Read the following statement carefully and identify the inference that follows.
Statement: The government has announced a new tax policy that will increase taxes on luxury goods.
Inference:
I. The government wants to discourage people from buying luxury goods.
II. The government wants to generate more revenue through taxes.
III. The government is trying to address income inequality by targeting luxury goods.
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2: If only II follows.
Why it follows:
- Inference II follows: The fundamental purpose of increasing any tax rate is to collect more money. Therefore, stating that the government wants to generate more revenue is a direct and logical deduction from 'increasing taxes.'
Why the others do not follow:
- Inference I does not follow: An increase in luxury tax does not automatically mean the goal is to stop people from buying luxury items; those who can afford them will often continue to buy them regardless.
- Inference III does not follow: While targeting luxury goods can be a method used to address income inequality, assuming this specific social motive goes beyond the direct facts provided in the short statement.