Logical reasoning PrepTest 150 · Section 3 · Question 21

Incorrect. The ranking has to do with ease of doing business, not new business formation. This answer choice is out of scope.

Incorrect. This answer is conflating compliance with tax laws and ease of paying taxes. There could be a tax system set up that's easy to pay but hard to calculate, or easy to calculate but hard to pay.

Incorrect. The relative ease of these different regulations in a single country isn't the important metric. The important metric is the relative ease between countries.

Correct. Argument or Facts:
Argument

Valid or Flawed:
Flawed

Question Type:
Argument Evaluation

Stimulus Summary:
The World Bank ranks countries based on ease of a hypothetical business doing business there. A given country has made it easier for small and mid-sized businesses to do business there, so their ranking will improve.

Answer Anticipation:
The criteria for the ranking involves a hypothetical business. There's no indication what is true of this hypothetical business, so the minister's assertion that they've improved the situation for certain businesses doesn't necessarily help this ranking. We need to know if the businesses talked about by the minister align with the hypothetical business the World Bank uses in assessing their Doing Business rating.

Answer Explanation:
If the businesses discussed by the minister don't match up with the hypothetical one considered by the ranking, then there's reason to question the conclusion. If it does match up with that business, then the conclusion is looking better. This is the answer.

Key Takeaway:
This stimulus has a study, of a type, done, and so a sampling error should be considered. Here, the potential mismatch between the hypothetical business and the businesses discussed by the finance minister led to the correct answer.

Incorrect. The finance minister's tenure is completely irrelevant to the ranking.