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Director
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Ronald: According to my analysis of the national economy, [#permalink]
 28 Apr 2007, 07:22
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Ronald: According to my analysis of the national economy, housing prices should not increase during the next six months unless interest rates drop significantly.
Mark: I disagree. One year ago, when interest rates last fell significantly, housing prices did not increase at all.
It can be inferred from the conversation above that Mark has interpreted Ronald’s statement to mean that
(A) housing prices will rise only if interest rates fall
(B) if interest rates fall, housing prices must rise
(C) interest rates and housing prices tend to rise and fall together
(D) interest rates are the only significant economic factor affecting housing prices
(E) interest rates are likely to fall significantly in the next six months
PLEASE EXPLAIN THE ANSWER
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Re: CR1000 - HOUSING PRICE [#permalink]
28 Apr 2007, 07:34
vshaunak@gmail.com wrote: Ronald: According to my analysis of the national economy, housing prices should not increase during the next six months unless interest rates drop significantly.
Mark: I disagree. One year ago, when interest rates last fell significantly, housing prices did not increase at all.
It can be inferred from the conversation above that Mark has interpreted Ronald’s statement to mean that
(A) housing prices will rise only if interest rates fall
This statement means that the rise of housing prices and the fall on interest rates are proporsonal and that is not correct. So eliminate it
(B) if interest rates fall, housing prices must rise
Same as A. So eliminate
(C) interest rates and housing prices tend to rise and fall together
This statement says that when housing prices rises then interest rates also rises and vice-a-versa. So eliminate
(D) interest rates are the only significant economic factor affecting housing prices
This is correct choice
(E) interest rates are likely to fall significantly in the next six months
This choice is irrelavent and doest not serve to solve any thing. So eliminate this choice PLEASE EXPLAIN THE ANSWER
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A - Mark doesn't talk about a possible case where without interest rates falling, housing price increased. So, we can assume that Mark didn't interpret Ronald's statement this way.
B - Mark does seem to contradict: "if interest rates fall, housing price must rise" (As in the example from one year ago). So this can be correct.
C - This is stupid
D - Again, Mark doesn't talk about other significant economic factors affecting housing prices. So, we can't assume that Mark interpreted Ronald's statement to mean that interest rates are the only significant economic factor affecting housing prices
E - This is stupid
So, my answer, B
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Director
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Re: CR1000 - HOUSING PRICE [#permalink]
28 Apr 2007, 09:36
I chose D first...but agree with Mneo...it has to be B.
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another B
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