Comprehension Questions

Next steps

Source: OG12th

Level: 3

During the 1960s and 1970s, the primary economic development strategy of local governments in the United States was to attract manufacturing industries. Unfortunately, this strategy was usually implemented at another community’s expense: many manufacturing facilities were lured away from their moorings elsewhere through tax incentives and slick promotional efforts. Through the transfer of jobs and related revenues that resulted from this practice, one town’s triumph could become another town’s tragedy.

In the 1980s the strategy shifted from this zero-sum game to one called "high-technology development," in which local governments competed to attract newly formed high-technology manufacturing firms. Although this approach was preferable to victimizing other geographical areas by taking their jobs, it also had its shortcomings: high-tech manufacturing firms employ only a specially trained fraction of the manufacturing workforce, and there simply are not enough high-tech firms to satisfy all geographic areas.

Recently, local governments have increasingly come to recognize the advantages of yet a third strategy: the promotion of homegrown small businesses. Small indigenous businesses are created by a nearly ubiquitous resource, local entrepreneurs. With roots in their communities, these individuals are less likely to be enticed away by incentives offered by another community. Indigenous industry and talent are kept at home, creating an environment that both provides jobs and fosters further entrepreneurship.

Question List: 1 2 3 4 5

The primary purpose of the passage is to

  • A advocate more effective strategies for encouraging the development of high technology enterprises in the United States
  • B contrast the incentives for economic development offered by local governments with those offered by the private sector
  • C acknowledge and counter adverse criticism of programs being used to stimulate local economic development
  • D define and explore promotional efforts used by local governments to attract new industry
  • E review and evaluate strategies and programs that have been used to stimulate economic development

Show Answer

Previous       Next