A developing country can substantially increase its economic growth if its businesspeople are willing to invest in mo...

tomgbean on December 14, 2019


Please explain this passage and why each of the wrong answers are incorrect and the right answer is correct.

Create a free account to read and take part in forum discussions.

Already have an account? log in

BenMingov on December 17, 2019

Hi Tomgbean, thanks for the question!

This question is a Must Be True (most supported variant). We need to use the statements in the passage to find the answer choice that is best supported by said statements.

The passage can be broken down as follows:

Developing countries can substantially increase economic growth if their businesspeople invest in modern industries that are lacking in those countries. Investing first in an industry is risky. On top of it being risky, there also isn't much upside to being first even if it does work out, because let's say a businessperson does succeed in the new industry, then other people will compete and cut into the profits.

It isn't useful to try predicting these answers for must be true questions. This is because there are just so many different combinations of facts that they can use to reach whichever answer choice is correct, additionally, a correct answer choice can simply be a paraphrase of a statement in the passage.

Let's go through the answer choices. Note that answer choice C is correct.

A) This is a very far off base answer. Not supported in any way shape or form. Why would future investment in an industry not contribute to the economy's growth. This would only be true if the passage clearly states that this is the case, and it didn't.

B) There was no comparison between modern and traditional industries in developing countries.

C) 100%. We are told that developing countries' economies can grow if its businesspeople invest in new modern industries. However, too risky and no real incentive. But now if we give them incentive, that means that some businesspeople will invest in these new modern industries and it follows that these developing countries increase their prospects to experience economic growth.

D) This can be a tricky answer. The passage stated that businesspeople investing in new industries is "a" way for developing countries' economies to grow. But it never stated that it is the only way. This is an important distinction.

E) We do not know if it is risky or not to invest in an industry once at least one other business exists in that industry. All we know is that is risky to be first.

I hope this helps. Please let me know if you have any other questions.