The federal government faces a crisis in the way it collects, analyzes, and disseminates information. Paradoxically, at the very moment...
GMAT Reading Comprehension : (RC) Questions
The federal government faces a crisis in the way it collects, analyzes, and disseminates information. Paradoxically, at the very moment new information technologies are transforming the United States economy, we are forced to analyze that economy on the basis of data that are often outright misleading. Government statistics arc only as good as the assumptions shaping the collection and analysis of data. A classic example of a decades-old faulty assumption concerns how the national accounts define government investment.
In private industry, standard accounting practice divides a firm's outlays into long-term investment in new plants and equipment and short-term current expenses—wages, salaries, and the cost of supplies. National statistics honor this distinction for private-sector businesses but not for government spending. Thus, money spent on highways—roughly 10 percent of all spending by state and local governments—is not counted as an investment, even though those highways will probably last many years. This curious practice creates problems in tracking spending in the economy. Because government investments are excluded by definition, figures on net investment are regularly underestimated. And no provision is made to cover the depredation of crumbling roads, sewers, and schools. Finally and perhaps most important, the government's growing role as art investor in the nation's infrastructure is obscured; thus, government spending appears to be unnecessary or even profligate.
Other assumptions were reasonable when they were first made but have become obsolete as a result of economic change. Consider how we treat both public and private spending on education and training, which amounts to roughly S300-S500 billion each year—more than the net private purchases of equipment like machine tools and computers. As the economy becomes more complex and advanced technologies play a more central role, education and training begin to represent a crucial investment. Yet government statistics treat spending on the intellectual capabilities of the work force no differently from spending on paper clips. The data suggest that a company is investing if it purchases a new machine, but not if it pays for the employee training needed to use that machine efficiently.
The passage is primarily concerned with
1. Passage Analysis:
Progressive Passage Analysis
| Text from Passage | Analysis |
|---|---|
| The federal government faces a crisis in the way it collects, analyzes, and disseminates information. | What it says: The government has a major problem with how it gathers, studies, and shares information. What it does: Opens with a strong claim that sets up the entire passage's main topic Source/Type: Author's opinion/assertion Connection to Previous Sentences: First sentence - establishes the foundation Visualization: Government Information Process: Collect → Analyze → Share (all three steps are broken) Reading Strategy Insight: This is the main thesis - everything else will support this crisis claim |
2. Passage Summary:
Author's Purpose:
To explain how flawed assumptions in government data collection create misleading economic statistics that distort our understanding of the economy.
Summary of Passage Structure:
The author builds their argument in clear steps:
- First, the author claims there's a crisis in how the government handles information, especially during a time when technology is rapidly changing the economy.
- Next, the author explains that bad assumptions lead to bad data and promises to show specific examples of these flawed assumptions.
- Then, the author provides two detailed examples: highway spending that should count as investment but doesn't, and education spending that used to be reasonably treated as an expense but should now be considered investment.
- Finally, the author shows how both examples demonstrate the same problem - important government investments are either ignored or misclassified, leading to distorted economic data.
Main Point:
Government statistics give us a false picture of the economy because they're based on outdated assumptions that fail to properly account for government investments like highways and education, making government spending appear wasteful when it's actually crucial investment.
Why It's Wrong:
• The passage presents a problem (crisis in government data) but offers no resolution or attempt to solve the contradiction
• The author identifies flawed assumptions but doesn't reconcile them - instead shows how they create ongoing problems
• The examples (highways, education) illustrate problems without resolving them
Why It's Wrong:
• While the passage compares private vs. government accounting practices, comparison is not the primary purpose
• The comparisons serve as evidence to support the larger assertion about the crisis
• Drawing comparisons is a technique used within the passage, not its main goal
Why It's Right:
• The author makes a clear assertion in the opening: government faces a crisis in information handling
• The entire passage systematically provides evidence (highway example, education example) to prove this assertion
• Every paragraph either states the assertion, explains why it matters, or provides supporting evidence
• The structure follows classic argumentative pattern: claim → explanation → evidence → evidence
Why It's Wrong:
• The passage doesn't walk through any systematic procedure or process
• While it mentions data collection and analysis, it criticizes these procedures rather than explaining how they work
• The focus is on problems with current methods, not instruction on proper procedures
Why It's Wrong:
• The passage identifies problems but offers no solutions or recommendations
• The author diagnoses the crisis and explains its causes but doesn't suggest fixes
• The tone is analytical and critical, not prescriptive or solution-oriented