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Help appreciated PT84 S3 Q21

u______uu______u Core Member
edited September 2022 in Logical Reasoning 233 karma

Posting this again in the discussions to gain more traction because I'm really not understanding this one.

This question still doesn't sit right with me, and I find the explanations to be less than sufficient even after perusing the comments. The stimulus provides us with this condition: to produce the rankings of how easy it is to do business within a country, the World Bank assesses how difficult it is for a hypothetical business to comply with regulations and pay taxes. However, we don't know what factors are in play when assessing the difficulty of compliance. The premise that follows provides a semblance of an answer to that by saying that the government has dramatically simplified tax filing for small and even midsized businesses, leading us to the assumption that simplifying tax filing lessens the difficulty of regulation compliance, therefore leading to another assumption that businesses will comply with regulations more if the simplification of tax filing reduces the difficulty of complying with regulations. I believe that's reasonable. The conclusion then says that the country's ranking will improve, further supporting that second assumption. With this line of thought, here is how I approached the questions.

A) Completely useless. Who cares about the rate at which new businesses are formed?
B) This directly plays off the assumption I made while reading the stimulus. If the simplification of tax filing decreased the difficulty of regulation compliance, then more businesses would comply with regulations. If the answer to the question B poses is no, then the minister's conclusion doesn't stand because the simplification didn't make it easier to comply with regulations. If the answer is yes, then the conclusion works.
C) We see this type of answer choice all the time. Who cares about other regulations? We're looking specifically at one type of effort that can be made to decrease the difficulty of regulation compliance. Even if tax filing was the most trivial of tasks, it would still lessen the difficulty of complying with regulations. Useless answer.
D) I don't understand why we need to care about the size of the business mentioned in the stimulus. Are small and midsized businesses not businesses? The conditions for assessment deal with hypothetical businesses. Small and midsized businesses are businesses so they should be included when considering businesses in general. I feel like you can use much of the same reasoning for answer choice C to get rid of D. Even if the midsized business was smaller than the hypothetical business, given that it still is a business, why can it not be used as a comparative point? Why does size matter at all in this scenario?
E) Useless.


  • KevinLuminateLSATKevinLuminateLSAT Alum Member
    955 karma

    I don't know if this take is one that you've seen in the video explanation or the comments, but I've always viewed this question as centered on the way that the ranking is done. The stimulus states that the World Bank "assesses how difficult it is for a hypothetical business to comply...". That's ambiguous, but I describe one way of looking at it below.

    The closest comparison that sticks out in my own experience are those power rankings that sports publications often produce before a new season begins. Consider this argument, which is meant to be similar, but not exactly parallel:

    Every October, issues a report ranking teams in the NBA on how likely they are to win the championship in the upcoming season. In producing the rankings, assesses quality of trades, free agency signings, coaching staff changes, and projected player development. Since the last set of rankings came out, our team has signed last year's MVP and last year's Rookie of the Year. So, our ranking will probably improve.

    Is the following issue relevant to the argument?

    "Is the team actually better than it was last year because of the signings?"

    I don't think so - whether they are actually better at basketball was not an input in the rankings.'s ranking was based on trades, free agency signings, coaching changes, and projected player development. They're trying to predict how good the team will be compared to other teams based on those factors, but the actual quality of the team is not something the ranking was evaluating. If you say, "Our team is actually a lot worse this year", that doesn't register to the rankings because on paper the team looks a lot better.

    Now let's go back to the World Bank problem. It doesn't say exactly what the ranking is based on, unlike the sample argument above, but it does say the World Bank "assesses how difficult it is for a hypothetical business to comply with regulations and pay taxes."

    Is this ranking about actual, realized, on-the-grounds difficulty in the sense of "Is the basketball team actually better?" Or is it about a more theoretical, hypothetical assessment of difficulty based on looking at the legal regulations of different countries? For example, I could say that since Country X requires a certified accountant to prepare a business's taxes, whereas Country Y does not, that means it's more difficult to pay taxes in X. Whether a higher % of businesses actually paid taxes compared to country Y is not relevant to that measure.

    For you to pick answer choice (B), you have to believe that the ranking is not being done in the theoretical, hypothetical sense. Let's say compliance with regulations has increased - I agree with you that this would be a reason to think that ease of compliance may have improved. But this would only impact the World Bank's ranking if rate of compliance were one of the factors they were evaluating in determining the difficulty of compliance. Remember, the conclusion is not about how how easy/difficult compliance is in our country compared to others. It's about whether our ranking will improve, which depends on how that ranking is done.

    For (D), if the kind of business that the minister had in mind was smaller than the hypothetical business used to produce the report, then that means the simplified laws the minister referred to are not necessarily relevant to how the rankings are done. The World Bank is ranking how difficult it is for Business Z to comply. If the laws the minister referred to do not apply to Business Z, then they give no reason to think that the country's ranking will improve.

  • u______uu______u Core Member
    233 karma

    Thank you for your response. That makes a lot of sense. It seems I was too in my head about how if the simplification of tax filing eased compliance led to increased compliance it would somehow be a factor in determining the rank because that would be a criteria. But, as you said, since we know nothing about the criteria, we can't say anything about what impact the simplification of taxes will have on the rankings. Also, now that you've explained answer choice D so succinctly like that, it's almost comically funny how obvious that should be. I can't believe that it was just a simple matter of whether what the finance minister says will even apply to the rankings.

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