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# Concerned about financial well-being of its elderly

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15 Jul 2006, 01:52
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Concerned about financial well-being of its elderly citizens, the government of Runagia decided two years ago to increase by 20 percent the government-provided pension paid to all Runagians over 65. Inflation in the intervening period has been negligible, and the increase has been duly received by all eligible Runagians. Nevertheless, many of them are no better off financially than they were before the increase, in large part because ________.

Which of the following most logically completes the passage?

A. They rely entirely on the government pension for their income
B. Runagian banks are so inefficient that it can take up to three weeks to cash a pension check
C. They buy goods whose prices tend to rise especially fast in times of inflation
D. The pension was increased when the number of elderly Runagians below the poverty level reached an all-time high
E. In Runagia children typically supplement the income of elderly parents, but only by enough to provide them with a comfortable living
[Reveal] Spoiler: OA

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15 Jul 2006, 03:28
Ans is C.
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15 Jul 2006, 06:02
I choose A.
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15 Jul 2006, 06:10
bpattnaik wrote:
Ans is C.

The passage states that inflation was negligible, so this appears to be irrelevant.

What if the original pension was a meager $100 a month. If the COL in Runagia is equal to that of the USA, then obviously$120 a month really isnt going to make a big difference.

(A)

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15 Jul 2006, 12:14
A. possible, but kind of strong in its word usage..."rely entirely" will keep for now and see if a better one appears...

B. out of scope, never does the passage mention banks...

C. buying stuff that rises with inflation, but in the passage it states the inflation issue. "It has been negligible"

D. possible, because if the new program came into effect when the poverty was an all time low, the program may not have helped much in improving the financial state of the elderly.

E. definetly out of scope...don't care.

Down to A and D...

because the final statement states:
Nevertheless, many of them are no better off financially than they were before the increase, in large part because ________.
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15 Jul 2006, 16:37
I second to (D). great explaination. acfuture.
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15 Jul 2006, 17:06
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children supplement the income of elderly parents by just enough to provide the parents a comfortable living. So, if the pension amount has increased, the amount of money these elderly people receive from their kids would decrease. So, overall they would still be getting the same money.
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15 Jul 2006, 18:36
I choose E. I almost had to guess on this one but I just had a moment of clarity. As shoonya correctly point out: children only supply enough to provide their parents with a comfortable living...this implies that they will reduce their giving appropriately thereby leaving their parents at the same utility level.
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15 Jul 2006, 20:18
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A. They rely entirely on the government pension for their income

======> If they rely entirely on pension then 20% increase will be helpful, even if its a little help.

B. Runagian banks are so inefficient that it can take up to three weeks to cash a pension check

======> Then the cycle should be same.

C. They buy goods whose prices tend to rise especially fast in times of inflation

======> As stated in passage, inflation is negligible.

D. The pension was increased when the number of elderly Runagians below the poverty level reached an all-time high

======> Even if number of people are more everybody is getting the increased amount. As passage says "...paid to all Runagians over 65"

E. In Runagia children typically supplement the income of elderly parents, but only by enough to provide them with a comfortable living

======> CORRECT. This means children have reduced their support and the increase in pension was offset by decrease in support by children. Why children are decreasing the support? See the bold part in E.
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16 Jul 2006, 00:02
ps_dahiya wrote:
A. They rely entirely on the government pension for their income

======> If they rely entirely on pension then 20% increase will be helpful, even if its a little help.

B. Runagian banks are so inefficient that it can take up to three weeks to cash a pension check

======> Then the cycle should be same.

C. They buy goods whose prices tend to rise especially fast in times of inflation

======> As stated in passage, inflation is negligible.

D. The pension was increased when the number of elderly Runagians below the poverty level reached an all-time high

======> Even if number of people are more everybody is getting the increased amount. As passage says "...paid to all Runagians over 65"

E. In Runagia children typically supplement the income of elderly parents, but only by enough to provide them with a comfortable living

======> CORRECT. This means children have reduced their support and the increase in pension was offset by decrease in support by children. Why children are decreasing the support? See the bold part in E.

