Link between inflation and increase in the budget

[Julos]

Hi there,

I have a question concerning this exercise please :

During the incumbent president's term of office he succeeded in limiting annual increases in the defense budget by an average of 5 percent. His predecessor experienced annual increases of 8 percent. Therefore, the incumbent president should be given credit for the downturn in defense outlays.

Which of the following statements, if true, would most seriously weaken the above conclusion ?


The answer is :

(D) The average annual inflationn rate during the incumbent president's term was 4%, while during his predecessor's it was 10%.

But I dont understand the following explanation :

If inflation averaged 4 percent and spending increased 5 percent, the real value of defense outlays actually increased 25 percent. During the former president's term, outlays actually declined faster than inflation, indicating a real decrease of 25 percent.

I can't find the 25 percent... Thanks for the help

[coderversion1]

So we need to choose an answer which shows that incumbent president should NOT be given credit for the downturn in defense outlays. You have already done that.

It appears completely appropriate. Although predecessor had 8% annual increase in defense budgets, it was lower than the inflation. Which is quite an achievement compared to the incumbent president who's defense increase rate is higher than the current inflation, which is not an achievement compared to the predecessor. Simple.

I feel we make mistakes in CR questions if we over-think them.

[Julos]

Alright thank you for the answer codeversion1. As you said, what is important should be the comparison between the annual increase and the inflation.

Cheers