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# Economists have historically embraced the idea that trade between nat

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Joined: 21 May 2017
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14 Oct 2018, 00:32
00:00

Difficulty:

65% (hard)

Question Stats:

56% (02:08) correct 44% (02:39) wrong based on 116 sessions

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Economists have historically embraced the idea that trade between nations is the only means of increase in nation’s wealth. The increase in per capita income, which is the primary indicator of increase in a nation’s wealth, however is same for nations that have actively engaged international trade as those that instead focus on improving the overall education level of their citizens.

Which of the following can be inferred based on the statements above?

A
Economists’ idea that trade between nations is the only means to increase wealth of nations is flawed.

B
The nations that focus on trade are no more wealthy on average than the nations that focus on increasing the overall education level of its citizens.

C
A nation that focuses on both trade and improving its citizen’s educational outcomes is not more wealthy than one that focuses on either trade or improving education.

D
Citizens of nations that focus on increase in trade do not in turn focus on improving their education levels.

E
Companies of nations that focus on improving the educational level of its citizens do not derive a greater proportion of their revenue from exports than companies of nations that focus more on export
Director
Joined: 20 Sep 2016
Posts: 589
Re: Economists have historically embraced the idea that trade between nat  [#permalink]

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15 Oct 2018, 21:34
Economists have historically embraced the idea that trade between nations is the only means of increase in nation’s wealth. The increase in per capita income, which is the primary indicator of increase in a nation’s wealth, however is same for nations that have actively engaged international trade as those that instead focus on improving the overall education level of their citizens.

Analysis-
> Per capita income( indicator of nation wealth) for country engaging in trade SAME for country which focuses on education level.

Which of the following can be inferred based on the statements above?
- inference

Thinking:
2+2 inference( sum up statement and make 1 statement)
1. Only means
2. Other means too
Inference- 1 is not entire true.

A
Economists’ idea that trade between nations is the only means to increase wealth of nations is flawed.
- CORRECT- explanation above.

B
The nations that focus on trade are no more wealthy on average than the nations that focus on increasing the overall education level of its citizens.
- the passage has mentioned " INCREASE in wealth" not the " wealth of the country"..the country can be wealthy evne with low growth- Out of scope

C. A nation that focuses on both trade and improving its citizen’s educational outcomes is not more wealthy than one that focuses on either trade or improving education.
- AGAIN- passage talks about "increase in wealth and means to increase"...the actual wealth is not discussed- out of scope.

D
Citizens of nations that focus on increase in trade do not in turn focus on improving their education levels.- WRONG- they can focus ...we don't know

E. Companies of nations that focus on improving the educational level of its citizens do not derive a greater proportion of their revenue from exports than companies of nations that focus more on export
- derivation of income from types of sources is not discussed- out of scope.

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Re: Economists have historically embraced the idea that trade between nat  [#permalink]

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16 Oct 2018, 04:13
zac123 wrote:
Economists have historically embraced the idea that trade between nations is the only means of increase in nation’s wealth. The increase in per capita income, which is the primary indicator of increase in a nation’s wealth, however is same for nations that have actively engaged international trade as those that instead focus on improving the overall education level of their citizens.

Which of the following can be inferred based on the statements above?

A
Economists’ idea that trade between nations is the only means to increase wealth of nations is flawed.

B
The nations that focus on trade are no more wealthy on average than the nations that focus on increasing the overall education level of its citizens.

C
A nation that focuses on both trade and improving its citizen’s educational outcomes is not more wealthy than one that focuses on either trade or improving education.

D
Citizens of nations that focus on increase in trade do not in turn focus on improving their education levels.

E
Companies of nations that focus on improving the educational level of its citizens do not derive a greater proportion of their revenue from exports than companies of nations that focus more on export

Premises:
Economists believe that trade between nations is the only means of increasing nation’s wealth.
The increase in per capita income, the primary indicator of increase in a nation’s wealth, however is same for nations with international trade vs those improving education.

We need to find the inference.

A
Economists’ idea that trade between nations is the only means to increase wealth of nations is flawed.

The argument tells us that economists believe ONLY trade works to increase wealth. But education also seems to be having the same effect. Hence, the economist's idea does seem to be flawed. Correct.
Note that we do need to take premises to be true. The premise is that "Economists believe trade between nations is the only means of increasing wealth". The premise is not that "trade between nations is the only means of increasing wealth". It is true that economists believe this. Whether what economists believe is actually true or not is open to discussion.

B
The nations that focus on trade are no more wealthy on average than the nations that focus on increasing the overall education level of its citizens.

The argument discusses "increase in wealth" only. We have been given no parameters to discuss "wealth" of one nation against another. Irrelevant.

C
A nation that focuses on both trade and improving its citizen’s educational outcomes is not more wealthy than one that focuses on either trade or improving education.

Again, the argument discusses "increase in wealth" only. We have been given no parameters to discuss "wealth" of one nation against another. Irrelevant.

D
Citizens of nations that focus on increase in trade do not in turn focus on improving their education levels.

This has not been implied in the argument. It is possible that some nations that focus on trade, focus on education too.

E
Companies of nations that focus on improving the educational level of its citizens do not derive a greater proportion of their revenue from exports than companies of nations that focus more on export

The argument does not tell us anything about how revenues are derived. Irrelevant.

_________________

Karishma
Veritas Prep GMAT Instructor

Re: Economists have historically embraced the idea that trade between nat   [#permalink] 16 Oct 2018, 04:13
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