Mgmat RC

This topic has expert replies
Legendary Member
Posts: 544
Joined: Thu Oct 08, 2009 9:14 am
Location: Pune, India
Thanked: 31 times
Followed by:2 members

Mgmat RC

by adi_800 » Thu Sep 16, 2010 9:20 pm
The recent decline in the employment rate was spurred by predictions of slow economic growth in the coming year. However, those predictions would not have affected the employment rate if it had not been for the lack of capital reserves of major industries. So if major industries increase their capital reserves, the employment rate will not decline in the future.


Which of the following, if true, casts the most doubt on the validity of the argument above?

Major industry foresaw the drop in employment.

Some major industries had appreciable capital reserves.

An increase in labor costs could adversely affect the employment rate.

The government could pass legislation mandating that major industries set aside a fixed amount as capital reserves every year.

The drop in the employment rate was more severe this year than last.

Is B wrong for that fact that it uses some?
So, even if some industries had appreciable capital reserves...d decline in employment rate was observed...

User avatar
Legendary Member
Posts: 979
Joined: Tue Apr 14, 2009 1:38 am
Location: Hyderabad, India
Thanked: 49 times
Followed by:12 members
GMAT Score:700

by bubbliiiiiiii » Thu Sep 16, 2010 10:40 pm
adi_800 wrote:The recent decline in the employment rate was spurred by predictions of slow economic growth in the coming year. However, those predictions would not have affected the employment rate if it had not been for the lack of capital reserves of major industries. So if major industries increase their capital reserves, the employment rate will not decline in the future.


Which of the following, if true, casts the most doubt on the validity of the argument above?

Major industry foresaw the drop in employment.

Some major industries had appreciable capital reserves.

An increase in labor costs could adversely affect the employment rate.

The government could pass legislation mandating that major industries set aside a fixed amount as capital reserves every year.

The drop in the employment rate was more severe this year than last.

Is B wrong for that fact that it uses some?
So, even if some industries had appreciable capital reserves...d decline in employment rate was observed...
I am stuck between B and C.

Would have chosen B, but since Adi already said that B is not OA, I would choose C.

Experts guidance please. :)

User avatar
MBA Student
Posts: 113
Joined: Sat Dec 05, 2009 10:05 pm
Location: West Lafayette
Thanked: 1 times
GMAT Score:700

by g000fy » Fri Sep 17, 2010 10:41 am
I go with C

The employement rate can decline if the labor costs increase.

Legendary Member
Posts: 544
Joined: Thu Oct 08, 2009 9:14 am
Location: Pune, India
Thanked: 31 times
Followed by:2 members

by adi_800 » Sun Sep 19, 2010 7:19 am
(B) The fact that some major industries had appreciable capital reserves does not contradict the claim that an increase in these reserves would prevent a future drop in employment rates.

This is what Mgmat explanatn says for B..
But this is not the explanatn i m looking for..im looking for some concrete explanatn...
This kinda just states what is present in B and then goes on to say that it is wrong...

Anyone why B is wrong??

Master | Next Rank: 500 Posts
Posts: 201
Joined: Sat Jul 10, 2010 2:23 pm
Thanked: 7 times
Followed by:1 members

by ov25 » Sun Sep 19, 2010 7:42 am
I agree with C. Weakening using alternative cause for employment decline.

However, like the initiator had suggested, B is wrong because of the use of "some". Some is less than 50%. So its impact may or may not really effect the entire economy.