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Runagia rural people

by ssgmatter » Tue May 04, 2010 9:00 am
Two years ago, the government of Runagia increased by 20 percent the governmentprovided
pensions paid to Runagians over 65. The aim of the increase was to stimulate
the economy in the rural regions of the country, where most pension recipients live.
Statistics, however, show that there has been no increase in economic activity in those
regions since then, but that there has been noticeably more spending in urban areas.
Which of the following, if true, most helps to explain why the increase resulted in the
unintended state of affairs described?
A. Until the pensions were increased, many Runagians over 65 in rural regions had
been receiving support from their children who live in urban areas.
B. The pensions were increased when the number of people below the poverty
level in rural areas of Runagia reached an all-time high.
C. City-dwellers in Runagia rarely travel to rural regions of the country.
D. The Runagian postal system is so inefficient that it can take up to three weeks
for pension checks to reach recipients in rural areas.
E. On average, the pensions were higher in rural than in urban areas before the
increase.

Please explain with reasons......

Many thanks!
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by thephoenix » Tue May 04, 2010 9:06 am
IMO A
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by ssgmatter » Tue May 04, 2010 9:12 am
Please explain all the options and resaons for choosing one and eliminating others......

OA is A

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by thephoenix » Tue May 04, 2010 9:33 am
B)half right half wrong supports that y there is no increase in rural areas , but does not tells anything about urban spendings
c)movement of city-dwellers has nothing to do with the argument
d)it is attacking the facts of stimulus(poisonous)
e)contradicts the claim in the argument
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by ssgmatter » Tue May 04, 2010 9:36 am
Can you please explain how A is correct with reasons......
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by thephoenix » Tue May 04, 2010 9:38 am
A only solves the mystery
since now the resource for pension-holders has changed
from one source to other in totality so there is no gain
but in urban the children are spending more
because now they have extra money to spend
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by ssgmatter » Tue May 04, 2010 9:40 am
but people in rural area also get increased pension.....what about this?......
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by thephoenix » Tue May 04, 2010 9:44 am
ssgmatter wrote:but people in rural area also get increased pension.....what about this?......
Until the pensions were increased, many Runagians over 65 in rural regions had
been receiving support from their children who live in urban areas. ------> implies that now they are not receiving money from their children
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by gmatmachoman » Tue May 04, 2010 10:05 am
thephoenix wrote:A only solves the mystery
since now the resource for pension-holders has changed
from one source to other in totality so there is no gain
but in urban the children are spending more
because now they have extra money to spend
Pheonix has nailed it correctly. here a paradox is created & we are asked to resolve it!
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by paddle_sweep » Tue May 04, 2010 10:22 am
I understand the reasoning behind 'A', but how best we could rule out 'E'? Any tips...

I narrowed it down to 'A' and 'E' and then chose 'E' assuming that pensions were anyway higher in rural areas but pensioners still didn't spend it enough to stimulate economics. 'E' seems to infer this.

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by thephoenix » Tue May 04, 2010 10:53 am
paddle_sweep wrote:I understand the reasoning behind 'A', but how best we could rule out 'E'? Any tips...

I narrowed it down to 'A' and 'E' and then chose 'E' assuming that pensions were anyway higher in rural areas but pensioners still didn't spend it enough to stimulate economics. 'E' seems to infer this.

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E is basically adding flavors to paradox its not resolving it
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by kevincanspain » Tue May 04, 2010 2:37 pm
You need to focus on what we have to account for: how is it possible that a higher government pension paid to people in rural area could be followed by an increase in spending in urban areas but not in rural areas?

