Question # 1

During the incumbent president's term of office he succeeded in limiting annual increases in the defense budget by an average of 5 percent. His predecessors experienced annual increases of 8 percent. Therefore, the incumbent president should be given credit for the downturn in defense outlays.

Which of the following statements, if true would most seriously weaken the above conclusion ?

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Some generals have claimed that the country's defense has weakened in the past year.

More soldiers were drafted during the former president's term of office.

The incumbent president advocates peaceful resolution of international disputes.

The average annual inflation rate during the incumbent president's term was 4 percent, while during his predecessor's term it was 10 percent

A disarmament treaty with a major adversary was signed by the incumbent president.

Inflation rose by 5.1 % over the second quarter, up form 4.1 % during the first quarter of the year and higher than the 3.3% record during the same time last year. However, the higher price index did not seem to alarm Wall street, as stock prices remained steady.

Which of the following, if true, could explain the reaction of Wall Street ?

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Stock prices were steady because of a fear that inflation would continue.

The President announced that he was concerned about rising inflation.

Economists warned that inflation would persist.

Much of the quarterly increase in the price level was due to a summer droughts effect on food prices.

Contrary to charges made by opponents of the new trade bill, the bill's provisions for taking action against foreign countries that place barriers against American exports, is justified. Opponents should take not that restrictive trade legislation in the 1930s succeeded in improving the U.S. trade balance even though economists were against it.

The author's method of rebutting opponents of the new trade bill is to

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attack the patriotism of its opponents.

attack the opponents characters rather than their claims.

imply an analogy between the new trade bill and previous trade legislation.

suggest that economists were against both pieces, of legislation.

imply that previous legislation also permitted retaliatory action against foreign countries.

In winning its bitter, protracted battle to acquire Blue Industries, Inc., Belle industries has fulfilled its goal to lessen its reliance on tobacco holdings, while the $5.2 billion deal may spur more takeover activity in the insurance industry, analysts said.

Which of the following can be inferred from the passage?

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Blue Industries is in the tobacco industry.

Belle industries is in the insurance business.

Blue Industries is in the insurance business.

More divestment takes place in the tobacco industry than in the insurance industry.

More divestment takes place in the insurance industry than in the tobacco industry.

Opponents of the new legislation could defend themselves against the author's strategy by arguing that:

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the fact that past trade legislation improved the trade balance does not mean that the present bill will do the same.

economists are not always right.

the united states had a trade deficit both in the 1930s and at the time of the new bill.

the new law is not as strong as the 1930s bill.

America's trading partners have also passed similar legislation.

An economist was quoted as saying that the Consumer Price Index (CPI) will go up next month because of a recent increase in the price of fruit and vegetables.

Which of the following cannot be inferred from the statement ?

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The cost of fruits and vegetables has risen sharply.

Consumers have decreased their consumption of fruits and vegetables.

The cost of fruit and vegetables is a major item in the CPI.

Food cost changes are reflected quickly in the CPI.

Other items that make up the CPI have not significantly decreased in price.

Ever since I arrived at the college last week, I ve been shocked by the poor behavior of students and the unfriendly attitude of the towns-people, but the professors are very erudite and genuinely helpful. Still, I wonder if i should have come here in the first place.

Which of the following, if true, would weaken the above conclusion ?

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Professors are not always helpful to students.

The college numbers over 50,000 students.

The college is far from the student's home.

Not all professors have doctorates.

The narrator was unsure of staying at the college.

In the human body, platelets, promote blood clotting by clumping together. Aspirin has been found to prevent clotting by making platelets less sticky. Research has now shown that heart attacks and strokes caused by blood clots could be avoided by taking one aspirin a day. Statistics show that the incidence of second heart attacks

Unfortunately, the drug has several unpleasant side effects, including nausea, gastric bleeding, and, in severe cases, shock. In children, it has been linked to Reye Syndrome, a rare, but occasionally fatal, childhood illness.

One balance, however, for men aged 40 and over, an aspirin a day may present an excellent prophylactic measure for a disease that affects 1.5 million Americans yearly and claims the lives of about 540,000.

Which of the following conclusions can most properly be drawn from the information above ?

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All people should take an aspirin a day to prevent heart attacks.

Painkillers prevent heart attacks.

Smokers can safely continue smoking, provided that they take at least one aspirin a day.

The majority of people suffering second subsequent cardiac arrests could have been saved by taking an aspirin a day.

Aspirin can be used to reduced mortality rates who have already suffered heart attacks.

The movement to ownership by unions is the latest step in the progression form management ownership to employee ownership. Employee ownership can save depressed and losing companies. All the following statements, if true, provide support for the claim above except:

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Employee-owned companies generally have higher productivity.

Employee participation in management raises morale.

Employee union ownership drives up salaries and wages.

Employee union ownership enables workers to share in the profits.

Employee union ownership makes it easier to layoff redundant workers.

