I'd pick C here.

What's the OA and source?

I would pick A. I have explained how I went about it. Please feel free to jump in your thoughts or comments.

(A)The cost of living in both countries has remained roughly the same.
Given that there is 20% difference in per capita income and the cost of living is equal in both places. This confirms that the reforms have led to fall in incomes.

(B)The population of LSR is roughly the same as that of TRL.
Population numbers will not have an impact on the per capita income. Therefore, this option can disregarded.

(C)Reforms initiated by TRL have not resulted in per capita income growing to be 20% greater than two decades ago.
This option does not help support the 20% gap in per capita income. It says that TRL reforms have not caused a 20% difference in per capita. So this option introduces further doubts.

(D)LSU reforms were aimed at concentrating all major industries under state ownership, while TRL focused its reforms on supporting privately owned businesses.
This option explains the details of the reforms. Either approach can lead to rise in per capita income depending on the state of the economy and industries.

(E)Prior to the split, most of the income generating businesses were situated in territories that became part of TRL.
If this is true then the difference is almost obvious. However, this does not strengthen the conclusion that the reforms in LSR have reduced per capita income

The stem tells us that the "average" per capita income for the two states before the war was the same. So cost of living in both countries does not need to the same.

guerrero wrote:Politician: After a civil war two decades ago, the Laconian Democratic Republic was separated into two independent states: the Laconian Socialistic Union (LSR) and The Republic of Laconia (TRL). Both newly born states initiated a series of in-depth economic reforms, and now, the average annual per capita income in TRL is 20% greater than in LSR. Given that the two territories had roughly the same average per capita income before the civil war, we can conclude that reforms undertaken by LSR have led to a decrease in the average per capita income of that state's residents.

The argument above depends on which of the following assumptions?


(A)The cost of living in both countries has remained roughly the same.

(B)The population of LSR is roughly the same as that of TRL.

(C)Reforms initiated by TRL have not resulted in per capita income growing to be 20% greater than two decades ago.

(D)LSU reforms were aimed at concentrating all major industries under state ownership, while TRL focused its reforms on supporting privately owned businesses.

(E)Prior to the split, most of the income generating businesses were situated in territories that became part of TRL.

OA to follow ..

The answer should be C.
Conclusion: Reforms undertaken by LSR have led to a decrease in the average per capita income of that state's residents
Basis of conclusion: The two territories had roughly the same average per capita income before the civil war. Now, the average annual per capita income in TRL is 20% greater than in LSR.

Let's look at the answer options:
A: Cost of living is not related to per capita income. Irrelevant.
B: Population is irrelevant here as we are talking in terms of 'per capita'.
C: Correct. gives an alternative explanation for the 20% difference. This option says that the difference is because TRL did very well, and not because LSR did poorly.
D: What reforms the territories are focusing on is immaterial to our conclusion.
E: What happened prior to the split is again irrelevant to the conclusion.

OA is "C"

Answer Should be C

This Assumption Question is of the "Defender" category.
Argument states the conclusion that: reforms undertaken by LSR (and only this) have led to a decrease in the average per capita income of that state's residents.

How can we conclude this? - When nothing else has been changed.
OPtion C says, The Reforms in other country TRL have not made the economy improve, then, the other must have decreased. (Negates presence of other causes)

Option A, D and E are out of scope. These are discussing different issues.
Option B is saying, population now is same. But has it increased in LSR to reduce the capita income or decreased in TRL? - That is not known. therefore cannot be assumption.