The government predicts that, for consumers and businesses that make a large number of long-distance calls, the Federal Communications Commission's recent telephone rate cuts will greatly reduce costs, though some consumer groups disagree with the government's estimates, suggesting they are too optimistic.
The government predicts that, for consumers and businesses that make a large number of long-distance calls, the Federal Communications Commission's recent telephone rate cuts will greatly reduce costs
The government predicts that costs will be greatly reduced for consumers and businesses that make a large number of long-distance calls by the Federal Communications Commission's recent telephone rate cuts
The government's prediction is, for consumers and businesses making a large number of long-distance calls, costs will be greatly reduced by the recent telephone rate cuts made by the Federal Communications Commission
For consumers and businesses that make a large number of long-distance calls, the government's prediction that the Federal Communications Commission's recent telephone rate cuts will greatly reduce costs
For consumers and businesses making a large number of long-distance calls, the government predicts that the recent telephone rate cuts that the Federal Communications Commission has made will greatly reduce costs
The problem with choice E is in the placement of the modifier ("For consumers and businesses making a large number of..."). Since this comes before the main clause, "the government predicts...", the implication is that the government is making a prediction for the sake of those consumers and businesses: the prediction is "for" them - and may not even mean that their rates will fall!
Choice A, on the other hand, correctly captures the intended meaning of the sentence: The government is making a general prediction (it's not a prediction aimed at anybody in particular), about the rate cuts that will be experienced by certain individuals.
the passive voice is indeed a problem, because it's unnecessary. (remember that the passive voice should only be employed when there's a fairly compelling reason to use it.) in choice b especially, there's also an unacceptably long distance between the passive-voice action (will be greatly reduced) and the agent of that action (by the ...).
one thing you should definitely notice in choice c is the wordiness of 'the government's prediction is'. constructions like that, which can easily be replaced by more compact forms ('the government predicts') with no change in meaning, are ALWAYS wrong. (also, you need the word 'that' after 'is'.)
the prepositional phrase at the beginning of choice e is an example of a dangling modifier: one isn't quite sure exactly what it's supposed to modify. according to the strict rules followed by the gmat, this phrase should technically modify the action directly following the comma (the government predicts), which doesn't make sense: the government is not making predictions for the benefit of consumers and businesses (rather, it is merely making projections).
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