my take C
because Analysts 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.

so knowing C will help us to evaluate as in we can know if at all they were in position to save money in first place

The argument is based on the entire set of people - employed and unemployed as indicated by the line "even if their job was secure" where as B just addresses the unemployed people. Hence it cant be the right choice.

I think C is correct as it clearly gives a reason as to why people may not have saved.

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 spending


Step 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.
_________________

Srinivasan Vaidyaraman
sravna@gmail.com

Sravna Test Prep
http://www.sravna.com

Hi Folks,

Updated the post with OA and OE.

The conclusion of the argument is that the prediction of decreased consumer spending has not come to pass. The evidence for this is that there has been no corresponding increase in the amount of money set aside in savings accounts by the general public. This question asks us to choose a question whose answer will provide information relevant to evaluating the significance of the fact that the amount of money placed in savings accounts has not increased. The author mentions this savings pattern to support the claim that people have not been cutting their discretionary spending. So we need to find a question whose answer will relate to savings and spending patterns.

A) What business sectors were most affected by the layoffs?

Information about which business sectors were most affected by the layoffs will not help us establish the relevance of the savings pattern to the claim.

B) How much of their savings, on average, do laid-off employees deplete before finding new employment?

The savings used by those who are laid off has no bearing on the savings patterns of those who are not laid off, which is the group this argument addresses ("even if their jobs were secure").

C) 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 question asks about the prices of necessities such as food and utilities. If people have not been saving their money, perhaps they have been spending it on necessities (as opposed to spending it on discretionary items). If these items have become more expensive, then perhaps people have not been able to save money despite cutting their discretionary spending.

D) What percentage of people laid off have savings accounts?

The percentage of people with savings accounts is not related to the question of whether people have curtailed their discretionary spending or increased the amount they save.

E) What has been the average salary during the period since the layoffs?

Knowing the statistics for average salaries during the period since the layoffs will not help us evaluate the significance of the spending and savings patterns during that time. It might help to be able to compare the statistics for the periods before and after the layoffs, but knowing just one of those statistics tells us nothing about the trends.

Vercules
_________________

Press Kudos if you want to say thanks

Ultimate Reading Comprehension Encyclopedia | Ultimate Sentence Correction Encyclopedia | GMAT Prep Software Analysis and What If Scenarios -- VERBAL | GMAT Prep Software Analysis and What If Scenarios -- IR

Please Read and Follow the 9 Rules of Posting in Verbal Forum