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In troubled economic times, there is a shift in business from mainstre

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In troubled economic times, there is a shift in business from mainstre [#permalink]

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New post Updated on: 14 Mar 2017, 11:27
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Difficulty:

  15% (low)

Question Stats:

82% (01:35) correct 18% (02:37) wrong based on 88 sessions

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In troubled economic times, there is a shift in business from mainstream retail stores to discount retail stores as consumers aim to reduce their total monthly spending. For local discount stores, when unemployment rises or effective wages decline due to inflation or another cause, sales go up. By contrast, however, during periods of extreme economic hardship, business at discount stores stops improving and may even suffer.

Which of the following, if true, does most to explain the contrast described above?

A) During extreme economic hardship, businesses that are located near discount stores and which also cater to lower spending levels also suffer.

B) The lower overall levels of consumer spending are, the more discount stores will benefit.

C) When discount stores flourish, they may be able to hire additional staff and raise effective wages.

D) During extreme economic hardship, consumers may continue to reduce total spending even after they have shifted their purchases to the most economic outlets available.

E) Except during periods of extreme economic hardship, discount stores tend to thrive more in economies benefiting from a direct economic stimulus, which increases spending cash.

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Originally posted by AARONRAMSEY on 12 Mar 2017, 21:02.
Last edited by Bunuel on 14 Mar 2017, 11:27, edited 1 time in total.
Renamed the topic.
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Re: In troubled economic times, there is a shift in business from mainstre [#permalink]

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New post 13 Mar 2017, 16:00
Question Type: Paradox

Argument: Discount stores are expected to do well but they do not
Missing Info: Discount stores also feel the heat of recession.

A) During extreme economic hardship, businesses that are located near discount stores and which also cater to lower spending levels also suffer. - Incorrect. Irrelevant.

B) The lower overall levels of consumer spending are, the more discount stores will benefit. - Incorrect. Opposite.

C) When discount stores flourish, they may be able to hire additional staff and raise effective wages. - Incorrect. Out of scope.

D) During extreme economic hardship, consumers may continue to reduce total spending even after they have shifted their purchases to the most economic outlets available. - Correct. Explains the reason for the under performance of discount stores during economic recession.

E) Except during periods of extreme economic hardship, discount stores tend to thrive more in economies benefiting from a direct economic stimulus, which increases spending cash. - Incorrect. Out of context. Talks about the period when there is no economic hardship.

Answer: D
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Re: In troubled economic times, there is a shift in business from mainstre [#permalink]

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New post 19 Mar 2017, 08:38
AARONRAMSEY wrote:
In troubled economic times, there is a shift in business from mainstream retail stores to discount retail stores as consumers aim to reduce their total monthly spending. For local discount stores, when unemployment rises or effective wages decline due to inflation or another cause, sales go up. By contrast, however, during periods of extreme economic hardship, business at discount stores stops improving and may even suffer.

Which of the following, if true, does most to explain the contrast described above?

A) During extreme economic hardship, businesses that are located near discount stores and which also cater to lower spending levels also suffer.

B) The lower overall levels of consumer spending are, the more discount stores will benefit.

C) When discount stores flourish, they may be able to hire additional staff and raise effective wages.

D) During extreme economic hardship, consumers may continue to reduce total spending even after they have shifted their purchases to the most economic outlets available.

E) Except during periods of extreme economic hardship, discount stores tend to thrive more in economies benefiting from a direct economic stimulus, which increases spending cash.


Here the prompt says during economic hardship discount stores flourishes but during extreme hardship discount stores suffer insted of flourishing.
we need to resolve this
if during extreme economic hardship people stops visiting discount stores then paradox will be resolved

Hence D is correct
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Re: In troubled economic times, there is a shift in business from mainstre   [#permalink] 19 Mar 2017, 08:38
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