Companies implementing aggressive cost-cutting measures during economic downturns typically report immediate improvements in quarterly earnings. Howev...
GMAT Craft and Structure : (Structure) Questions
Companies implementing aggressive cost-cutting measures during economic downturns typically report immediate improvements in quarterly earnings. However, longitudinal studies examining post-recession performance indicate these financial gains aren't primarily ______; rather, they frequently stem from reduced expenditures on research and development initiatives that support long-term competitiveness.
Which choice completes the text with the most logical and precise word or phrase?
temporary
sustainable
transparent
diversified
Step 1: Decode and Map the Passage
Part A: Create Passage Analysis Table
| Text from Passage | Analysis |
|---|---|
| 'Companies implementing aggressive cost-cutting measures during economic downturns typically report immediate improvements in quarterly earnings.' |
|
| 'However, longitudinal studies examining post-recession performance indicate these financial gains aren't primarily' |
|
| [MISSING WORD/PHRASE] |
|
| '; rather, they frequently stem from reduced expenditures on research and development initiatives that support long-term competitiveness.' |
|
Part B: Provide Passage Architecture & Core Elements
Main Point: While cost-cutting during recessions appears to improve company finances immediately, these gains typically aren't lasting because they come from reducing investments essential for future competitiveness.
Argument Flow: The passage presents a surface-level observation (immediate earnings improvement from cost-cutting), then uses longitudinal research to reveal that these gains have a problematic quality—they're not what they initially appear to be because they result from cutting future-focused investments like R&D.
Step 2: Interpret the Question Precisely
This is a fill-in-the-blank question asking us to choose the best logical connector. The answer must create the right relationship between what comes before and after the blank.
Step 3: Prethink the Answer
- The missing word needs to describe a quality that these financial gains do NOT have
- From our analysis, we know that while companies see immediate earnings improvements from cost-cutting, longitudinal studies reveal these gains actually come from reducing R&D spending—investments that are crucial for long-term competitiveness
- If the gains come from cutting investments needed for future success, then they can't maintain themselves over time
- So the right answer should describe a quality related to lasting or maintaining over time
temporary
✗ Incorrect - 'Temporary' doesn't work logically with 'aren't primarily'
sustainable
✓ Correct
- 'Sustainable' fits perfectly: 'aren't primarily sustainable'
- Makes logical sense: gains that come from cutting future investments can't sustain themselves
transparent
✗ Incorrect - 'Transparent' relates to clarity or openness, not financial performance quality
diversified
✗ Incorrect - 'Diversified' relates to variety or spreading across different areas