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Two years ago, the government of Runagia increased by 20

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Two years ago, the government of Runagia increased by 20 [#permalink] New post 25 Jul 2012, 23:31
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69% (01:55) correct 31% (01:36) wrong based on 52 sessions
Two years ago, the government of Runagia increased by 20 percent the government-provided pensions paid to Runagians over 65. The aim of the increase was to stimulate the economy in the rural regions of the country, where most pension recipients live. Statistics, however, show that there has been no increase in economic activity in those regions since then, but that there has been noticeably more spending in the urban areas.

Which of the following, if true, most helps to explain why the increase resulted in the unintended state of affairs described?

A. Until the pensions were increased, many Runagians over 65 in rural regions had been receiving support from their children who live in urban areas.
B. The pensions were increased when the number of people below the poverty level in rural areas of Runagia reached an all-time high.
C. City-dwellers in Runagia rarely travel to rural regions of the country.
D. The Runagian postal system is so inefficient that it can take up to three weeks for pension checks to reach recipients in rural areas.
E. On average, the pensions were higher in rural than in urban areas before the increase.

Quote:
need an explanation for the OA
[Reveal] Spoiler: OA

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Re: Two years ago, the government of Runagia increased by 20 pe [#permalink] New post 25 Jul 2012, 23:47
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Two years ago, the government of Runagia increased by 20 percent the government-provided pensions paid to Runagians over 65. The aim of the increase was to stimulate the economy in the rural regions of the country, where most pension recipients live. Statistics, however, show that there has been no increase in economic activity in those regions since then, but that there has been noticeably more spending in the urban areas.

A discrepancy has been cited,so the correct answer will make sure that both sides of the discrepancy remain valid and that both sides can co-exist.

Which of the following, if true, most helps to explain why the increase resulted in the unintended state of affairs described?

A. Until the pensions were increased, many Runagians over 65 in rural regions had been receiving support from their children who live in urban areas.
The pensioners were receiving support from their children until the hike in the pension. Now, after the hike the children have stopped the money they used to send to their parents and are spending the additional money( besides their money) in their native urban areas. So the economic activity remains same in the rural whereas it increases in the urban because more money is available to urban dwellers. Correct
B. The pensions were increased when the number of people below the poverty level in rural areas of Runagia reached an all-time high.
Doesn't resolve the issue. X.
C. City-dwellers in Runagia rarely travel to rural regions of the country.
Doesn't resolve the issue. X.
D. The Runagian postal system is so inefficient that it can take up to three weeks for pension checks to reach recipients in rural areas.
still they are getting pension after 3 weeks so the activity should increase after 3 weeks. X
E. On average, the pensions were higher in rural than in urban areas before the increase.
Very generic + if the pensions were already higher in rural than in urban then the increase in rural should be more vis-a vis urban.X
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Re: Two years ago, the government of Runagia increased by 20 [#permalink] New post 11 Sep 2012, 20:58
maybeam wrote:
Two years ago, the government of Runagia increased by 20 percent the government-provided pensions paid to Runagians over 65. The aim of the increase was to stimulate the economy in the rural regions of the country, where most pension recipients live. Statistics, however, show that there has been no increase in economic activity in those regions since then, but that there has been noticeably more spending in the urban areas.

Which of the following, if true, most helps to explain why the increase resulted in the unintended state of affairs described?

A. Until the pensions were increased, many Runagians over 65 in rural regions had been receiving support from their children who live in urban areas.
B. The pensions were increased when the number of people below the poverty level in rural areas of Runagia reached an all-time high.
C. City-dwellers in Runagia rarely travel to rural regions of the country.
D. The Runagian postal system is so inefficient that it can take up to three weeks for pension checks to reach recipients in rural areas.
E. On average, the pensions were higher in rural than in urban areas before the increase.

Quote:
need an explanation for the OA


A) if the pension earlier for the citizens was 100 and old people used to spend 120 , they would receive the +20 from their children in urban areas.

Now pension is up to 120, and therefore, the additional 20 bucks now remain with the children in urban areas and hence they tend to spend more now.

Therefore, and increase in spending in urban areas.

HTH !
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Re: Two years ago, the government of Runagia increased by 20   [#permalink] 11 Sep 2012, 20:58
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