PrepTest 141, Section 2, Question 23
A developing country can substantially increase its economic(61 more words not shown)
The statements above, if true,(9 more words not shown)
- AOnce a developing(23 more words not shown)
- BIn developing countries,(11 more words not shown)
- CA developing country(23 more words not shown)
- DA developing country(12 more words not shown)
- EInvestments in a(23 more words not shown)
Reading the argument
Who wants to go first?
If the new business fails, the pioneer bears the loss. If it succeeds, competitors pile in and cut into the pioneer's profits. Success still offers a possible reward, but that reward may not make the initial risk attractive. I can see why businesspeople might wait on the sidelines for someone else to try it.
That's a problem for the country, because investment in these new industries could substantially increase growth. It's one route to growth, not necessarily the only route. Improving an existing industry might help too; the passage doesn't rule that out.
What we’re looking for
For the most-supported statement, my first prediction is that investment in untried industries may be slow to start. The people who could start it don't have much incentive to take the risk. Let's see what the choices draw from that problem.
Working the answers
- A
We aren't told that growth stops benefiting from investment after the first business appears. Competitors may reduce the first business's profits while still contributing to the country's economy. A confuses the pioneer's shrinking share of profits with a claim that further investment creates no economic growth.
- B
We know that success brings competition in the new industry. We aren't told how that competition compares with competition in traditional industries. Those industries might be more competitive, less competitive, or similar. B needs a comparison the passage doesn't supply.
- CCorrect
This suggests a response to the problem rather than merely describing businesspeople's hesitation. If insufficient incentive keeps them from making an investment that could produce growth, additional incentive could improve the country's prospects for growth. It doesn't guarantee that every business will succeed. It addresses the obstacle the passage identifies, which is why this new proposal is supported even though it wasn't my initial prediction.
- D
The passage gives one way to increase growth, not a requirement for any growth at all. A country might improve its existing industries or have some other source of growth. D turns the promising route described into the only possible route.
- E
Another business's existence doesn't make investment low-risk. That business might not even have succeeded, and the passage says competitors can cut into profits once success attracts them. Learning from an earlier business could reduce uncertainty without making the remaining risk small. E promises more than the evidence provides.
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