VERITAS: TELL me WHY?

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VERITAS: TELL me WHY?

by imskpwr » Mon Jul 07, 2014 5:12 am
The recent interest among credit card issuers in establishing credit card use in the province of Lijau is perplexing. Residents of Lijau save almost 40% of their discretionary income, a rate more than three times the national average, and most residents of Lijau are more likely to forgo a major purchase or borrow from relatives than to rely on an outside source of funds.

Which of the following, if true, would most support a prediction of success of the credit card issuers in establishing credit card use in the province of Lijau?

a. Lijau is the richest province in the country.

b. Unlike the country's other provinces, Lijau does not allow its residents to declare bankruptcy to avoid debt obligations.

c. Before credit card use was established in the rest of the country's provinces, those provinces had a rate of discretionary income saving equal to or in excess of the rate currently found in Lijau.

d. Lijau's wealthiest citizens use credit cards heavily during their trips abroad.

e. In the modern economy, credit cards are associated with both prestige and convenience.

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by phanikpk » Fri Jul 11, 2014 6:30 pm
IMO C

1. OFS
2. Doesn't provide information about success of credit card
3. Seems good. Because, since in other provinces where discretionary income although 3 times less than lijau became a success, then there is big possibility of success in Lijau also
4. OFS
5. OFS

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by imskpwr » Fri Jul 11, 2014 10:57 pm
phanikpk wrote:IMO C

1. OFS
2. Doesn't provide information about success of credit card
3. Seems good. Because, since in other provinces where discretionary income although 3 times less than lijau became a success, then there is big possibility of success in Lijau also
4. OFS
5. OFS
I feel if something is true or valid for one area/scope, it is not necessary that it will be true for other area/scope.

for example,
just because my friends got good marks through XYZ study academy, it is not necessary that I will also get good marks through XYZ study academy. There may be something else that might have favored them but may not favor me.

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by ikaplan » Sat Jul 12, 2014 1:17 am
The situation: People from Lijau are prone to save 3 times more that people from other provinces. Also, they would rather borrow from a relative than from a bank.

Therefore, a bank that introduces a credit card instrument is likely to fail because residents of Lijau are not big spenders.

Which answer choices weakens the argument that credit card launch will be failure? Which answer choice proves that the credit card product will be a success? For the credit card to be a success, a change of behavior by the citizens of Lijau is required. Look fora similar answer.

A) Lijau is the richest province in the country.
So what? This tell us nothing about prospective change in behavior. It only states a fact. OK, people in Lijau live in the richest province. It has nothing to do with the amount that people earn... people may live in the richest province but they are also the greatest savers of money. Discard this one.


B) Unlike the country's other provinces, Lijau does not allow its residents to declare bankruptcy to avoid debt obligations.
That's correct. The argument already told us that if people are about to go bankrupt, they will turn to their relatives. Mom, give me the money, I am not going to the bank. This choice only confirms what is already stated in the passage.

C) Before credit card use was established in the rest of the country's provinces, those provinces had a rate of discretionary income saving equal to or in excess of the rate currently found in Lijau.
This choice states that before introduction of credit cards in other provinces, people were big savers just like their fellow citizens in Lijau. But once they were exposed to something new i.e. the credit card, they changed their behavior. Therefore, it is likely that if credit card is introduced in Lijau, people who live there will follow the same pattern, get credit card and make the product a success.

D) Lijau's wealthiest citizens use credit cards heavily during their trips abroad.
OK, but this tells us nothing about the mass, prospective usage of credit cards. This choice deals with current behavior. It's a lukewarm premise that can fit in the argument. Also, it has nothing to do with the change of behavior which is crucial for the credit card success.

E) In the modern economy, credit cards are associated with both prestige and convenience.
Another lukewarm premise. Thank you but nowhere in the argument it is stated that people who live in Lijau are hungry for prestige and convenience. If they are- this can make the credit card success. But if they are not, the credit card will fail.


IMO: C is the correct answer
"Commitment is more than just wishing for the right conditions. Commitment is working with what you have."

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by phanikpk » Sat Jul 12, 2014 10:06 pm
imskpwr wrote:
phanikpk wrote:IMO C

1. OFS
2. Doesn't provide information about success of credit card
3. Seems good. Because, since in other provinces where discretionary income although 3 times less than lijau became a success, then there is big possibility of success in Lijau also
4. OFS
5. OFS
I feel if something is true or valid for one area/scope, it is not necessary that it will be true for other area/scope.

for example,
just because my friends got good marks through XYZ study academy, it is not necessary that I will also get good marks through XYZ study academy. There may be something else that might have favored them but may not favor me.
Yes whatever you said is true but we have to compare the conditions not by giving equal strength but by giving less strength where, Lijau has higher national income than in the other parts of the country. Since, the condition of credit card success already became successful for a lower national income set of people. So, it has to hold true for higher national income set of people also.

Hope it helps

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by VivianKerr » Wed Jul 16, 2014 11:38 pm
The credit care issuers want to make $$. If the provinces USED to be like Lijau, but are now in debt, then it follows Lijau might go the same way. The phrase "three times the national average" is key because it indicates the provinces do NOT save.
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