Inflation rising trend

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Inflation rising trend

by Gaurav 2013-fall » Sat May 19, 2012 12:17 am
Last year the rate of inflation was 1.2 percent, but for the current year it has been 4 percent. We can
conclude that inflation is on an upward trend and the rate will be still higher next year.
Which of the following, if true, most seriously weakens the conclusion above?
(A) The inflation figures were computed on the basis of a representative sample of economic data rather than
all of the available data.
(B) Last year a dip in oil prices brought inflation temporarily below its recent stable annual level of 4 percent.
(C) Increases in the pay of some workers are tied to the level of inflation, and at an inflation rate of 4 percent
or above, these pay raises constitute a force causing further inflation.
(D) The 1.2 percent rate of inflation last year represented a ten-year low.
(E) Government intervention cannot affect the rate of inflation to any significant degree.

[spoiler]
OA B : source OG 10
[/spoiler]

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by GmatKiss » Sat May 19, 2012 12:37 am
Gaurav 2013-fall wrote:Last year the rate of inflation was 1.2 percent, but for the current year it has been 4 percent. We can
conclude that inflation is on an upward trend and the rate will be still higher next year.

Which of the following, if true, most seriously weakens the conclusion above?

We need to check for options which will tell us inflation may not increase continuously!

(A) The inflation figures were computed on the basis of a representative sample of economic data rather than all of the available data. - Nope; It says the calculations are wrong (Out of scope)
(B) Last year a dip in oil prices brought inflation temporarily below its recent stable annual level of 4 percent. Perfect; Says the inflation has stabled at 4
(C) Increases in the pay of some workers are tied to the level of inflation, and at an inflation rate of 4 percent or above, these pay raises constitute a force causing further inflation. So what ?? Irrelevant
(D) The 1.2 percent rate of inflation last year represented a ten-year low. Out of scope
(E) Government intervention cannot affect the rate of inflation to any significant degree. Out of Scope

IMO: B

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by ice_rush » Sat May 19, 2012 10:56 am
(B) is the clear winner here.

fyi..Choice (C) actually strengthens the argument.

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by sachindia » Thu Sep 13, 2012 5:53 am
I dont understand why A is wrong.

If it was calculated using a representation and not the actual data, then the derivation about the inflation result is wrong. So we cannot say that inflation will increase or decrease as the previous data was wrong.

Experts please help
Regards,
Sach

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by everything's eventual » Thu Sep 13, 2012 9:38 am
A) - How can you assume that the representative sample does not have the correct figures? This sample could still have the correct or close to correct figure.

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by vk_vinayak » Thu Sep 13, 2012 11:35 am
sachindia wrote:I dont understand why A is wrong.

If it was calculated using a representation and not the actual data, then the derivation about the inflation result is wrong. So we cannot say that inflation will increase or decrease as the previous data was wrong.

Experts please help
If the inflation is calculated wrongly the actual current inflation could be more than 4 also. It confirms that inflation is increasing. At the same time it could be less than 1.6, which says that inflation is decreasing. This option affects both cases (Strengthen and Weaken) equally. Hence it (Option A) is not correct.
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