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GMAT Prep Question- Darfir - GREAT QUESTION

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by Ian Stewart » Sat Jun 27, 2009 6:37 am
banker1 wrote:
rosh26 wrote:Source is GMAT Prep so I don't really think we can disagree with it.
Even GMAT Prep makes mistakes..
That's almost never true. There were a couple of typesetting issues with earlier versions of the software, and I've found one math question with the wrong answer, but otherwise there are no mistakes in GMATPrep.

The answer to the above question certainly should be B. As with many CR questions, it's absolutely crucial to understand the precise scope of the question itself:

"Which of the following, if true, provides the government with the strongest grounds to doubt that the politicians' recommendation, if followed, will achieve its aim?"

Answer choice E does not address the question. E says, essentially: there is a better way to achieve the goal of increasing exports. Fine, but that doesn't mean the proposal in the stem will fail.

B, on the other hand, tells us essentially that: conditions are different now than they were in the past. Already that gives us reason to dismiss the evidence from five and twelve years ago. And, if manufacturers are incapable of producing any more than they do now, then there's certainly reason to doubt they'd be able to produce more goods to export. Sure, it's possible, by reducing what's sold domestically, but we're only looking for a reason to doubt the conclusion, not to completely discredit it.
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by ghacker » Sat Jun 27, 2009 11:34 am
The answer is B

12 years ago and again 5 years ago, there were extended periods when the Darfir Republic's currency, the pundra, was weak: its value was unusually low relative to the world's most stable currencies. Both times a weak pundra made Dirfir's manufactured products a bargain on world markets, and Darfir's exports were up substantially. Now some politicians are saying that, in order to cause another similarly sized increase in exports, the government should allow the pundra to become weak again.

Why shouldn't the government allow the currency to become weak ?

Because there is no point weakening the currency since the the manufacturing sector is at its full capacity , if we weakened the currency and got the demand the country is not in a position to supply the goods

So weakening would not be a wise idea
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by pranav » Sat Jun 27, 2009 12:02 pm
Anwer is B.

Politician's Recommendation : Weaken currency --> It will lead to increase exports.

A weak currency will increase demand for Dafir Republic's goods.
But if manufacturing sector is near full capacity, it wont be able to produce any more goods to satisfy the increasing demand. Hence there will be no incremental increase in exports even after weakening the currency.

The politician doesn't talk about efficiency of the manufacturing sector. Hence (E) is irrelevant.
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Re: GMAT Prep Question- Darfir - GREAT QUESTION

by ketkoag » Sun Jun 28, 2009 12:15 pm
rosh26 wrote:12 years ago and again 5 years ago, there were extended periods when the Darfir Republic's currency, the pundra, was weak: its value was unusually low relative to the world's most stable currencies. Both times a weak pundra made Dirfir's manufactured products a bargain on world markets, and Darfir's exports were up substantially. Now some politicians are saying that, in order to cause another similarly sized increase in exports, the government should allow the pundra to become weak again.

Which of the following, id true, provides the government with the strongest grounds to doubt that the politicians' recommendation, if followed, will achieve its aim?

a) Several of the politicians now recommending that the pundra be allowed to become weak made the same recommendation before each of the last 2 periods of currency weakness

b) After several decades of operating well below peak capacity, Darfir's manufacturing sector is now operating at near peak levels.

c) The economy of a country experiencing a rise in exports will become healthier only if the county's current currency is strong or the rise in exports is significant

d) Those countries whose manufacturing products compete with Diarfir's on the wordl market all currently have stable currencies.

e) A sharp improvement in the efficiency of Darfir's manufacturing plants would make Darfir's product a bargain on world markets even without any weakening of the pundra relative to other currencies.



Answer B


So usually, i can usually understand the answer if I pick the wrong choice in CR - not so much in this case. Can the experts please explain?
i think B is the correct answer..coz in B it says that Darfir's manufacturing sector is near its peak, so even if a sharp improvement in the efficiency of Darfir's manufacturing plants takes place, its exports cannot increase substantially.. In E the word "would" clearly tells us that a improvement in the efficiency of Darfir's manufacturing plants may increase exports or may not.. it does not affirm that it will increase.. so i think this makes E as a wrong choice..
NICE question by the way.. :)
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by ssgmatter » Fri Apr 30, 2010 8:59 am
My question is that in option E can't we understand the option as giving the alternate reason for the increase in the export without weakinging the pundra currency.....which would weaken the argument

Please helme understand this logic here....m really running out of logic to understand this one........I am stuck between B and E here

cheers!
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by kevincanspain » Fri Apr 30, 2010 10:21 am
ssgmatter wrote:My question is that in option E can't we understand the option as giving the alternate reason for the increase in the export without weakinging the pundra currency.....which would weaken the argument

Please helme understand this logic here....m really running out of logic to understand this one........I am stuck between B and E here

cheers!
You need to pay closer attention to the verb tenses: E talks about a hypothetical sharp increase, not about one that actually occured in the past. What's more, the passage states that the it was the past devaluations that made D's products bargains
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by ssgmatter » Fri Apr 30, 2010 7:48 pm
@kevin....this means that E is out of scope option as iit is talking about something that may or may not happen in the future....i mean just a hypothetical situation.....

Please correct me
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by biker317 » Thu Aug 25, 2011 7:18 am
A little late to this, but the manufacturing industry could be producing 100 items at full capacity but that does not mean it is selling/exporting all 100 items. Now with a weaker currency, all 100 items have the possibility of being sold in the world market. IMO B fails. E is ok, I don't get why folks are saying it is out of scope. Ron Purewal points out that S/W arguments have final answers that are out of scope.
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by kunalm » Thu Aug 25, 2011 11:06 pm
Same viewpoint. Manufaturing has reached its peak doesnt at all means export will increase.
Infact I think it strengthens the recommendation. If the currency becomes weak , now that manufacturing is at the peak there would be more exports. "E" is the onlyanswer which atleast doesn't strengthen the recommenation. Though I agree it doesn't weaken the argument which is what the question demands.
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