PrepTest 149

Incorrect. The stimulus only discusses taxing income and consumption, not savings and investments, so this answer is out of scope.

Incorrect. The stimulus establishes increasing savings rates as necessary for economic growth, not sufficient for rapid economic improvement.

Incorrect. The argument never talks about needing a tax to completely cover expenditures—in fact, it notes that countries currently rely "primarily" on taxing income, not exclusively.

Correct. Argument or Facts:
Facts

Question Type:
Argument Completion

Stimulus Summary:
Taxing income doesn't promote saving/investment, but taxing consumption does. Increasing savings is necessary in improving the economy, the most important challenge in countries, so __________.

Answer Anticipation:
This stimulus compares two possible things to tax—income or consumption. The latter, and not the former, improves saving, which is set up as important to solving the most important challenge in countries (economic improvement). Since taxing consumption addresses the most important challenge, and taxing income doesn't, this argument is building towards a conclusion that these countries should tax consumption instead of income.

Answer Explanation:
This answer choice completes the argument by recommending a course of action (taxing consumption) established as better helping to achieve the most important goal (improving the economy by encouraging savings/investment) of countries over the current course of action (taxing income).

Key Takeaway:
One of the two most common forms that Argument Completion questions will take is presenting two options being considered. When that's the case, the conclusion that you're expected to fill in will frequently pick one over the other, based on the information provided.

Incorrect. There's a difference between "doing nothing" to advance a specific goal and being "detrimental" to that goal. Additionally, this answer choice doesn't discuss taxing consumption at all, which was a key element of the stimulus.