According to a widely held economic hypothesis, imposing strict environmental regulations reduces economic growth. This hypothesis is undermined by th...

GMAT Critical Reasoning : (CR) Questions

Source: Official Guide

Critical Reasoning

Logically Completes

HARD

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According to a widely held economic hypothesis, imposing strict environmental regulations reduces economic growth. This hypothesis is undermined by the fact that the states with the strictest environmental regulations also have the highest economic growth. This fact does not show that environmental regulations promote growth, however, since ______.

Which of the following, if true, provides evidence that most logically completes the argument below?

those states with the strictest environmental regulations invest the most in education and job training

even those states that have only moderately strict environmental regulations have higher growth than those with the least-strict regulations

many states that are experiencing reduced economic growth are considering weakening their environmental regulations

after introducing stricter environmental regulations, many states experienced increased economic growth

even those states with very weak environmental regulations have experienced at least some growth

Solution

Passage Analysis:

Text from Passage	Analysis
According to a widely held economic hypothesis, imposing strict environmental regulations reduces economic growth.	What it says: There's a common theory that strict environmental rules hurt economic growth What it does: Sets up the main theory we'll be examining What it is: Widely accepted economic hypothesis
This hypothesis is undermined by the fact that the states with the strictest environmental regulations also have the highest economic growth.	What it says: Real-world data shows states with toughest environmental rules actually have the best economic growth What it does: Challenges the hypothesis with contradictory evidence What it is: Factual observation that contradicts the theory Visualization: Theory says: \(\mathrm{Strict\ Rules} \rightarrow \mathrm{Low\ Growth}\), but Reality shows: \(\mathrm{Strict\ Rules} \rightarrow \mathrm{High\ Growth}\)
This fact does not show that environmental regulations promote growth, however, since ______.	What it says: Just because strict states have high growth doesn't mean the regulations caused the growth What it does: Warns against making a causal conclusion and sets up the need for an alternative explanation What it is: Author's logical clarification

Argument Flow:

The argument starts with a widely held theory, then presents contradictory evidence, but warns us not to jump to the opposite conclusion. We need to find a reason why the correlation doesn't prove causation.

Main Conclusion:

The fact that states with strict environmental regulations have high economic growth doesn't prove that environmental regulations cause economic growth.

Logical Structure:

The argument uses a classic correlation vs. causation structure. It shows that while the original hypothesis might be wrong, we can't automatically assume the reverse is true without considering alternative explanations for why strict regulation states also have high growth.

Prethinking:

Question type:

Logically Completes - We need to find a statement that explains why the correlation between strict environmental regulations and high economic growth doesn't prove causation (that regulations promote growth)

Precision of Claims

The key claims are about correlation vs causation - we know states with strictest regulations have highest growth (correlation), but we need to explain why this doesn't mean regulations cause growth

Strategy

We need to find alternative explanations for why states with strict environmental regulations also have high economic growth. The correct completion should provide a reason that explains this correlation without suggesting the regulations themselves cause the growth. We're looking for third factors, reverse causation, or other logical explanations that break the causal link.

Answer Choices Explained

those states with the strictest environmental regulations invest the most in education and job training

This provides an excellent alternative explanation for why these states have high economic growth. Instead of the environmental regulations causing the growth, it's likely that heavy investment in education and job training (well-known economic growth drivers) is the real cause. This perfectly explains the correlation without implying causation from regulations to growth.

even those states that have only moderately strict environmental regulations have higher growth than those with the least-strict regulations

This actually seems to support the idea that environmental regulations do promote growth by showing a pattern across different levels of regulation. This doesn't help explain why the correlation doesn't prove causation - it actually strengthens the causal argument.

many states that are experiencing reduced economic growth are considering weakening their environmental regulations

This tells us what some states are thinking about doing, but it doesn't explain why the original correlation between strict regulations and high growth doesn't prove causation. It's about future intentions, not about explaining the existing relationship.

after introducing stricter environmental regulations, many states experienced increased economic growth

This actually supports the causal relationship by providing temporal evidence (regulations came first, then growth increased). This makes the causal argument stronger, not weaker, so it doesn't complete our argument correctly.

even those states with very weak environmental regulations have experienced at least some growth

This just tells us that all states grow to some extent regardless of their regulations. While this shows regulations aren't necessary for growth, it doesn't explain why the states with the strictest regulations specifically have the highest growth.

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