UPSC Prelims 2020 CSAT Paper II · Q23 of 80 Comprehension medium

Passage

People will invest in education whenever they are granted the economic freedom to fully enjoy its benefits. Again, this is for the obvious reason that the return on education increases as the level of economic freedom rises. When people, thanks to lower tax rates, are allowed to retain most of the higher income that they gain from each incremental level of education, it makes eminent sense to invest in education. On the other hand, when the government decides to tax the higher income of educated individuals at even higher rates, it makes very little sense to invest in educating oneself further. The same incentives apply to parents who decide on whether to invest in their children's education.

With reference to the above passage, the following assumptions have been made : 1. Lower tax rates in a country invariably translate into greater investments in higher education. 2. Investment in the education of children ensures their economic freedom. 3. Economic freedom has a positive impact on building up human capital. Which of the above assumptions is/are valid?

  1. (a) 1 only
  2. (b) 2 only
  3. (c) 3 only ✓ UPSC's answer
  4. (d) 1, 2 and 3

Why the answer is (c)

• Assumption 1 is invalid because the passage states that lower tax rates make it 'eminent sense' to invest, but does not claim this 'invariably' translates to greater investment, as other factors may influence decisions.

• Assumption 2 is invalid because the passage discusses how economic freedom drives investment in education, not the reverse; it does not state that educating children ensures their economic freedom.

• Assumption 3 is valid because the passage explicitly links higher economic freedom to increased returns on education, implying that economic freedom encourages the accumulation of human capital through educational investment.

• Therefore, only Assumption 3 is a valid inference from the text, making option (c) the correct answer.

Why the other options are wrong

(a) 1 only
Assumption 1 is too absolute ('invariably') and not supported by the passage's conditional reasoning.
(b) 2 only
Assumption 2 reverses the causal relationship presented in the passage, which links economic freedom to educational investment, not vice versa.
(d) 1, 2 and 3
This option is incorrect because Assumptions 1 and 2 are not valid inferences from the passage.

Asked in the CSAT Paper II of the UPSC Civil Services Preliminary Examination 2020, held on 4 October 2020. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.

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