There is no penalty for incorrect responses on the GRE. But the GRE is a computer adaptive test (CAT) which means that your responses determine the next set of questions you receive. Incorrect responses move you down the ladder of question difficulty - which is not the direction you want to go. Right answers to difficult questions are worth more than right answers to easy questions. The more difficult questions you receive, the more chances you have to earn a high score with fewer correct responses.
While you will not be penalized for wrong guesses, if you guess, be sure that it is an educated guess. Narrow down the choices as best you can. If you can eliminate 1 or 2 responses, your chances of answering a question correctly improves. Eliminate obvious wrong answers and then go with your gut. Do not spend a lot of time on this - respond and move on to new questions that you may be able to easily answer.
