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The antecedent of "them" is clearly enough "businesses," despite the presence of many plural nouns (supporters, tax breaks, governments, and businesses). The structure of the sentence is a big part of the reason.
The correct answer is (D): Supporters consider tax breaks (that local governments award businesses (each year) (to prevent them from moving)) vital economic development tools while critics denounce the tax breaks as corporate welfare that helps some localities but weakens the national economy.
In bold, you see the main core of the sentence: Supporters consider tax breaks vital economic development tools.
In parentheses, you see modifiers. There is a relative clause modifying "tax breaks." Within that relative clause, there are two adverbial modifiers of "award": "each year" (how often the governments award), and "to prevent them from moving" (why the governments award). Notice that "them" is buried in a modifier within a modifier, far removed from the main sentence subject "supporters" or even the modified noun "tax breaks." For clarity, such a pronoun is more likely to have an antecedent within the same modifier.
But that still leaves "governments" or "businesses" as possible antecedents. If "governments" were the intended antecedent, the phrase would have to read "local governments award businesses...to prevent themselves from moving." The reflexive pronoun "themselves" would be necessary because "governments" is the subject of the verb "award" whereas the pronoun is the object of the verb "prevent." Think of the simple example "I hit the tennis ball to myself."
Both "businesses" and "them" are objects of their respective verbs, so that similarity links them together. Plus, "businesses" is both the most logical and the closest antecedent.
There are two main things going on in this question: (1) The idiom "X considers Y Z" (incorrectly given in some choices as "X considers Y to be Z") (2) The repetition (or not) of "them."
On the GMAT, if you use a particular pronoun more than once, it must refer to the same antecedent every time. Thus, (A) and (C), which both use "them" first to refer to "businesses," then later to refer to "tax breaks," are incorrect.
_________________ Emily Sledge Instructor ManhattanGMAT |
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