CAT Questions | CAT Critical Reasoning Questions

The question is from CAT Critical Reasoning. Critical Reasoning for Verbal Ability for CAT. Critical Reasoning questions that appear in the verbal section of CAT test Reading Ability, Comprehension and Reasoning. Have a look at this question from Critical Reasoning. Solve CAT Questions from Critical Reasoning to get more practice and 2IIMs CAT questions bank provides you with CAT questions that can help you gear for CAT Exam .

Question 2: A study published in 2006 by Friedrich Schneider on the world’s shadow economies dealt briefly with the “tax morality� of Germans. According to the study, two-thirds of the Germans surveyed regarded tax evasion as a “trivial offence,� while only one-third judged stealing a newspaper this way. Indian tax morality is similar, but it makes a distinction between expatriate illicit money, which is viewed as a serious crime perpetrated by the very corrupt, and money held within India, which is perceived as a practical measure.

Which of the following conclusions can be drawn from the above?
(i) Two-thirds of the Germans evade tax and consider it only a trivial offence.
(ii) Stealing a newspaper is a bigger crime in Germany than tax evasion.
(iii) As long as the money is held in India, illicit money is accepted as practical by Indians.
(iv) Indians regard tax evasion, especially holding illicit money abroad, as a serious crime.

1. i, ii, iv
2. i and iv
3. only iii
4. iii and iv

Explanatory Answer

Method of solving this CAT Question from Critical Reasoning:

Let’s consider each of the options given in order.

i. Two-thirds of the Germans evade tax and consider it only a trivial offence.

The given paragraph only tells us that two-thirds of the Germans surveyed regarded tax evasion as a trivial offence. It does not imply that two-thirds of the Germans actually evade tax. This statement is hence incorrect.

ii. Stealing a newspaper is a bigger crime in Germany than tax evasion.

Clearly, this is false. Stealing a newspaper is not a “bigger crime� in Germany. Whilst two-thirds of the Germans surveyed considered tax evasion as a trivial offence, only one-third thought that stealing a newspaper was a trivial offence.

iii. As long as the money is held in India, illicit money is accepted as practical by Indians.

The paragraph given states that tax- evaded money held within India is accepted as practical. This statement is hence true.

iv. Indians regard tax evasion, especially holding illicit money abroad, as a serious crime.

It is clear from the paragraph that holding illicit money abroad is thought to be a serious crime in India.

However, the paragraph starts by discussing “tax morality� and the German view of it as a trivial offence. It further states that Indian tax morality is similar but makes a distinction based on where the illicit money is held. This implies that Indians generally regard tax evasion as a trivial offence too, as long as the illicit money is held in India. Tax evasion is considered a serious crime only when expatriate illicit money is held abroad. Hence statement iv is also incorrect.

So, the only conclusion of the given ones that can be drawn from the paragraph is iii.

The question is "Which of the following conclusions can be drawn from the above?"
The option is C

Hence, the answer is C

Choice C is the correct answer.