Critical Reasoning

Please explain the situation and the reasoning for the below argument.I have gone through the OG solution but could not understand.

Neither a rising standard of living nor balanced trade, by itself, establishes a country's ability to compete in the international marketplace. Both are required simultaneously since standards of living can rise because of growing trade deficits and trade can be balanced by means of a decline in a country's standard of living.

If the facts stated in the passage above are true, a proper test of a country's ability to be competitive is its ability to
(A) balance its trade while its standard of living rises
(B) balance its trade while its standard of living falls
(C) increase trade deficits while its standard of living rises
(D) decrease trade deficits while its standard of living falls
(E) keep its standard of living constant while trade deficits rise

aaggar7 wrote:Please explain the situation and the reasoning for the below argument.I have gone through the OG solution but could not understand.

Neither a rising standard of living nor balanced trade, by itself, establishes a country's ability to compete in the international marketplace. Both are required simultaneously since standards of living can rise because of growing trade deficits and trade can be balanced by means of a decline in a country's standard of living.

If the facts stated in the passage above are true, a proper test of a country's ability to be competitive is its ability to
(A) balance its trade while its standard of living rises
(B) balance its trade while its standard of living falls
(C) increase trade deficits while its standard of living rises
(D) decrease trade deficits while its standard of living falls
(E) keep its standard of living constant while trade deficits rise

The question says that both are required for a country to be competitive:
1. Rising standard of living
2. Balanced trade
Options B and D talk about falling standards of living → undesirable
Options C and E talk about increased trade deficits (i.e. trade not balanced) → undesirable.
Thus, answer choice A is the right answer.