GMAT Verbal : Analyzing Argumentative Claims, Bias, and Support in Business Passages

Study concepts, example questions & explanations for GMAT Verbal

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Example Questions

Example Question #57 : Extrapolating From Humanities Passages

While hotels have traditionally held a firm grip on the market of vacation-goers, the emergence of companies fostering short-term rentals are dramatically changing the landscape of the travel industry. Before the advent of the modern online forum, short-term rentals were an arrangement limited by sheer logistics. Information about the availability of (and desire for) a short-term rental was difficult to transmit and share. However, with the current explosion of social media and cyber enterprise, the business model of short-term rentals has blossomed.

In 2011, 40% of travelers reported that they would be staying in a short-term rental during the year, as opposed to a traditional hotel. By 2013, this figure had jumped up to a staggering 49%. The short-term rental business is a $24 billion market, holding 8% of the total market of U.S. travel. Rapidly expanding and growing with the innovations of creative renters, the question that hangs in the air is what this means for communities. Short-term rentals have had a polarizing effect in many ways, becoming a source of joy for venturists and cause of dismay for many homeowners.

In recent news, there have been incredible scandals in which short-term renters have abused the property loaned to them, causing thousands of dollars' worth of property damage. Other accusations include disturbing the peace and the commission of criminal acts. Homeowners' Associations (HOAs) have been up in arms, and the legal backlash has been significant. New York enacted firm restrictions on short-term renters, and many HOAs now embed limits on the purposes that a space may be used for, barring short-term rentals.

However, this reaction is an over-reaction, and a detrimental one at that. Cities and towns that set hard limits against short-term rentals are halting the economic growth that would otherwise accompany them. Vacationers are likely to be deterred from venturing out to towns that have banned more affordable short-term rentals. While some vacationers might opt to stay at a hotel in desirable locations, as the short-term rental industry continues to grow, it will become more and more likely that vacation-goers will simply choose alternative destinations that actually allow for short-term rentals.

This is not to say, however, that short-term rentals should be completely unregulated. The key is imposing useful regulations that are mutually beneficial to both communities and to the proprietors of short-term rentals. One potential solution would be to impose reasonable taxes on visitors that use short-term rentals; having requirements for minimum stays could also ensure more consistency for the communities. This also has the added benefit of generating income for towns and cities. There is no reason why communities should see the short-term rental industry as an adversary, when it can just as easily be made into an ally.

The author would most likely agree with which of the following statements?

Possible Answers:

Hotels and short-term rentals complement each other and can contribute to one another's mutual development.

In general, regulations have proven to do a disservice to travel industry, as the red tape prevents commerce from moving freely, and discourages travel as a whole.

While short-term rentals and communities would mutually benefit from regulations, a hard ban against them would be counterproductive.

Communities should see short-term rentals as an adversary, when they can just as easily be made an ally.

Although short-term rentals are popular right now, it is likely that they will diminish in value as more restrictions are enstated against them.

Correct answer:

While short-term rentals and communities would mutually benefit from regulations, a hard ban against them would be counterproductive.

Explanation:

The author would most likely agree with the statement "While short-term rentals and communities would mutually benefit from regulations, a hard ban against them would be mutually counter-productive." This is because the author explicitly states that communities and short-term rentals should be allies as opposed to enemies. Thus, mutually beneficial regulations would serve them both well. 

This answer choice says the exact opposite, and so it is incorrect: "Communities should see short-term rentals as an adversary, when they can just as easily be made an ally."

There is no evidence to suggest that the author supports this statement: "Although short-term rentals are popular right now, it is likely that they will diminish in value as more restrictions are enstated against them."

The author implies that hotels and short-term rentals are competitors, so this statement is not correct: "Hotels and short-term rentals complement each other and can contribute to one another's mutual development."

The author believes that some regulations are beneficial, so this statement is incorrect: "In general, regulations have proven to do a disservice to travel industry, as the red tape prevents commerce from moving freely, and discourages travel as a whole."

