medium · GMAT Verbal
A study of special economic zones found that zones offering tax breaks attracted investment only when courts in the zone reliably enforced contracts. Where contract enforcement was weak, the same tax breaks drew little investment, because investors feared they could not recover money owed to them.
Which of the following can be properly inferred from the passage?
- Tax breaks alone were not sufficient to attract investment in the zones studied.
- Reliable contract enforcement alone attracts investment without any tax breaks.
- Tax breaks discourage investment when courts are weak.
- All zones with reliable courts attracted heavy investment.
- Investors care more about courts than about taxes.
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