In the 1970’s there was an oversupply of college graduates. The oversupply caused the average annual income of college

[BTGmoderatorDC]

In the 1970’s there was an oversupply of college graduates. The oversupply caused the average annual income of college graduates to fall to a level only 18 percent greater than that of workers with only high school diplomas. By the late 1980’s the average annual income of college graduates was 43 percent higher than that of workers with only high school diplomas, even though between the 1970’s and the late 1980’s the supply of college graduates did not decrease.

Which of the following, if true, in the late 1980’s, best reconciles the apparent discrepancy described above?


(A) The economy slowed, thus creating a decreased demand for college graduates.

(B) The quality of high school education improved.

(C) Compared to the 1970’s, a greater number of high schools offered vocational guidance programs for their students.

(D) The proportion of the population with at least a college-level education increased.

(E) There was for the first time in 20 years an oversupply of job seekers with only high school diplomas.


OA E

Source: GMAT Prep

[DHRJ007]

Premise says - supply of graduates remained same between 1970's and 1980's but still their pay was 43% higher than diploma holders in 1980's compared to 18% higher pay in 1970's

We have to resolve the paradox ...

We can infer that that either demand of the graduates increased in the timeline or some other factor caused the increase..

Option E clearly says that unprecedented supply of diploma holders have caused the increase in the pay gap between graduates and diploma holders..


ans : E