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# A recent report on housing shows that as the value of the

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A recent report on housing shows that as the value of the [#permalink]

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08 Oct 2005, 04:00
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A recent report on housing shows that as the value of the stock market rises there should be a rise in the number of homes built and first-time homeowners which follows a general pattern. However, a look at the economy and the real estate market shows that the periods of increased growth and homeownership do not correspond to rises in the stock market in any identifiable pattern.

Which statement, if true, offers the best partial explanation of this discrepancy?

(A) The stock market has had a difficult time in the past decade.
(B) The decision to buy a first home is often influenced by factors such as deciding to have a baby.
(C) When the stock market is doing well and the economy is on the rise, more people buy houses.
(D) When the stock market falls, people are too worried about the economy to think about making major purchases.
(E) The decision to buy a first home is influenced by whether a family has a successful stock portfolio.
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08 Oct 2005, 06:28
We are looking for something, which explains the discrepancy between the report and the reality.
C), D), and E) all reinforce the pattern
A) does nothing...

B) stays... possible explanation, why the pattern is not observed... what do you guys think?
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08 Oct 2005, 06:30
Clearly, B is the best choice. It suggests that apart from stock market or economy, there are other factors that influence the decision making process of house-owners.
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08 Oct 2005, 08:51
B for me as well

It's the only answer choice that offers an alternative explanation for why people buy homes
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08 Oct 2005, 23:08

OA is B.
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09 Oct 2005, 23:12
Looking for an answer choice that tells us that there are other reasons why the stock market and the housing increases do not correspond.

B does this for us.

GMATT73 wrote:
A recent report on housing shows that as the value of the stock market rises there should be a rise in the number of homes built and first-time homeowners which follows a general pattern. However, a look at the economy and the real estate market shows that the periods of increased growth and homeownership do not correspond to rises in the stock market in any identifiable pattern.

Which statement, if true, offers the best partial explanation of this discrepancy?

(A) The stock market has had a difficult time in the past decade.
(B) The decision to buy a first home is often influenced by factors such as deciding to have a baby.
(C) When the stock market is doing well and the economy is on the rise, more people buy houses.
(D) When the stock market falls, people are too worried about the economy to think about making major purchases.
(E) The decision to buy a first home is influenced by whether a family has a successful stock portfolio.
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09 Oct 2005, 23:17
I got B too
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10 Oct 2005, 02:23
OA is B.

OE:

Step 1: ID Question Type and Task

Step 2: Read the Argument and Extract Necessary Information:
The necessary information is the paradox, identify the paradox and pose it to yourself as a question.

Paradox: Why would what is expected from the report not be the case?

Step 3: Formulate an Answer to the Question
Formulate a resolution to the paradox (if possible).

Remember, the best answer provides a connection between the two sides of the paradox without changing or discounting either side.

(A) Eliminate. This is contradicted by the info in the passage.

(B) Keep. This could explain why the pattern that was expected didn`t occur because of other factors.

(C) Eliminate. This exacerbates the paradox by implying a reason why the expected pattern should have been present.

(D) Eliminate. The paradox is concerned about the pattern during growth, not decline.

(E) Eliminate. This exacerbates the paradox by implying that there is a relationship between the stock and real estate markets.

Step 5: Identify differences in remaining choices

(B) is the only remaining choice and is the correct answer.
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18 Oct 2005, 11:29
I think the answer should be E as the resolving of a paradox implies successfully reconciling both the sides i.e., both the views should be explained.

A doesn't do that because it explains only the second part. E does it successfully by supporting the report as well as the reality. It supports the report because when the stock market is on the rise it is likely that many have successful portfolio performance and hence as given buy house for the first time. It also accomodates the reality because the reverse may not be true i.e., whenever people decide to buy home for the first time it maynot be always because of a successful portfolio and hence no predictable pattern if you look at that way.
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18 Oct 2005, 11:36
Well, sravana:-

If the questions was:-

"Which of the following supports the conclusion the best" E would have been a contender. But the question is not asking to give an evidence that further strengthens the conclusion. It is asking us to resolve the apparent discerpancy. This is best done by B.

What do u say?
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18 Oct 2005, 12:15
Amy, I think it is a more or less asking the same question in a different way. That is satisfying that there is consistency between both the parts of the argument. I agree that B is not inconsistent but the same can be said of E too and it goes further than that by explaining the first part (though not required). But that doesn't rule it out as a possible choice.
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18 Oct 2005, 12:35
Okay, I see ur point. The explanation for the paradox should bridge that gap between the hypothetical situation and the reality right?

The reason should not change the hypothetical situation as well as the reality. But it should also resolve the questions between them.

But even then,

- E merely states the report once again. It just says that the decision to buy a home is influenced by the familyâ€™s stock portfolio. Okay if this so then the question still remains â€¦Why are the numbers in reality not indicating the sameâ€
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18 Oct 2005, 12:51
Agree with B here.
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18 Oct 2005, 12:52
Well, the argument only correlates the two parts that is, the rise in the stock market and the rise in the number of first-time homeowners. E actually gives a "reason" for that by saying that people are actually influenced by performance of their stock porfolio. There can also be misleading correlations, right?
18 Oct 2005, 12:52
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