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Logical Analogy - Counter-intuitive Results

XAT 2012 · Verbal Ability & Logical Reasoning · Hard · Critical Reasoning

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When income tax rates are reduced, there is an increase in taxable income, and an increase in taxable income results in increased total income tax revenues for the government. Which of the following is analogues to the argument above in terms of its logical features?

  1. A.

    If the city municipal corporation increases taxes on property by 1% it will raise tax revenues, which can be used for garbage disposal management.

  2. B.

    The Leader of the Opposition at the Parliament argued that a restriction on the import of Chinese manufacturing products will increase the sales of Indian manufacturing products.

  3. C.

    An advertisement using more than 25 words of text will not be read, and when an advertisement is not read, the product is not sold. Therefore, the fewer words an advertisement has, the more effective it will be in promoting its product.

  4. D.

    The balance of payment of a country will improve if the country reduces its imports and increases exports.

  5. E.

    Citizens earning more than 15 lakh rupees per annum pay at an increased tax rate of 40% Citizens earning less than 1 lakh rupees per annum can be exempted from paying income taxes without decreasing the revenues of the Income Tax Department

Answer

C

Explanation

The original argument presents a counter-intuitive principle: reducing a parameter (tax rate) leads to an increase in the desired end goal (tax revenue) through an intermediate mechanism. Option C parallels this logic: reducing text (fewer words) leads to higher effectiveness (product sold).

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