CAT RC Practice Set-104

During the 1960’s and 1970’s, the primary economic development strategy of local governments in the United States was to attract manufacturing industries. Unfortunately, this strategy was usually implemented at another community’s expense: many manufacturing facilities were lured away from their moorings elsewhere through tax incentives and slick promotional efforts. Through the transfer of jobs and related revenues that resulted from this practice, one town’s triumph could become another town’s tragedy.

In the 1980’s the strategy shifted from this zero-sum game to one called “high-technology development,” in which local governments competed to attract newly formed high-technology manufacturing firms. Although this approach was preferable to victimizing other geographical areas by taking their jobs, it also had its shortcomings: high-tech manufacturing firms employ only a specially trained fraction of the manufacturing workforce, and there simply are not enough high-tech firms to satisfy all geographic areas.

Recently, local governments have increasingly come to recognize the advantages of yet a third strategy: the promotion of homegrown small businesses. Small indigenous businesses are created by a nearly ubiquitous resource, local entrepreneurs. With roots in their communities, these individuals are less likely to be enticed away by incentives offered by another community. Indigenous industry and talent are kept at home, creating an environment that both provides jobs and fosters further entrepreneurship.


Question: The primary purpose of the passage is to

  1. advocate more effective strategies for encouraging the development of high-technology enterprises in the United States
  2. contrast the incentives for economic development offered by local governments with those offered by the private sector
  3. acknowledge and counter adverse criticism of programs being used to stimulate local economic development
  4. define and explore promotional efforts used by local governments to attract new industry
  5. review and evaluate strategies and programs that have been used to stimulate economic development
Option: 5

Question: The passage suggests which of the following about the majority of United States manufacturing industries before the high-technology development era of the 1980’s?

  1. They lost many of their most innovative personnel to small entrepreneurial enterprises.
  2. They experienced a major decline in profits during the 1960’s and 1970’s.
  3. They could provide real economic benefits to the areas in which they were located.
  4. They employed workers who had no specialized skills.
  5. They actively interfered with local entrepreneurial ventures.
Option: 3

Question: The tone of the passage suggests that the author is most optimistic about the economic development potential of which of the following groups?

  1. Local governments
  2. High-technology promoters
  3. Local entrepreneurs
  4. Manufacturing-industry managers
  5. Economic development strategists
Option: 3

Question: The passage does NOT state which of the following about local entrepreneurs?

  1. They are found nearly everywhere.
  2. They encourage further entrepreneurship.
  3. They attract out-of-town investors.
  4. They employ local workers.
  5. They are established in their communities.
Option: 3

Question: The author of the passage mentions which of the following as an advantage of high-technology development?

  1. It encourages the modernization of existing manufacturing facilities.
  2. It promotes healthy competition between rival industries.
  3. It encourages the growth of related industries.
  4. It takes full advantage of the existing workforce.
  5. It does not advantage one local workforce at the expense of another.
Option: 5

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