Hi nikhilgmat31,
We're told that A and B are POSITIVE INTEGERS. We're asked if X^(A+B) > X^(A-B). This is a YES/NO question.
Before dealing with the two Facts, it's worth spending a few moments to look at the 'design' of the question...
Since A and B are both POSITIVE INTEGERS, (A+B) will ALWAYS be greater than (A-B). So the answer to this question is going to come down to the value of X.....
Fact 1: X(A+1) > X(A-1)
IF...
X = 1, (A+1) is > (A-1)
1^(A+B) = 1^(A-B), so the answer to the question is NO
IF...
X = 2, (2A+2) > (2A-2)
2^(A+B) > 2^(A-B), so the answer to the question is YES
Fact 1 is INSUFFICIENT
Fact 2: A = B+2
This tells us NOTHING about the value of X, so X can be 1 (the answer is NO) or 2 (the answer is YES).
Fact 2 is SUFFICIENT
Combined, we already know that X can be 1 or 2 and that each of those results has different answers...
Combined, INSUFFICIENT
Final Answer: E
GMAT assassins aren't born, they're made,
Rich