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Assumption. The correct answer choice is (D)
The stimulus says that government bureaucrats have taken private-sector jobs due to the public-private pay gap. If the gap is closed, these bureaucrats will return to their government jobs. Thus, says the author, public agencies will function better.
A major missing assumption here is that the influx of the old bureaucrats will actually improve the functioning of public agencies.
Answer choice (A): We need not assume that the old government bureaucrats, now moved to private-sector jobs, will use their private-sector skills when they return to government jobs. They could just use their old government skills.
Answer choice (B): The argument does not suggest that the skill, quality, or experience of bureaucrats is the "most important factor" in determining the functioning of government agencies. The argument merely suggests that the return of government bureaucrats from private-sector jobs will lead to some improvement — perhaps big, perhaps small.
Answer choice (C): Assume the logical opposite of this statement: What if the public-private pay gap will not continue to increase without government action? Perhaps the public-private pay gap will stay positive but constant. This does not destroy the argument: there still may be a need for government action to close the pay gap to zero. Thus, by the Assumption Negation test, this answer choice is not correct.
Answer choice (D): This is the correct answer choice. Assume the logical opposite of this statement: What if people who moved from government jobs to private-sector jobs would not choose to change careers back to government jobs? If so, the author's argument will totally fail. Thus, by the Assumption Negation test, the statement contained in this answer choice is absolutely necessary for the argument.
Answer choice (E): The argument never discussed what would happen if the public-private pay gap increases, rather than shrinks.