The states of New York, Ohio, Pennsylvania, and California provide extensive free higher education to their residents. Threes states are representative of different geographic areas of the united states. There is little reason why most states cannot provide the same service to their residents.

Which of the following, it true, would weaken the above argument ?

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Free education is not guaranteed by the constitution.

New York, Ohio, Pennsylvania, and California have more qualified high school graduates than other states.

Most other states do not have the tax base that new york, ohio, Pennsylvania, and California have.

Other states do not have as many high school graduates.

Quality education cannot be free; it must be paid for

Most large retail stores hold sales in the month of January. The original idea of price reduction campaigns in January became popular when it was realized that sales or products would generally slow down following the Christmas rush, were it no for some incentive. The lack of demand could be solved by the simple solution of reducing prices.

There is now an increasing tendency among major department stores in large urban centers to have their January sales being before Christmas, some time before the end of the calendar year. The idea behind this trend is to endeavor to sell the maximum amount of stock at a profit, even if that may not be at the maximum profit.

Which of the following conclusions cannot be drawn from the above ?

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The incidence of early January sales results in the lower holdings of stocks with the corollary of lower stock holding costs.

Demand is a function of price; as you lower price, demand increases.

Major stores seem to think it makes sense to have to January sales campaigns pre-Christmas.

It is becoming less popular to star the January sales in the New Year.

The major department stores do not worry as much about profit maximization as they do about sales maximization.

Buy Plenty, a supermarket chain, had successfully implemented an in store promotional campaign based on video messages dashed on a large screen. The purpose of the campaign was to motivate customers to purchase products which they had not planned to buy before they entered to store. The sales manager of Build-It Inc., a chain of do-it-yourself hardware stores, saw the campaign and plans to introduce it in Build-It locations.

The sales manager's plan assumes that

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supermarket and hardware products are the same

products cannot be sold successfully without a video sales campaign

Supermarket chains do not sell hardware products

consumer decision making to buy products does not differ substantially when it comes to both supermarket and hardware products

in-store campaigns are more effective than out-of-store advertising and sales promotion

Professor Akram told his class that the method of student evaluation of teachers is not a valid measure of teaching quality. Students should fill out questionnaires at the end of the semester when courses have been completed.

Which of the following, if true, provides support for Professor Akram proposal ?

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Professor Akram received low ratings from his students.

Students filled out questionnaires after the midterm exam.

Students are interested in teacher evaluation.

Teacher are not obligated to use the survey results.

Student evaluation of teachers is voluntary.

In a world of many trading countries, the trade between two countries need not be balanced for the trade of each to be in global balance. Differing demands and productive capabilities among countries will cause a specific country to have trade deficits with some countries and surpluses with other countries.

Which of the following conclusions best summarizes the passage above ?

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A country trade will always be in balance even though it runs a deficit with a single country.

A country trade deficits and surpluses with other countries always balance out.

A country global trade balance is a sign of strength or weakness.

Countries should not be concerned if they have trade deficits because they will balance out in the long run.

A country global trade balance is determined by relative remand and productive capabilities.

Many countries are facing a potential crisis in 20 to 30 years time. The ratio of pensioners to workers will be changing drastically with a declining birth rate, with more lengthy education of the young, and with a reduced working life. In general, the number of people paying into pension schemes is decreasing all the time. Meanwhile, with increased health care and living standards, more people are living long enough to draw their pension funds.

A controversial solution to this problem has been proposed in Germany-changing the age of retirement, for both men and women, from the current qualifying age of 63 for men and 60 for women.

A radical, but socially acceptable, solution to this problem must be found. If this is not done, it is predicted that by the year 2050, one person in three will be 65 or over and the projected work force will be unable to support pensions.

Assuming the following were all socially acceptable, which one would not improve the situation in the future ?

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Lower the retirement age.

Decrease the school-leaving age.

Impose larger contributions on employees and employers.

Cut pensions in half.

Only give state pensions to retired persons whose income in below a certain level.

Typically, the entrepreneur is seen as an individual who owns and operates a small business. But, simply to own and operate a small business-or even a big business-does not make someone an entrepreneur. If this person is a true entrepreneur, then new products are being created, new ways of providing services are being implemented.

Which of the following conclusions can best be drawn from the above passage?

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An owner of large business may be an entrepreneur.

Someone who develops an enterprise may be considered an entrepreneur.

Entrepreneurs do not own and operate small businesses.

Entrepreneurs are the main actors in economic growth

Entrepreneurs are inventors.

The Monopoly is characterized by absence of or decline in competition. The ABC Company realizes that its operations are in competitive industries.

Which of the following conclusions may be inferred form the above ?

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ABC market is not monopolistic.

Monopoly is defined as one seller in a market.

The ABC Company has no domestic competitors.

The ABC company is publicly owned.

The ABC Company is in a service industry.

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