Plan: Concerned about the welfare of its senior citizens,

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,

The galloping price hike of the goods.more than the inflation could not get adjusted by the increased pension.
So, (C)

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

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.

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.....

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.

I eliminated A, B & E, and could not decide between C and D.

chose D, because did not consider that the rate of old people who were living below the poverty level, although at a record high, might mean in reality a small proportion of the population.
correct answer C.

why D can't be the answer? please explain.

Well, D is true but indirect in a sense that since citizenry are below the poverty line they have more want and to satisfy this want they spend pension money which is inadequate. See how much indirect cause it is

On the other hand C is so much straightforward since it tells how they are spending money which is not that much sufficient

But in Option C the price increase of the items used by senior citizens could be less than 8%, because it is just mentioned that the rate is higher than inflation. So if it is far less than the % increase of welfare then the argument fails. Can some please explain.

Unlike in assumption type questions, in which "must be true" kind of reasoning needs to be satisfied, in explain discrepency type questions (like this one), one does not need to CONFIRM the result; a statement that COULD be a possible explanation would suffice. Here option C could be a possible explanation (IF the rate of increase of price is high enough so as to offset the effect of pension rise), hence is the right answer.

Responding the following question received in a PM:
"When the argument said that inflation is not much high, then how come few goods of old people got increased?
Doesn't inflation cover the prices of different products/goods?"

The inflation rate is calculated taking into account the price change of a basket of specific items - the basket does not contain ALL the items in the economy, but only some that the economists consider representative of the complete economy. "Few goods of old people" may not be in the basket.

Hi GMATNinja

Can you explain how we ruled out (E)
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Hello adkikani Let me try to explain why E is incorrect if you don't mind.

(E) The most recent pension increase was only the second such increase in the last ten years.

First of all, we are not sure of:
- How much was the initial pension?
- How much did the pension increase for the first time? It may be 5% or it may be 100%

As we are not sure of above information, we cannot conclude that the second increase will not help the senior citizens. The only thing what we know from the passage is that the second increase could have made the life the senior citizens better. If it is not we need to find reasons for the same based on the given information in the passage.

Hope this helps.

Because D actually says that most SC>=65 were u/PL. Therefore, according to D, the financial level of the senior citizens must actually improve. It does not do a bit to explain the conclusion.

And according to me, A could have easily been an assumption for the conclusion.

Even though option C seems to be a good answer among all five options. But even option D is tempting. Can you tell me why we ruled out option D?

Hello,
My honorable instructor,
In the argument, then word "many" may indicate 80 senior citizens out of 100 people. But in the answer choice (C), "many" could be 79 senior citizens out of 100. So, how C will show it's reasoning that WHY this 1 (80-79=1) senior citizen is still financially no better off?
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Hello, Asad. I think you read over the no in no better off, which indicates that most senior citizens are not better off than they were before. It does not matter whether one senior citizen is, in fact, better off, since the majority are worse for wear, so to speak.

Please let me know if you have further questions.

- Andrew
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