Possible explanations:

the rural pensioners send the extra money to relatives in the cities
the rural pensioners go on shopping sprees in the cities
choice A

Choice E in irrelevant, as it doesn't explain the paradox


It is SO important to ensure that you understand the mystery before you look at the choices. Spend a few seconds to say something like this when you encounter such a question: This doesn't make sense. Why should (mysterious fact). even though(fact)? Attempting to predict an answer is not a waste of time; on the contrary, doing so is time well spent as long as it takes only a few seconds.
Last edited by kevincanspain on Tue May 11, 2010 2:13 pm, edited 1 time in total.
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by paddle_sweep » Tue May 04, 2010 5:59 pm
Thanks Kevin for the explanation and the tip. I would try out this
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by ssgmatter » Wed May 05, 2010 6:47 am
kevincanspain wrote:You need to focus on what we have to account for: how is it possible that a higher government pension paid to people in rural area could be followed by an increase in spending in urban areas but not in rural areas?

Possible explanations:

the rural pensioners send the extra money to relatives in the cities
the rural pensioners go on shopping sprees in the cities
choice A

Choice E in irrelevant, as it doesn't explain the paradox


It is SO important to ensure that you understand the mystery before you look at the choices. Spend a few seconds to say something like this when you encounter such a question. This doesn't make sense. Why should (mysterious fact). even though.(fact)? Attempting to predict an answer is not a waste of time; on the contrary, doing so is time well spent as long as you take only a few sentences
We can also say that according to option A since young people do not need to give money to parents in rural region so now young people can spend more money in cities.....

Also when you say that many rural people spend in cities or send money to relatives in cities, then isn't that too many assumptions....

Please share your thoughts.

Many thanks!
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by Stacey Koprince » Tue May 11, 2010 1:39 pm
Received a PM asking me to respond and also citing the source: GMATPrep. I'm posting that for you here this time but, in future, please actually post the source here yourself!!

I see there's been a lot of discussion on this one already. I'm going to try to answer it first without reading what anyone else has said (so that I'm not biased by other points of view!).

Q: Explain a Situation. Specifically, explain why some "increase" resulted in something unintended. Argument should consist of all premises.

Argument:
P1: -2y, Rgov incr. pensions 20% to >65.
P2: the goal was to stimulate rural econ
P3: no incr in rural regions. incr. in urban areas

In "explain a situation" questions, some information is given that seems contradictory or surprising, and we're supposed to find the thing that "reconciles" this information - the thing that explains why these contradictory or surprising things are NOT actually contradictory or surprising, but instead make sense.

The first two Ps, above, "go together." The third one represents the "surprise." When I find the right answer, I should be able to insert it into the argument before that last P and it should make the last P make sense.

A) The rural >65 ppl were getting $ from their kids; now, the gov't is giving them more $. What's a natural consequence of that? The parents won't need as much help from their kids. The kids will get to keep more of their own $. That explains how the urban ppl might have more $ to spend and it also explains why the rural spending didn't really change (because the rurals were already getting financial help before - just not from the gov't). Looking good.

B) Lots of ppl living < poverty in rural area. Gov't gives them more money. What's a natural consequence of that? If you're below poverty and get more money, you're probably going to need to spend it to live. That doesn't explain why spending did NOT go up in the rural areas. If anything, this choice makes the stats in P3 even more of a surprise.

C) According to the argument, "most pension recipients" live in rural areas. What the city-dwellers do isn't really the issue here. (Although I just thought of another thing that COULD explain the discrepancy: perhaps the rural folks go spend all of their money on trips to the cities? I hope that's not in a choice down below, because then I'll have to choose between it and A!)

D) They don't get their money for a while... but they still get it eventually. That doesn't explain why rural spending didn't go up and urban did.

E) BEFORE incr, pensions higher in rural areas. The increase is a percentage increase (20%), so the new pension amounts should make the rural pensions even higher relative to urban ones. So, this choice is like B - if anything, it makes the stats in P3 even more of a surprise, because the rural folks should have gotten MORE of an increase than the urban folks.

A is the best answer.

NOTE: a lot of people mistakenly think that their task on these question is to show WHY the discrepancy exists, or to point out the discrepancy. That's not what you're trying to do. You're trying to RESOLVE the discrepancy - you're trying to show why the information actually is NOT surprising at all.

Okay, now I'm going to go read what everyone else wrote! :)
Please note: I do not use the Private Messaging system! I will not see any PMs that you send to me!!

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