GMAT Critical Reasoning

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Source: Knewton

Level: 3

The automobile industry in Country A argues that, because foreign automakers underpay workers and get nationally subsidized materials, they can offer artificially low prices. Thus, the industry argues, the current 8 percent tariff on imported products should be increased for automobiles. However, other industries in Country A remain healthy despite competition with imported products without exceptional tariffs. This fact indicates an increased automobile tariff is unnecessary.

Which of the following, if true, most strongly supports the argument of Country A's automobile industry against the challenge made above?

  • A In some industries—such as childcare, scientific equipment, and higher education—consumers care far more about the quality of the product than the price.
  • B Many governments support automobile exports so strongly that they would be willing to increase subsidies to offset any additional costs that are a result of exports.
  • C There are several industries for which the ratio of workers' wages in Country A to the workers' wages in other countries is even higher than it is in the automobile industry.
  • D Because of a scarcity of mineral and metal resources, Country A's automobile industry has to import, and pay tariffs on, most mineral or metal materials used to produce automobiles.
  • E No industries in Country A other than the automobile industry, including those whose raw materials are highly taxed, have asked for an increase of the 8% tariff.

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