Reasoning - Logical Reasoning:

Logical Reasoning

MCQ - 184-8136

If we reduce the tax on capital gains on the sale of stocks, investors who have capital gains will sell their stocks and the result will be a much higher amount of taxable capital gains. Stock brokers will earn more, so income tax revenues will increase. Both the government and the taxpayer will be better off.

Question:

This argument is based on which of the following assumptions?

The increased income from capital gains taxes will be equal to or greater than deductions for capital losses
There will be a rise in the prices of stocks producing capital gains
Only a small percentage of the nation’s taxpayers will be affected by a reduction in taxes on capital gains
There will be a rise in the prices of stocks producing capital gains
Investors are reluctant to sell stocks because of the tax on capital gains

Correct Answer: E

Explanation:

The argument of the passage is that lower capital gains taxes will increase the sale of stocks on which investors have realized capital gains. The assumption here is that these investors are not taking profits now because of the tax on capital gains.

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243 MCQ for effective preparation of the test of Logical Reasoning of Logical Reasoning section.

Read the MCQ statement: This argument is based on which of the following assumptions? , keenly and apply the method you have learn through the video lessons for Logical Reasoning to give the answer. Record your answer and check its correct answer and video explanation for MCQ No. 184-8136.

How to Answer

Solve the question for MCQ No. and decide which option (A through D/E) is the best choice to answer the MCQ, then click/tap the blue button to view the correct answer and it explanation.

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