# GMAT Verbal : Understanding Style, Argument, and Organization in Business Passages

## Example Questions

### Example Question #5 : 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. The author would most likely agree with which of the following statements? Possible Answers: 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. Hotels and short-term rentals complement each other and can contribute to one another's mutual development. 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 : 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?

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, 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 directly confer extra fees on Homeowners' Associations.

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.

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."

### Example Question #31 : Purpose In 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 primary purpose of the second paragraph is to __________.

Emphasize the impact that short-term rentals have had on the travel industry, thereby transitioning betwen the first and third paragraphs.

Provide a roadmap for the rest of the passage, given that the first paragraph served as an introductory paragraph to acquaint the reader with the topic.

Convince the reader that short-term rentals are the most significant development in the realm in which the housing industry and the travel industry intersect.

Argue that short-term rentals have reached their peak, and that they will never command more eminence than that which they currently have.

Provide a quantitative valuation of a significant trend that would otherwise be difficult to tangibilize when drawing on subjective terms.

Emphasize the impact that short-term rentals have had on the travel industry, thereby transitioning betwen the first and third paragraphs.

Explanation:

While the first paragraph provides background on the short-term rental phenomenon, explaining how the internet aided its spread, the third paragraph addresses the controversies that it has sparked. As a means of transitioning between these two topics, the second paragraph explains the significance of short-term rentals in order to allow the full impact of the controversial issues to be comprehended by the reader. Therefore, the correct answer is "Emphasize the impact that short-term rentals have had on the travel industry, thereby transitioning betwen the first and third paragraphs."

A tempting wrong answer is "Convince the reader that short-term rentals are the most significant development in the realm in which the housing industry and the travel industry intersect." While this sounds like it could be accurate, there is no evidence in the passage to indicate that short-term rentals are "the most significant development in the realm in which the housing industry and the travel industry intersect." The author does not provide sufficient information to justify use of the superlative "most."

### Example Question #8 : Business Passages

The United Nations Convention on Contracts for the International Sale of Goods (CISG) can help countries throughout the world have a more uniform way of navigating the challenging waters of international law surrounding trade. It is not uncommon for two countries to have adopted different laws on international trade that conflict with each other. This becomes a serious problem when trade disputes arise. To help make this concept more tangible, consider the following hypothetical.

Suppose China ships three million dollars' worth of electronics to Uganda using standard bulk shipping transportation methods via a commonly traveled sea route. However, the packaging isn't secured in a manner sufficient to withstand unforeseen weather conditions. As a result, the goods become damaged in transit and are no longer fit for resale. Given that two countries are involved in this transaction–China and Uganda–the question arises as to which country’s trade laws will apply to resolve the matter at hand.

In this scenario, it is fortunate that both China and Uganda are parties to the CISG, which provide for a uniform set of laws governing trade. Such laws cover which party would be responsible for the damaged goods in this scenario. As a result, there will be no dispute as to whether China’s or Uganda's trade laws apply. Given that both countries are parties to the CISG, the laws set forth by the CISG would be applicable.

However, not all countries are parties to the CISG. One example is Rwanda. Even though Rwanda is not a party to the CISG, the fact of the matter is that CISG laws can still apply to it. The CISG applies to trade between countries so long as one of those countries is a party to the CISG (unless the parties expressly specify that the CISG will not apply to their specific trade arrangement). Several of Rwanda's main trade partners, such as the United States, China, Belgium, and Uganda, are parties to the CISG, so the laws of the treaty will apply in those trade agreements. Meanwhile, there is a different story when it comes to Rwanda's trade agreements with Kenya, Swaziland, Tanzania, and Thailand, which are not parties to the CISG. Due to these countries’ lack of membership in the CISG, if a problem ever arose in a trade agreement between Rwanda and one those countries, it would be unclear as to which country’s laws would apply.

There has been heated discussion as to whether Rwanda should sign the CISG. The United Nations Development Program takes the stance that it would behoove Rwanda to join. Whether or not Rwanda decides to become a member, the CISG will still apply to a large portion of its trade agreements, as about 100 countries are in fact CISG members, with a strong portion of those members also being trade partners with Rwanda. On the flip side, some Rwandan politicians believe that valuable autonomy would be lost if Rwanda assented to the CISG. However, given the potential benefits that Rwanda stands to gain from the CISG, these fears do not merit forgoing such a valuable opportunity.

The primary purpose of the second paragraph is to __________.

directly support the author's thesis

demonstrate the deleterious effects that can result from a trade dispute

indirectly offer a counter-argument to the author's thesis

suggest that China and Uganda should join the CISG

provide an example that makes an abstract concept easier to understand