Vercules wrote:
The economic recession of the last year has prompted many organizations to make a large number of publicized layoffs, resulting in thousands of lost jobs. Analysts predicted that these layoffs would cause people generally to cut back on their discretionary spending even if their jobs were secure, in antici pation 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.
The answer to which of the following questions would be most useful in evaluating the significance of the savings patterns described above?
A) What business sectors were most affected by the layoffs?
B) How much of their savings, on average, do laid-off employees deplete before finding new employment?
C) What has been the percent increase in the cost of necessities such as food, housing, and utilities during the period since the layoffs?
D) What percentage of people laid off have savings accounts?
E) What has been the average salary during the period since the layoffs?
This type of question can be handled as follows:
Step 1: Identifying the premise and the conclusion
Prediction: layoffs would cause people to cut back on their discretionary spending even if their jobs were secure, in anticipation of coming hard times
Fact : But there has been no increase in the amount of money set aside by the general public in savings accounts.
The above prediction and fact can be restated as premise and conclusion as follows:
Premise : there has been no increase in the amount of money set aside by the general public in savings accounts.
Conclusion: layoffs did not cause people to cut back on their discretionary spending in anticipation of coming hard times
Step 2 - Finding the type of question:
The question asks how important is the explanation that layoffs would cause people to cut back on their discretionary spending? The conclusion in step 1 says that the explanation was not significant. We are always looking for something that strengthens the conclusion. So the question effectively is
which choice strengthens the fact that the explanation was not significant i.e., people would not cut back on the discretionary spendingStep 3: Finding the right choice
Since this is treated as a strengthen question, the next step is to negate each choice and see which (i) weakens the premise or (ii) negates the conclusion underlined in step 2.
Choice C seems best because if you negate it which is, " There has been no increase in the cost of necessities during the period since the layoffs" means people have money to save and that might as predicted make them to save for future security by cutting on their discretionary spending. Thus the negation satisfies (i) above i.e., weakens the premise.
None of the other choices do the above.
Therefore the answer is choice C.
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