Example Question #1 : Analyzing Argumentative Claims, Bias, And Support In Business Passages

While hotels have traditionally held a firm grip on the market of vacation-goers, the emergence of companies fostering short-term rentals are dramatically changing the landscape of the travel industry. Before the advent of the modern online forum, short-term rentals were an arrangement limited by sheer logistics. Information about the availability of (and desire for) a short-term rental was difficult to transmit and share. However, with the current explosion of social media and cyber enterprise, the business model of short-term rentals has blossomed.

In 2011, 40% of travelers reported that they would be staying in a short-term rental during the year, as opposed to a traditional hotel. By 2013, this figure had jumped up to a staggering 49%. The short-term rental business is a $24 billion market, holding 8% of the total market of U.S. travel. Rapidly expanding and growing with the innovations of creative renters, the question that hangs in the air is what this means for communities. Short-term rentals have had a polarizing effect in many ways, becoming a source of joy for venturists and cause of dismay for many homeowners.

In recent news, there have been incredible scandals in which short-term renters have abused the property loaned to them, causing thousands of dollars' worth of property damage. Other accusations include disturbing the peace and the commission of criminal acts. Homeowners' Associations (HOAs) have been up in arms, and the legal backlash has been significant. New York enacted firm restrictions on short-term renters, and many HOAs now embed limits on the purposes that a space may be used for, barring short-term rentals.

However, this reaction is an over-reaction, and a detrimental one at that. Cities and towns that set hard limits against short-term rentals are halting the economic growth that would otherwise accompany them. Vacationers are likely to be deterred from venturing out to towns that have banned more affordable short-term rentals. While some vacationers might opt to stay at a hotel in desirable locations, as the short-term rental industry continues to grow, it will become more and more likely that vacation-goers will simply choose alternative destinations that actually allow for short-term rentals.

This is not to say, however, that short-term rentals should be completely unregulated. The key is imposing useful regulations that are mutually beneficial to both communities and to the proprietors of short-term rentals. One potential solution would be to impose reasonable taxes on visitors that use short-term rentals; having requirements for minimum stays could also ensure more consistency for the communities. This also has the added benefit of generating income for towns and cities. There is no reason why communities should see the short-term rental industry as an adversary, when it can just as easily be made into an ally.

Which of the following most likely explains why Homeowners' Associations do not tend to support short-term rentals?

Possible Answers:

Homeowners' Associations see short-term rentals as being competition for the market of vacationers. 

Homeowners' Associations, as a general policy, have always looked down upon short-term rentals because they are unsanitary. 

Short-term rentals directly confer extra fees on Homeowners' Associations.

Short-term rentals, due to the transitory nature of their inhabitants, can make the members of a community feel uncomfortable, thereby negatively impacting the Homeowners' Association. 

Short-term rentals do not confer a benefit on the Homeowners' Association that is comparable to that conferred on the proprietor of a short-term rental. 

Correct answer:

Short-term rentals, due to the transitory nature of their inhabitants, can make the members of a community feel uncomfortable, thereby negatively impacting the Homeowners' Association. 

Explanation:

The best answer is "Short-term rentals, due to the transitory nature of their inhabitants, can make the members of a community feel uncomfortable, thereby negatively impacting the Homeowners' Association." Given that the patrons of short-term rentals are constantly coming and going, the nature of short-term rentals can upset members of a Homeowners' Association, who usually strive for consistency and stability. 

While short-term rentals may be competition for hotels, there is no evidence that they are competition for Homeowners' Associations. Therefore, this answer choice is wrong: "Homeowners' Associations see short-term rentals as being competition for the market of vacationers."

The fact that short-term rentals experience success would not be an upsetting factor for Homeowners' Associations. Therefore, this answer choice is wrong: "Short-term rentals do not confer a benefit on the Homeowners' Association that is comparable to that conferred on the proprietor of a short-term rental."

There is no evidence in the passage to support either "Short-term rentals directly confer extra fees on Homeowners' Associations" or "Homeowners' Associations, as a general policy, have always looked down upon short-term rentals because they are unsanitary."

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