In 1983 Argonia’s currency, the argon, underwent a reduction in value

So, how is this weaking ? I mean suppose they export 100 today and earning 100 dollars (1$ =1Argon) and minister devalue the currency against dollar ( major currency) ( say 1$ =2 Argon) , even though they still export same and earning 100 dollars , but now this means 200 argons i.e. exports is increased

I think this is an easy question - but again, maybe that is because I am an economist

A. Doesn't tell us anything about whether a decline in the argon will boost exports.
B. Offers weak support for the reverse of the claim that we are asked to support.
C. We don't know the value of the argon in "last year and the year before".
E. Tells us that a reduction in argon leads to decreased imports => irrelevant.

D. If all exporting companies are working at full capacity now and it will take years to increase this capacity, it's impossible to immediately increase exports. Hence this is the answer.

This certainly isn't a sub 600 question .. You explanation seems fine but we are provided data only till 1987. The need for another increase in export may be next year or may be after 100 years .. in that duration .. more factories may or may not have been built.. and thus the present industries may or may not be able to supply the increased exports ..

I hope ^^ makes sense ..

I guess a bit more elaborate explantion will do ..

I don't think that this is a sub-600 Q and I never stated so. I just said that I found it easy, which I should since I'm an economist.

Allow me to elaborate: In D we are told that the exporting factories are working at full capacity and it will take a couple of years to increase this capacity (by building new factories). This means that there is no way to increase exports in the forthcoming year. Since we are asked to find a claim which supports the notion that the finance ministers plan (to decrease the argon in order to boost exports) will not work, statement D fits the bill perfectly. Again, this is due to the fact that D states that there is no way to increase exports in the next year. Therefore the finance minister's plan will not increase exports.

I hope this helped. If not, please let me know.

Ah .. i guess its more clear to me now .. thanks a ton. kudos +1 for you

PS: that "sub 600" was directed towards barakhaiev, although i didn't mentioned it there .. that might have caused the confusion.

Ah ok, I missed that one. I'm glad that it helped!

Since Argonia’s factories are already operating at
full capacity, the country has reached its production limit (at least for now). The price won't cause an increase in exports at this stage.

Last year: 200 units of products, at 100 Argons per unit.
This year: 200 units of products, at 50 Argons per unit.

Only the price has changed. The quantity remains the same.

Funny enough I first chose D but then rejected it for being unlikely, as there surely are other goods than those produced than can be exported or are in inventory. Well, sometimes it would be good to stick to the "if, true" part of the stem...

I will give you a hand if you let me:


Only choice D makes it because, even if the government makes a decision about what it needs to make the economy grow, the capacity to produce new goods is a limiting factor to the economy to achieve its goal.

Bump up to this old easy question from the GMATPrep.

D is a clear cut winner. Even if you take care of all other factors if the factories cannot produce more than they are currently, exports cannot go up.!

In 1983 Argonia’s currency, the argon, underwent a reduction in value relative to the world’s strongest currencies. This reduction resulted in a significant increase in Argonia’s exports over 1982 levels. In 1987 a similar reduction in the value of the argon led to another increase in Argonia’s exports. Faced with the need to increase exports yet again, Argonia’s finance minister has proposed another reduction in the value of the argon.

Which of the following, if true, most strongly supports the prediction that the finance minister’s plan will not result in a significant increase in Argonia’s exports next year?


Passage understanding:
-In 1983 Argonia's currency (argon) underwent reduction in value and reduction resulted in Increase in Export level compared to previous year 1982 export level ( PREMISE)
-Again in 1987 similar reduction in value of argon resulted in increase in export. (PREMISE)
-Now to increase export reduce value of argon - Plans Finance Minister ( Prediction based in Premise)

As per question we have to weaken the Plan.

Prethinking- We have to look for something that will hinder the predicted outcome even after the value of argon is reduced like earlier years result is not the same i.e increase in exports.


(A) The value of the argon rose sharply last year against the world’s strongest currencies.
- Increase in value of argon last year, does not affect the plan.Plan is to reduce value to increase in exports .
So this answer choice does not affect the plan.
Eliminate A

(B) In 1988 the argon lost a small amount of its value, and Argonian exports rose slightly in 1989.

