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The downturn in the economy last year has prompted many

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Re: The downturn in the economy last year has prompted many [#permalink]

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New post 25 Jun 2012, 06:24
Correct answer is C.

It provides an alternative explanation to why savings rate are not going up, i.e. possibly because prices of food and other necessities are going up, people are using monies that could have been saved for this increased expenditures.

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Re: The downturn in the economy last year has prompted many [#permalink]

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New post 25 Jun 2012, 06:32
You can rule out B just by reading the stem: The answer to which of the following questions would be most useful in evaluating the significance of the savings patterns described above?

Answer B doesn't even address the savings pattern.

Correct answer should be C.
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New post 14 Sep 2014, 03:58
The downturn in the economy last year has prompted many companies to make widely publicized layoffs, resulting
in thousands of lost jobs. Economists predicted that these layoffs would cause people generally to cut back on their
discretionary spending, even if their jobs were secure, in anticipation of coming hard times. However, this prediction
has not come to pass, since there has been no increase in the amount of money set aside by the general public in
savings accounts.

Which one of the following is an assumption on which the argument depends?

a) The economy has not improved in recent months.
b) There has been no increase in the amount of money invested in stocks, certificates of deposit, or other savings
vehicles.
c) Salaries have decreased as a result of the economic downturn.
d) No business sectors have seen growth in recent months.
e) Those who were laid off have been able to find other employment.
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Re: The downturn in the economy last year has prompted many [#permalink]

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New post 14 Sep 2014, 06:57
Hi Thanks for sharing the question.
My 2 cents.
The downturn in the economy last year has prompted many companies to make widely publicized layoffs, resulting in thousands of lost jobs.

Economists predicted:layoffs would cause people generally to cut back on their discretionary spending even if their jobs were secure, in anticipation of coming hard times.
(Conc:)this prediction has not come to pass,
(Why?)since there has been no increase in the amount of money set aside by the general public in savings accounts.
Assumption: There is no factor that is eating their saving.

The answer to which of the following questions would be most useful in evaluating the significance of the savings patterns described above?

What business sectors were most affected by the layoffs?
How much of their savings, on average, do laid-off employees deplete before finding new employment?
What has been the percent increase in the cost of necessities such as food, housing, and utilities during the period since the layoffs?
What percentage of people laid off have savings accounts?
What has been the average salary during the period since the layoffs?

B Vs C:
How much of their savings, on average, do laid-off employees deplete before finding new employment?
>> Two points why C is better than B: a: average & b:laid-off employees.
Prediction is abt the general public not only abt a specific segment. Second, average doesn't give required info abt peoples' saving behavior. It's just that some ppl's saving depletion was below average and some above.
What has been the percent increase in the cost of necessities such as food, housing, and utilities during the period since the layoffs?
>>Correct .This will answer whether is any factor that is eating their saving.
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Re: The downturn in the economy last year has prompted many   [#permalink] 14 Sep 2014, 06:57

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