"comfortable" in E seems very vague. One mans comfort is another man`s luxury...
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16 Jul 2006, 00:15
Agree with shoonya and ps_dahiya's explanations.
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16 Jul 2006, 15:29
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Gauss wrote:
Concerned about financial well-being of its elderly citizens, the government of Runagia

decided two years ago to increase by 20 percent the government-provided pension

paid to all Runagians over 65. Inflation in the intervening period has been negligible,

and the increase has been duly received by all eligible Runagians. Nevertheless,

many of them are no better off financially than they were before the increase, in large

part because ________.

Which of the following most logically completes the passage?

A. They rely entirely on the government pension for their income

B. Runagian banks are so inefficient that it can take up to three weeks to cash a pension check

C. They buy goods whose prices tend to rise especially fast in times of inflation

D. The pension was increased when the number of elderly Runagians below the poverty level reached an all-time high

E. In Runagia children typically supplement the income of elderly parents, but only by enough to provide them with a comfortable living

My choice is E.
A: Even if they rely entirely on the govenrnment, if the pension has increased by 20%, they should be getting 20% more, so they should be better of.
B: Irrelevant. It clearly says that the pension was received.
C: Irrelevant. It clearly says inflation was negligible
D: So what? 20% increase is a 20% increase.
E: In the beginning they received 10 dollars from Government. Children gave them 5 dollars more to live comfortably. Then Government gave them 2 dollars more. Children now gave them 3 dollars to live comfortably. At the end of the day they still had the same, and therefore were no better off than before.
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17 Jul 2006, 08:45
OA E
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17 Jul 2006, 12:03
ps_dahiya wrote:
A. They rely entirely on the government pension for their income

======> If they rely entirely on pension then 20% increase will be helpful, even if its a little help.

B. Runagian banks are so inefficient that it can take up to three weeks to cash a pension check

======> Then the cycle should be same.

C. They buy goods whose prices tend to rise especially fast in times of inflation

======> As stated in passage, inflation is negligible.

D. The pension was increased when the number of elderly Runagians below the poverty level reached an all-time high

======> Even if number of people are more everybody is getting the increased amount. As passage says "...paid to all Runagians over 65"

E. In Runagia children typically supplement the income of elderly parents, but only by enough to provide them with a comfortable living

======> CORRECT. This means children have reduced their support and the increase in pension was offset by decrease in support by children. Why children are decreasing the support? See the bold part in E.

Wow... good one I selected D
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17 Jul 2006, 22:27
E for me
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19 Jul 2006, 05:34
Good explanation shoonya
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18 Oct 2013, 12:22
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21 May 2016, 14:08
Iffy. Answer E very vaguely implies that they children would stop supporting the elders after they received income from another source. And this is knowing after the fact that E is the answer.

Further more "are no better off financially..." is vague. I can be poor and make 50$a month and the government. 20% increase to 60$ and i'm still poor, the increase of money does not necessarily mean I'm better off financially... If more explicit words were used, such as "income" it would clarify things a bit more.
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07 Jan 2017, 21:44
Answer should be confined only to the pensioners not to their offspring. I humbly think that question of reduction in children's contribution is not relevant enough. Firstly, it is quite out of scope. Secondly, if it is supposed that the children are rather poor, their contribution is not at all likely to merit consideration; and, on the other hand, if it is supposed that children concerned are fairly rich, their contributions are not likely to come down in response to the rise in pension by the government. So, this particular issue is valid only if the children belong to either the lower middle class or the middle class. It, therefore, should better be regarded "out of scope". Moreover, many facts can be raised, quite a few government pensioners are not likely to have considerate children, some pensioners may not be without any family and in some cases, some pensioners may have to contribute to the well being of their unfortunate children. So, this particular option (E) deserves to be disregarded. [It can be option C (but for that passage must be stated "inflation not as negligible")]
Re: Concerned about financial well-being of its elderly   [#permalink] 07 Jan 2017, 21:44

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