Foxconn, A Contract-Manufacturing Giant, Recently Retracted GMAT Reading Comprehension

Reading Passage Question

Foxconn, a contract-manufacturing giant, recently retracted its promise of building a manufacturing plant in Wisconsin that would have created 13,000 jobs. Another giant, Electrolux, announced last month that it is shutting down its oven-making plant in Tennessee since it cannot meet the higher costs arising from tariffs on imported steel. The gloomy picture painted by these developments is however not accurate. A closer look suggests that manufacturing in America is undergoing a revival. This sector has rebounded from the recession of 2008-09 and has shown expansion for 25 consecutive months. Credit for the same goes to the new tax-reform package, which reduced corporate-tax rates, made capital investment more attractive, and cut the incentive for American MNCs to hoard cash overseas. As a result, investment in plants and equipment in America has increased. In addition, as per a recent analysis, the cost of manufacturing is approaching parity for America and China, whereas ten years ago Chinese costs were over a tenth lower. Not only that, higher oil prices have also helped manufacturing businesses that are linked to the energy industry. According to the experts, in the light of such positive trends, if America is successful in developing a highly-skilled manufacturing workforce, then more companies will bring manufacturing jobs to America, taking the American manufacturing sector to new heights.

“Foxconn, a contract-manufacturing giant, recently retracted”- is a GMAT reading comprehension passage with answers. Candidates must have a solid grasp on English GMAT reading comprehension. There are four comprehension questions in this GMAT Reading Comprehension section. GMAT Reading Comprehension questions are designed to evaluate candidates' abilities to comprehend, analyze, and apply information or concepts. Candidates can actively prepare by answering GMAT Reading Comprehension Practice Questions.

Solutions and Explanation

1. What is the Main Point of the passage?

1. To discuss the policies being used in America
2. To explain how its policies have harmed the manufacturing sector in America.
3. To demonstrate the ineffective policies of America
4. To discuss how the manufacturing sector is growing in America
5. To discuss how the new policies have helped America grow in various sectors

2. Which of the following has not been mentioned as the effect of new tax reforms?

1. It cut the incentive for American MNCs to hoard cash overseas
2. It led to an increase in the investment in plants and equipment in America
3. It made capital investment more attractive
4. Foxconn retracted its promise of building a manufacturing plant in Wisconsin.
5. It reduced corporate-tax rates

3. What, as per the author, should America do to strengthen its manufacturing sector further?

1. Raise oil prices
2. Reduce tax incentives
3. Reduce exports
4. Increase tax rates
5. Develop a highly skilled manufacturing workforce.

4. Which of the following is not mentioned in the passage?

1. High costs have forced Electrolux to close its oven manufacturing plant in Tennessee.
2. The American manufacturing sector has recovered from the recession of 2008-09
3. The new tax-reform package motivated the American MNCs to hoard cash overseas.
4. The new tax-reform package is the main reason behind the growth of the manufacturing industry in America.
5. The cost of manufacturing is similar in China and America at present.

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