Self-study
Finance minister: The World Bank's “Doing Business” report ranks countries in terms of ease of doing business in them. ██ █████████ ███ █████████ ███ █████ ████ ████████ ███ █████████ ██ ██ ███ █ ████████████ ████████ ██ ██████ ████ ███████████ ███ ███ ██████ █████ ███ ████ ████████ ███████████ ██████ ████ ████ ███ ██████████ ███ ████████████ ██████████ ███ ██████ ███ █████ ███ ████ ████████ ███████████ ██ ███ ████████ ███████████ ███████ ████ ████████ ████████
Summarize Argument
The finance minister introduces the “Doing Business” ranking, which is meant to show how easy it is to do business in a given country. She explains the standard used by the rankings: how difficult it is for a hypothetical business to comply with regulations and pay taxes. She then states that her country's government has simplified tax filing for small and midsized businesses since the last ranking, and concludes that therefore, her country's ranking will probably improve.
Points for Evaluation
The finance minister's first premise is the standard used by the rankings: the World Bank looks at how difficult it is for a hypothetical business to pay taxes and comply with regulations. Her next premise is what has changed in her country since the last rankings: her country has made it easier for small and midsized businesses to pay taxes. By concluding that her country's ranking will improve, the finance minister assumes that the second premise is actually relevant to the first one — that making it easier for small and midsized businesses to pay taxes counts as an improvement by the standard of the World Bank's rankings.
But notice that the rankings look at how easy it is for a "hypothetical business" to pay taxes and comply with regulations. We don't know how big that hypothetical business is, but the finance minister specifically tells us only about small and midsized businesses. If the World Bank's hypothetical business is a large business, then the changes the finance minister tells us about are completely irrelevant to her country's ranking. So to evaluate this argument, it would be useful to know the size of the hypothetical business the World Bank looks at.
Another point to notice is that, even if the World Bank's hypothetical business is small or midsized, the rankings don't just look at how easy it is to pay taxes. They also look at how easy it is to comply with regulations. So just knowing that it's easier for businesses to pay taxes wouldn't necessarily mean the finance minister's country had actually improved by the World Bank's standard, if other regulations had become more complicated in the meantime. To evaluate this argument, it would be useful to know if there were other changes to regulations that might balance out the changes to taxes, so we could assess the net effect of all the changes on the rankings.
One last point to notice is that the finance minister compares her country to itself at the time of the last rankings, while the rankings evaluate different countries compared to one another. Because a country's place in the rankings depends on how it compares to other countries in terms of ease of doing business, we can't reach a conclusion about the ranking of the finance minister's country without knowing anything about other countries. Even if the finance minister's country has made improvements to its policies, it's possible all the other countries in the world have made even more improvements, and so the finance minister's country could even go down in the rankings, despite the changes. Information about any changes in other countries' business-related policies would be useful in evaluating this argument.
21.
The answer to which one ██ ███ █████████ █████████ █████ ████ ████ ██ ██████████ ███ ███████ ██████████ █████████
a
If the finance ██████████ ███████ ████ ██ ██████ ███ █████ ██████████ ██ ██████ ████ ████████████ █████ ███ ████ ██ █████ ███ ██████████ ███ ██████ █████████
Irrelevant. The rate at which new businesses are formed doesn’t factor into the “Doing Business” ranking.
b
Has compliance with ███ ████ ██ █████ ███ ████████ ██████████ █████████ █████ ███ ██████ ███ ███████████
This answer choice is tricky because it raises the issue of actual compliance: tax laws may have been simplified, but do businesses actually comply with them or not? Though this may seem relevant to the ranking, remember that the ranking is based on a hypothetical business, not an actual one. Even if the simplified laws have genuinely made it easier to pay taxes, there could be plenty of reasons actual businesses still don't comply with tax laws — maybe business owners in that country aren't sufficiently educated, or just don't like paying taxes. But those factors are irrelevant to the World Bank's ranking, which just looks at whether the existing regulations allow a hypothetical business to comply more easily. More importantly, whether we answer this question "yes" or "no," we still don't know if the World Bank's "hypothetical business" is actually small or midsized. If the hypothetical business is a large business, then any information about small or midsized businesses is completely irrelevant to the rankings.
c
For small and ████████ ██████████ ██ ███ ███████ ██████████ ████████ ██ ███ ███████████ ███ ██████ ████ █████████ ████ █████████ ████ █████ ████████████
Irrelevant. Even if tax compliance is more difficult than complying with other regulations, the simplified tax filing could still have made filing taxes easier than it was before. Answering this question "yes" or "no" — i.e., knowing whether tax filing is more or less difficult than complying with other current regulations — doesn't tell us whether or not there has been a net improvement over time in how easy it is for businesses both to file taxes and comply with regulations, which is what the World Bank is looking for. Answering this question also wouldn't help us determine whether or not small or mid-sized businesses are even relevant to the rankings, which are based on a "hypothetical business" whose size is not specified.
d
Is what the ███████ ████████ █████████ ██ ██ █ ████████ ████████ ███████ ████ ███ ████████████ ████████ ████ ██ ███████ ███ ████████ ███████████ ███████
This is useful for evaluating the argument. If the answer is “yes,” then we don't know if tax filing has changed for a business the size of the World Bank’s hypothetical business, since the finance minister hasn't said anything about large businesses. Thus, the finance minister's reasoning, which only talks about tax filing for small and mid-sized businesses, doesn't support her prediction that her country's rankings will improve, and her argument is weakened. If “no,” then even though we don't know about changes to other regulations, we at least know for sure that one aspect of "ease of business" — tax filing — has improved for businesses the size of the World Bank's hypothetical business. This lends some support to the minister's prediction that the country's ranking will improve.
e
Was the finance ████████ ██ ██████ ████ ███ ████ ████████ ███████████ ██████ ███ ███████
Irrelevant. Whether or not the finance minister was in office at the time of the last ranking has no connection to whether her country’s “Doing Business” ranking will improve based on the simplified tax system.