akijuneja wrote:
In Country K in the year 2000, farmers produced so much cotton that the market could not absorb all of it and the price of cotton fell precipitously. In the next year, the government of Country K introduced direct support payments to any cotton producers that would take 25 or more percent of their cotton acreage out of production. By mid-year 2002, cotton prices in Country K were back to the levels seen in 1999. The government claimed that its direct support payments were responsible for the rebound in prices.
Each of the following, if true, would weaken the government's claim, EXCEPT:
(A)Between 1999 and mid-year 2002, Country K experienced rapid inflation.
(B)In the beginning of 2001, a large textile plant opened in Country K to take advantage of the country's low cotton prices.
(C)Almost all farmers refused to take any of their cotton acreage out of production.
(D)As a condition to receive government support payments, farmers were prohibited from using the old cotton acreage for other agricultural purposes.
(E)A large drought hit in Country J, next to Country K, wiping out that nation's cotton crops and causing a need to import cotton
hi,
conclusion here is :
because of DIRECT SUPPORT PAYMENT
(DSP)===>PRICE INCREASED
(PI)My approach in all except question is to read and understand argument and then eliminate the wrong answers.
(A)Between 1999 and mid-year 2002, Country K experienced rapid inflation.(inflation always increases the prices of all the products....hence its not
DSP rather
INFLATION which caused
PI)==>WEAKENS
(B)In the beginning of 2001, a large textile plant opened in Country K to take advantage of the country's low cotton prices.(FACTORY OPENED ==>DEMAND FOR COTTON INCREASED ===>When demand of something increases PRICE also increases....hence its not
DSP rather
DEMAND which caused
PI)==>WEAKENS
(C)Almost all farmers refused to take any of their cotton acreage out of production.(NO FARMERS TAKEN ADVANTAGE OF DSP ...HENCE THERE MUST BE
SOME OTHER FACTORS FOR
PI AND NOT
DSP)===>WEAKENS
(D)As a condition to receive government support payments, farmers were prohibited from using the old cotton acreage for other agricultural purposes.==>
DOESNT AFFECTS (CORRECT)
(E)A large drought hit in Country J, next to Country K, wiping out that nation's cotton crops and causing a need to import cotton(AGAIN
DEMAND INCREASED IN NEIGHBOUR COUNTRY===>THEREFORE
PI......hence its not
DSP rather DEMAND which caused
PI)==>WEAKENS
hope it helps