-Value of argon reduced and exports rose- this clearly supports the prediction. So eliminate B

(C) The value of Argonia’s exports was lower last year than it was the year before.
-This answer choice does not tell us anything about what was value of argon , only gives partial information that value of exports was lower last year. Export could be lower because of multiple reasons. It is irrelevant. So Eliminate C

(D) All of Argonia’s export products are made by factories that were operating at full capacity last year, and new factories would take years to build.
- CORRECT
This tells us reason why history will not repeat ,that is why value of argon will reduce but same result will not be achieved of increased export. It tells us that already they are producing the maximum and there is no scope to increase production immediately as new factories will take time to build up. So if there is no increase in production, export cannot increase even when value of argon will reduce.

(E) Reductions in the value of the argon have almost always led to significant reductions in the amount of goods and services that Argonians purchase from abroad.

-Totally irrelevant as plan is not talking about argonian purchase from abroad.

Ans Choice D - CORRECT

Argument Analysis:

A underwent R(reduction) relative to world’s strongest currencies

1982, R = sig. Inc. in A EXPORT level

1987, similar R = inc. in EXPORT

NEED to increase EXPORT again, FM, is proposing another R

So following this logic, if FM reduced the value of the argon again, Argonia should see an increase in export level, but the question is asking what answer choice most STRONGLY supports that this reduction WILL NOT result in an increase in EXPORT

*Find a WEAKEN and (?) discrepancy problem *

Answer Choice Analysis:

The value of the argon rose sharply last year against the world's strongest currencies.
If it did rise sharply, doesn’t this mean that they could reduce the Argon to increase the export? But does this support why it will not increase in the export?
I don’t think so

In 1988 the argon lost a small amount of its value, and Argonian exports rose slightly in 1989.
Argon lost a small amount of its value, AND the export rose so this does the OPPOSITES of what the argument is looking for
Eliminate

The value of Argonia's exports was lower last year than it was the year before.
If they are seeing a reduction in exports, what guarantees them that reducing the Argon FURTHER will increase the export
Maybe, reducing the export will backfire again and this will FURTHER LOWER their export level which does predict that FM’s plan will NOT result in a sig inc. in Argonia’s export this year
BUT it is not guaranteed that lower export last year will continue, it could have an opposite effect and Argonia could see an increase in the export level

All of Argonia's export products are made by factories that were operating at full capacity last year, and new factories would take years to build.
IF all the factories ARE operating at full capacity, then even with the reduction, perhaps Argonia is not able to meet the export level
So, then this COULD support why the reduction in the value of the argon would not increase in Argonia’s export next year

Reductions in the value of the argon have almost always led to significant reductions in the amount of goods and services that Argonians purchase from abroad.
This is irrelevant and out of scope

In 1983 Argonia’s currency, the argon, underwent a reduction in value relative to the world’s strongest currencies. This reduction resulted in a significant increase in Argonia’s exports over 1982 levels. In 1987 a similar reduction in the value of the argon led to another increase in Argonia’s exports. Faced with the need to increase exports yet again, Argonia’s finance minister has proposed another reduction in the value of the argon.

Which of the following, if true, most strongly supports the prediction that the finance minister’s plan will not result in a significant increase in Argonia’s exports next year?

(A) The value of the argon rose sharply last year against the world’s strongest currencies. we are concerned with what the effects will be moving forward, not what happened in the past

(B) In 1988 the argon lost a small amount of its value, and Aronian exports rose slightly in 1989. this answer choice strengthens the argument - when value decreases, exports increases

(C) The value of Argonia’s exports was lower last year than it was the year before. again, like answer choice A, we are not concerned with what has happened in the past.

(D) All of Argonia’s export products are made by factories that were operating at full capacity last year, and new factories would take years to build. bingo. if factories are already at full capacity and new factories will take years to build, this will weaken the finance minister's claim that exports will increase when value decreases. If factories are already at max capacity, how can they increase throughput?

(E) Reductions in the value of the argon have almost always led to significant reductions in the amount of goods and services that Argonians purchase from abroad. we are concerned with exports, not imports.

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