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Evaluate Revision: The downturn in the economy last year

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Evaluate Revision: The downturn in the economy last year  [#permalink]

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New post Updated on: 02 Oct 2018, 08:44
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This question is part of the GMAT Club Critical Reasoning : Evaluate Revision Project.

The downturn in the economy last year has prompted many companies to make widely publicized layoffs, resulting in thousands of lost jobs. Economists predicted that these layoffs would cause people generally to cut back on their discretionary spending even if their jobs were secure, in anticipation of coming hard times. However, this prediction has not come to pass, since there has been no increase in the amount of money set aside by the general public in savings accounts.

The answer to which of the following questions would be most useful in evaluating the significance of the savings patterns described above?

A. What business sectors were most affected by the layoffs?

B. How much of their savings, on average, do laid-off employees deplete before finding new employment?

C. What has been the percent increase in the cost of necessities such as food, housing, and utilities during the period since the layoffs?

D. What percentage of people laid off have savings accounts?

E. What has been the average salary during the period since the layoffs?

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Originally posted by souvik101990 on 25 Feb 2015, 21:35.
Last edited by Skywalker18 on 02 Oct 2018, 08:44, edited 1 time in total.
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Re: Evaluate Revision: The downturn in the economy last year  [#permalink]

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New post 25 Feb 2015, 23:25
A. What business sectors were most affected by the layoffs? - Irrelevant

B. How much of their savings, on average, do laid-off employees deplete before finding new employment? - Issue at hand is about saving pattern of General public not laid-off people.

C. What has been the percent increase in the cost of necessities such as food, housing, and utilities during the period since the layoffs? - Correct.

D. What percentage of people laid off have savings accounts? - Does not affect the conclusion

E. What has been the average salary during the period since the layoffs? - Irrelevant.

OA please...
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Re: Evaluate Revision: The downturn in the economy last year  [#permalink]

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New post 09 Apr 2015, 06:42
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If the savings of employees working or laid off is not reflecting it must be true that there are expenditures that they have to incur irrespective of their income and meet their needs...eg rent, food, and other necessary items
If the quantity of those items remain constant and there is an increase in their price/rate then the expenditures rise and savings fall, therfore, it is important to know that impact by what number or by what percent.
Option C clearly points out on that and if we evaluate the rise in those necessary items we might be able to judge why the savings have fallen
So option C it is.

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Re: Evaluate Revision: The downturn in the economy last year  [#permalink]

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New post 09 Apr 2015, 14:16
Would people who were laid off be spending from their savings account and thus bringing down the public's average amount in savings accounts? Or balance out those who are still employed and saving more? If the cost of neccessities has risen during this period then it would potentially impact everyone - not just those laid off and those still employed would perhaps be saving even less?
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Re: Evaluate Revision: The downturn in the economy last year  [#permalink]

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New post 16 Aug 2017, 10:51
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An assumption is something that must be true in order for the argument to make sense. In other words, an assumption is a missing but necessary piece of evidence - something that the author is taking for granted.

Let's summarize the argument in our own words (always a good idea on assumption/str/wkn questions):

Concl: people aren't cutting back on spending.

Evid: no extra money in savings accounts.

So, the author is basing the conclusion that people are spending just as much on the fact that they're not putting extra money into their savings accounts.

To reach that conclusion, the author must be assuming that there's no other evidence that people are spending less.

Our prediction: other measures of savings/spending less also haven't increased.

This prediction leads us directly to (C).
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Re: Evaluate Revision: The downturn in the economy last year  [#permalink]

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New post 24 Sep 2018, 16:23
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

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Re: Evaluate Revision: The downturn in the economy last year &nbs [#permalink] 24 Sep 2018, 16:23
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