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Plan: Concerned about the welfare of its senior citizens,

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Plan: Concerned about the welfare of its senior citizens, [#permalink] New post 03 Aug 2012, 15:46
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Question Stats:

83% (02:24) correct 17% (01:39) wrong based on 379 sessions
Plan: Concerned about the welfare of its senior citizens,
the government of Runagia decided two years ago to
increase by 20 percent the government-provided
pension paid to all Runagians age sixty-five and older.
Result: Many Runagian senior citizens are no better off
financially now than they were before the increase.
Further information: The annual rate of inflation since
the pension increase has been below 5 percent, and
the increased pension has been duly received by all
eligible Runagians.

In light of the further information, which of the
following, if true, does most to explain the result that
followed implementation of the plan?

(A) The majority of senior citizens whose financial
position has not improved rely entirely on the
government pension for their income.

(B) The Runagian banking system is so inefficient
that cashing a pension check can take as much
as three weeks.

(C) The prices of goods and services that meet the
special needs of many senior citizens have
increased at a rate much higher than the rate of
inflation.

(D) The pension increase occurred at a time when
the number of Runagians age sixty-five and older
who were living below the poverty level was at
an all-time high.

(E) The most recent pension increase was only the
second such increase in the last ten years.
[Reveal] Spoiler: OA
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Re: Plan: Concerned about the welfare of its senior citizens [#permalink] New post 03 Aug 2012, 17:54
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Hi Betterscore,

Despite the oddness of the question stem and the unusual formatting of the stimulus, we shouldn't be concerned. Reading and identifying the question stem makes it clear that this is an "explain" type question, which means that there is a mystery or contradiction that we are attempting to resolve. The question stem also tells us WHAT that mystery is: why did this plan did not result in what was expected?

So, we should untangle the stimulus. What's the mystery of the plan? Well, the elderly citizens of Runagia are getting substantially more pension money. But, this money isn't actually helping them! They are no better off.

When you predict an answer to an explain question (and you should always predict the answer!), sometimes a single solution will leap into your head, but other times multiple resolutions present themself. On first read through, I immediately thought of two explanations: 1) the pensions make up way too small a proportion of Runagian retirement plans to help, so the increase is useless, or 2) some expense, tax, or lifestyle change offset the extra money.

With a few well-thought, if loose, predictions, we can move to the final step: evaluating the answer choices. Sure enough, (C) matches our prediction exactly, and is the correct answer. Note that our other prediction wasn't useless; it is 180 degrees the opposite of (A), letting us quickly rule out this potentially distracting trap answer!

Thanks for posting this question, and good luck on your studies!

Regards,

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Re: Plan: Concerned about the welfare of its senior citizens [#permalink] New post 03 Aug 2012, 20:58
The galloping price hike of the goods.more than the inflation could not get adjusted by the increased pension.
So, (C)

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Re: Plan: Concerned about the welfare of its senior citizens [#permalink] New post 04 Aug 2012, 04:02
IS this a new Question Type ?
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Re: Plan: Concerned about the welfare of its senior citizens [#permalink] New post 04 Aug 2012, 12:07
Expert's post
mandyrhtdm wrote:
IS this a new Question Type ?

This is a classic Explain question. The formatting of it is a little unusual, but the GMAT throws curveballs from time to time!

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Re: Plan: Concerned about the welfare of its senior citizens, [#permalink] New post 01 Dec 2013, 15:15
Can some one shed some light on A again ?
Why is A eliminated ?
It seems that persons whose sole source of income is pension will not be better off than those who have multiple sources of income. So A can still play a role in explaning the paradox.

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Re: Plan: Concerned about the welfare of its senior citizens, [#permalink] New post 27 Dec 2013, 02:45
prepat wrote:
Can some one shed some light on A again ?
Why is A eliminated ?
It seems that persons whose sole source of income is pension will not be better off than those who have multiple sources of income. So A can still play a role in explaning the paradox.


Hey There,

Option A just says that the only source of income for pensioners is government pension and it is not enough to bridge the gap between pension amount increase and financial improvement.

So, it is eliminated by PoE. Hope this helps.

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Re: Plan: Concerned about the welfare of its senior citizens, [#permalink] New post 27 Dec 2013, 09:06
Correct ans C . Though the the annual rate of inflation, since the pension increase has been below 5 percent, the special needs of the elderly have risen at a higher rate than the overall inflation. Therefore, it explains the discrepancy.....
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Re: Plan: Concerned about the welfare of its senior citizens, [#permalink] New post 28 Dec 2013, 11:20
prepat wrote:
Can some one shed some light on A again ?
Why is A eliminated ?
It seems that persons whose sole source of income is pension will not be better off than those who have multiple sources of income. So A can still play a role in explaning the paradox.



I will try.

Lets say their monthly expenses were $10 and they received pension of $9. So their present financial condition is in bad shape. Now there is a 20% increase in $9 pension so $10.80. So we can assume their financial position has got better. But the question says their financial position is no better than before. For this the expenses also has to rise. Hence choice C.
Re: Plan: Concerned about the welfare of its senior citizens,   [#permalink] 28 Dec 2013, 11:20
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