SECTION 5 TIME—25 MINUTES 16 QUESTIONS DIRECTIONS

16.

Which of the following, if true, is the most logical

completion of the argument below?

The tax system of the Republic of Grootland

encourages borrowing by granting its taxpayers tax

relief for interest paid on loans. The system also

discourages saving by taxing any interest earned on

savings. Nevertheless, it is clear that Grootland's tax

system does not consistently favor borrowing over

saving, for if it did, there would be no ---.

(A) tax relief in Grootland for those portions of a

taxpayer's income, if any, that are set aside to

increase that taxpayer's total savings

(B) tax relief in Grootland for the processing fees that

taxpayers pay to lending institutions when

obtaining certain kinds of loans

(C) tax relief in Grootland for interest that taxpayers

are charged on the unpaid balance in credit card

accounts

(D) taxes due in Grootland on the cash value of gifts

received by taxpayers from banks trying to

encourage people to open savings accounts

(E) taxes due in Grootland on the amount that a

taxpayer has invested in interest-bearing savings

accounts

S T O P

IF YOU FINISH BEFORE TIME IS CALLED, YOU MAY CHECK YOUR WORK ON THIS SECTION ONLY.

DO NOT TURN TO ANY OTHER SECTION IN THE TEST.