QUESTION TEXT: Researchers have found that the percentage of…
QUESTION TYPE: Paradox
PARADOX: Low income countries have higher new business creation rates than high income countries do.
Higher income countries have more business opportunities than middle income countries. High and middle income country entrepreneurs start businesses to take advantage of opportunities.
ANALYSIS: The author has told us nothing about low income countries. Maybe they start businesses for some reason other than exploiting business opportunities.
Note that the question is about differences in rates of starting a business. The wrong answers either provide no difference or talk about something other than starting.
- This provides no difference between high and low income countries, so how can it explain anything?
- This provides an advantage for high income countries. It makes the situation more confusing.
- Same as A. This provides no difference between high and low income countries, so how can it explain anything?
Also, the question is about starting a business, not whether a business succeeds.
- This shows a reason why businesses will fail. But that’s irrelevant – the question is about how many people start a business.
(This doesn’t prove people don’t start businesses. The people who started the failed businesses weren’t expecting to fail.)
- CORRECT. This provides a different reason people start businesses in low income countries. If alternatives to starting a business are terrible, then it makes sense that people start many businesses.
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