PT149.S4.Q16 > Question

SECTION 1 · lr

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SECTION 2 · rc

PASSAGE 1

Question 1 Question 2 Question 3 Question 4 Question 5

PASSAGE 2

Question 6 Question 7 Question 8 Question 9 Question 10 Question 11 Question 12

PASSAGE 3

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PASSAGE 4

Question 21 Question 22 Question 23 Question 24 Question 25 Question 26 Question 27

SECTION 3 · lr

SECTION 4 · lr

Many countries primarily rely on income tax to support government spending. Income taxation does not promote savings and investment. In contrast, a consumption tax would encourage savings. In these countries, the biggest challenge is improving their economies. The only way to accomplish this is to increase their savings rates.

Hence, many countries should focus more on taxing consumption as opposed to income.

This answer is unsupported. First, the economist discusses "many" countries, not "most." Second, we don't know if governments even tax savings and investment to begin with.

This answer is unsupported. The economist presents increasing savings as a necessary condition for economic improvement, not as sufficient.

This answer is unsupported. We have no idea how much money a consumption tax would bring in, nor how much money countries need.

This answer is strongly supported. Economic improvement is the "most important" goal for many countries, so we can infer that they should pursue that goal. More savings is necessary for improvement, and taxing consumption encourages savings.

This answer is unsupported. First, the economist never indicates that income taxation is actively detrimental. Second, "any" country is way too strong.

PrepTest 149 - Section 4 - Question 16

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