Question: Maltania and Outsourcing

If we were to remove "annual" from answer choice B, then A and B would both be suitable answers. That said, answer choice A would still be more succinct. Then again, I doubt that the GMAT would have two answers that were so equal.

Cost and costs are behaving as nouns and as verbs.

A) As a verb: . . . outsourcing costs Maltania... (subject - verb - noun/object)

B) As a noun: . . . annual cost to Maltania
Annua (adjective - noun - prepositional phrase/adjective

The problem with E is that the word "reduction" applies to BOTH output and taxes.

In other words, we could also write "...causes an output reduction and a tax reduction."

The term "tax reduction" is ambiguous. It could mean that the government collects fewer taxes, or it could mean that the citizens' tax rates are reduced.

Given this ambiguity, we can eliminate E.

Good question, abnerawesome!

If we eliminate the redundancy from answer choice D (by deleting either ANNUAL or A YEAR), we're still left with the ambiguous nature of "outsourcing TO Maltania."

Cheers,
Brent

If OUTPUT and TAX are both modifying the word REDUCTION, then we can't say that TAX is the only modifying word.

Here's a similar sentence: Joe visited cold and barren Iceland, which is located near Greenland.

Here COLD and BARREN both modify ICELAND. So, we can't say that WHICH refers solely to BARREN.

Does that help?

Cheers,
Brent

I'd say that, even with that change, we still have an ambiguity issue.

With answer choice A, we see that outsourcing COSTS $600 million. The prepositional phrase, "in reduced output and lost taxes," serves as a modifier that tells us more about the nature of the $600 million.

Answer choice C tells us that reduced output and lost taxes COST $600 million, but it's unclear what roll OUTSOURCING plays here. Did OUTSOURCING cause the reduced output and lost taxes, or did it cause the $600 million?

Cheers,
Brent