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A study separated all of the Saradian firms in a certain industry into two groups. The first group consisted of firms that have the largest proportion of clients outside of Saradia, and the second consists of those with the smallest proportion of such clients. The first group showed a much larger increase in sales over the five-year span in which in the firms were studied. The effect was attributed to the weakness of the Sarade, the currency of Saradia.
Which of the following, if true, would best help explain how the weakness of the Sarade might result in the observed effect?
(A) Each year in the five-year span, the Sarade got weaker relative to the Euro.
(B) When a country's currency is weak, goods sold by firms in that country are relatively inexpensive to customers who reside in countries with stronger currencies.
(C) The weakness of the Sarade caused Saradia's national bank to raise interest rates, making it more expensive for Saradian firms to raise money to fund expansion.
(D) The Sarade is the main currency of the region, so fluctuations in exchange rates affect several neighboring countries in addition to Saradia.
(E) The firms involved in the study were not notified that the study was taking place until after the five-year span was complete.
Which of the following, if true, would best help explain how the weakness of the Sarade might result in the observed effect?
(A) Each year in the five-year span, the Sarade got weaker relative to the Euro.
(B) When a country's currency is weak, goods sold by firms in that country are relatively inexpensive to customers who reside in countries with stronger currencies.
(C) The weakness of the Sarade caused Saradia's national bank to raise interest rates, making it more expensive for Saradian firms to raise money to fund expansion.
(D) The Sarade is the main currency of the region, so fluctuations in exchange rates affect several neighboring countries in addition to Saradia.
(E) The firms involved in the study were not notified that the study was taking place until after the five-year span was complete.
02 Jul 2022, 19:00
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Bunuel
A study separated all of the Saradian firms in a certain industry into two groups. The first group consisted of firms that have the largest proportion of clients outside of Saradia, and the second consists of those with the smallest proportion of such clients. The first group showed a much larger increase in sales over the five-year span in which in the firms were studied. The effect was attributed to the weakness of the Sarade, the currency of Saradia.
Which of the following, if true, would best help explain how the weakness of the Sarade might result in the observed effect?
(A) Each year in the five-year span, the Sarade got weaker relative to the Euro.
(B) When a country's currency is weak, goods sold by firms in that country are relatively inexpensive to customers who reside in countries with stronger currencies.
(C) The weakness of the Sarade caused Saradia's national bank to raise interest rates, making it more expensive for Saradian firms to raise money to fund expansion.
(D) The Sarade is the main currency of the region, so fluctuations in exchange rates affect several neighboring countries in addition to Saradia.
(E) The firms involved in the study were not notified that the study was taking place until after the five-year span was complete.
Which of the following, if true, would best help explain how the weakness of the Sarade might result in the observed effect?
(A) Each year in the five-year span, the Sarade got weaker relative to the Euro.
(B) When a country's currency is weak, goods sold by firms in that country are relatively inexpensive to customers who reside in countries with stronger currencies.
(C) The weakness of the Sarade caused Saradia's national bank to raise interest rates, making it more expensive for Saradian firms to raise money to fund expansion.
(D) The Sarade is the main currency of the region, so fluctuations in exchange rates affect several neighboring countries in addition to Saradia.
(E) The firms involved in the study were not notified that the study was taking place until after the five-year span was complete.
OFFICIAL EXPLANATION
B
This explanation question doesn't have an obvious discrepancy in the passage (as many do), so it's important to focus on what needs to be differentiated. The weakness of the currency must have a positive effect on firms with more clients outside of Saradia and a different effect on those with fewer.
Choice (A) is irrelevant, and while we're at it, (D) is too. We're concerned only with how the currency affects companies inside Saradia, and neither choice provides any information why that might be so. Choice (B) is much better. We know the Sarade is weak, so this choice is pertinent; it further explains that goods sold by Saradian firms would be inexpensive (i.e., more desirable) to buyers in countries with stronger currencies. That explains why the difference is between companies that do more and less business outside of Saradia.
Choice (C) explains an effect of the currency weakness, but not one that would affect some Saradian firms but not others. Choice (E) doesn't explain anything, except for eliminating the possibility that firms were somehow making decisions because of their inclusion in the study. Choice (B) is correct.
