payroll and economy

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payroll and economy

by mparakala » Mon Feb 04, 2013 7:34 pm
Economist: Drastically cutting payroll costs by reducing employees will bolster corporate profits and the national economy. In such a restructuring, the remaining employees must be organized to work more efficiently, which includes increasing their amount of overtime work, rather than hiring new underutilized personnel. The resulting increase in national productivity will then allow those who were made jobless to find work in new positions that will have sprung up with the healthier economy.

Which of the following, if true, casts most doubt on the economist's conclusion above?

A) If employees are made to work longer hours, the additional hours worked will not be as productive as the regular hours these same employees have already worked.

B) Most corporations are already at the minimum numbers of employees needed to effectively maintain their operations.

C) Some economists predict that the national economy will substantially improve in the next two years even without drastic reductions in payroll costs.

D) If corporations reduce the number of employees, the average number of employees per company will decrease.

E) Many of the new positions in a restructured economy would be lower paying than those lost during the restructuring.


I shall post the OA later.

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by hemant_rajput » Tue Feb 05, 2013 2:27 am
IMO A
I'm no expert, just trying to work on my skills. If I've made any mistakes please bear with me.

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by charu_mahajan » Tue Feb 05, 2013 10:54 am
IMO B

C, D and E - Out of scope

A does weaken the argument but not as much as B does. A states that additional hours will not be as productive as regular hours. What I infer is that they might not be as productive but they will still be somewhat productive. Whereas B states that - Most corporations are already at the minimum numbers of employees needed to effectively maintain their operations. So MOST of the corporations are already on the edge. Removing a few employees might seriously affect operations. And hence, this weakens the Economist's claim the most.

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by Brian@VeritasPrep » Thu Feb 07, 2013 6:16 pm
Great explanation, Charu - and you're right on.

A doesn't necessarily weaken the conclusion. If employees used to work 40 extremely productive hours per week and now they work 40 extremely productive hours per week plus 10 more somewhat-productive hours per week, businesses still get more value out of each employee and the conclusion can still hold.

This is where it's strategically important to read all answer choices. If you fall in love with A before you read B, you'll miss the fact that B is a lights-out weaken answer. B shows that there's no way we can cut employees - cutting even one employee at these companies would jeopardize the entire operation and be counterproductive to the goal.

You'll find that as questions get harder you'll often need to pit two "possible" choices against each other to finally find that flaw in the "trap answer", so make sure that you take the extra few seconds to at least read each option before you commit to one. This question is a good example of that.
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by mparakala » Fri Feb 08, 2013 12:47 pm
Thats right OA is B

A talks about what is mentioned in the stimulus already. The stimulus talks about making long hours of work efficient. So, A is incorrect as it tries to prove that the premise is incorrect.

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by tanviet » Sat Feb 09, 2013 2:40 am
though I do not choose A this time, the wrong answer of type A is popular on og books, I failing many times.

I call A: AFFECTING BUT NOT GOOD ENOUGH to be correct.

A is still a strengthener even if the new job have lower salaries.

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by insanejuxtapose » Wed Feb 13, 2013 6:33 am
Brian@VeritasPrep wrote:Great explanation, Charu - and you're right on.

A doesn't necessarily weaken the conclusion. If employees used to work 40 extremely productive hours per week and now they work 40 extremely productive hours per week plus 10 more somewhat-productive hours per week, businesses still get more value out of each employee and the conclusion can still hold.

This is where it's strategically important to read all answer choices. If you fall in love with A before you read B, you'll miss the fact that B is a lights-out weaken answer. B shows that there's no way we can cut employees - cutting even one employee at these companies would jeopardize the entire operation and be counterproductive to the goal.

You'll find that as questions get harder you'll often need to pit two "possible" choices against each other to finally find that flaw in the "trap answer", so make sure that you take the extra few seconds to at least read each option before you commit to one. This question is a good example of that.

Even with B, isn't it an assumption that cutting employees below the minimum number is jeopardizing the operations? For e.g

If the company has 1000 employees currently (minimum) to effectively run operations and
decides to fire 100 employees and expect the remaining 900 employees to work overtime? they may still be more productive than with 1000 employees. Something similar to A. How do we decide in such a case?