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Neither a rising standard of living nor balanced trade, by itself, est

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Re: Neither a rising standard of living nor balanced trade, by itself, est  [#permalink]

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New post 04 Aug 2015, 21:46
Country A : Standard of living of people increases so people want to spend their money on more luxurious items and items which are not basic necessity.The demand of such items increases thus Country A starts importing more which leads to a trade deficit (Import >Export) ---Not good for the economy


Country B : Standard of living is on a decline so demand for items is less so the imports decrease.Trade gets Balanced (Import = Export).---Again not good for the economy.

Logically if we think..
X=Rising Standard of Living(1)
Y=Balanced Trade(1)

For Country A

X && not Y


For Country B

not X && Y

The condition will only be true for X && Y

and the only answer choice that is valid is A.
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Re: Neither a rising standard of living nor balanced trade, by itself, est  [#permalink]

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New post 17 Oct 2016, 15:57
fluke wrote:
goalsnr wrote:
Neither a rising standard of living nor balanced trade, by itself, establishes a country's ability to compete in the international marketplace. Both are required simultaneously since standards of living can rise because of growing trade deficits and trade can be balanced by means of a decline in a country's standard of living.

If the facts stated in the passage above are true, a proper test of a country's ability to be competitive is its ability to

(A) balance its trade while its standard of living rises
(B) balance its trade while its standard of living falls
(C) increase trade deficits while its standard of living rises
(D) decrease trade deficits while its standard of living falls
(E) keep its standard of living constant while trade deficits rise

Please explain your answers


I had little to no idea how standard of living & balanced trade dictate a country's economic competitiveness.

I gathered the information from these two statements in the passage and answered in less than 40 secs.

1st sentence:
Rising standard of living is good.
Balanced trade is good.
But, both should co-exist to gain a competitive edge.

2nd: Why both should co-exist?
Rising standard of living is not good when it is an effect of "growing trade deficits". Growing trade deficit(Bad)
Balanced trade is not good when it is an effect of "declining standard of living". declining standard of living(Bad)

A gives the competitive scenario:
"balance its trade while its standard of living rises"

Two goods together.

Ans: "A"


This thread deserves a bump.
Best explanation so far. Thanks Fluke!

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Re: Neither a rising standard of living nor balanced trade, by itself, est  [#permalink]

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New post 07 Nov 2016, 21:52
1
goalsnr wrote:
Neither a rising standard of living nor balanced trade, by itself, establishes a country's ability to compete in the international marketplace. Both are required simultaneously since standards of living can rise because of growing trade deficits and trade can be balanced by means of a decline in a country's standard of living.

If the facts stated in the passage above are true, a proper test of a country's ability to be competitive is its ability to

(A) balance its trade while its standard of living rises
(B) balance its trade while its standard of living falls
(C) increase trade deficits while its standard of living rises
(D) decrease trade deficits while its standard of living falls
(E) keep its standard of living constant while trade deficits rise

Please explain your answers


Decoding the argument
"Neither a rising standard of living nor balanced trade, by itself, establishes a country's ability to compete in the international marketplace. Both are required simultaneously"[conclusion (rule)]
"since standards of living can rise because of growing trade deficits and trade can be balanced by means of a decline in a country's standard of living." [Premise-supporting the concl]

The question stems asks us to test the country's ability based on the rule mentioned. "A" makes it clear that both are required.
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Re: Neither a rising standard of living nor balanced trade, by itself, est  [#permalink]

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New post 03 Mar 2017, 18:23
Hi Expert,
I am confused between option A and B.
As per first statement in stimuli, i need both - rising standard of living and balanced trade to establish country's ability to compete. As per second sentence, if any one of these parameters decline it needs to be compensated by other. IMO, the OA should be B
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Re: Neither a rising standard of living nor balanced trade, by itself, est  [#permalink]

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New post 23 Apr 2017, 11:35
adkikani,
Quote:
I am confused between option A and B.
As per first statement in stimuli, i need both - rising standard of living and balanced trade to establish country's ability to compete. As per second sentence, if any one of these parameters decline it needs to be compensated by other. IMO, the OA should be B

As explained by Alexey1989x, the passage states that both a rising standard of living and balanced trade are required simultaneously to establish a country's ability to compete. If we only know that a country can balance its trade while its standard of living falls (choice B), we do not know whether it can balance its trade while its standard of living rises. Thus, we do not know if it can achieve both requirements simultaneously.
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Re: Neither a rising standard of living nor balanced trade, by itself, est  [#permalink]

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New post 28 Jul 2017, 08:48
Neither a rising standard of living nor balanced trade, by itself, establishes a country's ability to compete in the international marketplace. Both are required simultaneously since standards of living can rise because of growing trade deficits and trade can be balanced by means of a decline in a country's standard of living.

The first line expresses two conditions for the country to compete in international marketplace. The last lines are only to confuse you so that you chose a wrong answer. The two conditions are rising standards of living with balanced trade.

If the facts stated in the passage above are true, a proper test of a country's ability to be competitive is its ability to

(A) balance its trade while its standard of living rises

(B) balance its trade while its standard of living falls
(C) increase trade deficits while its standard of living rises
(D) decrease trade deficits while its standard of living falls
(E) keep its standard of living constant while trade deficits rise
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Re: Neither a rising standard of living nor balanced trade, by itself, est  [#permalink]

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New post 10 Aug 2017, 23:15
standard of living - The degree of wealth and material comfort available to a person or community.

If the SOL increases, people have more money, and more stock on hand. At this stage, if SOL becomes deficit, stocks go cheap or waste and cause a loss. Hence Balanced trade is important for increasing SOL.


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Re: Neither a rising standard of living nor balanced trade, by itself, est  [#permalink]

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New post 06 Oct 2017, 02:03
adkikani wrote:
Hi Expert,
I am confused between option A and B.
As per first statement in stimuli, i need both - rising standard of living and balanced trade to establish country's ability to compete. As per second sentence, if any one of these parameters decline it needs to be compensated by other. IMO, the OA should be B



Can you specify the CR question type please...
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Re: Neither a rising standard of living nor balanced trade, by itself, est  [#permalink]

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New post 03 Jan 2018, 05:36
GMATNinja, I am unable to ascertain between choice A and choice E. From the logic presented in the argument, both the options seems good.

Can you please clarify my doubt here?

The only argument that I can figure is - The argument talks about balancing the trade but does not provide any information about keeping standard of living CONSTANT.

is the reasoning correct?
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Re: Neither a rising standard of living nor balanced trade, by itself, est  [#permalink]

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New post 03 Apr 2018, 06:43
Neither a rising standard of living nor balanced trade, by itself, establishes a country's ability to compete in the international marketplace. Both are required simultaneously since standards of living can rise because of growing trade deficits and trade can be balanced by means of a decline in a country's standard of living.

If the facts stated in the passage above are true, a proper test of a country's ability to be competitive is its ability to

(A) balance its trade while its standard of living rises
(B) balance its trade while its standard of living falls
(C) increase trade deficits while its standard of living rises
(D) decrease trade deficits while its standard of living falls
(E) keep its standard of living constant while trade deficits rise

Reading first sentence gives a very important information which is,
rising standard of living + balanced trade = establishes a country's ability to compete in the international marketplace.

Now I can infer that the standard of living should only go up not down. Hence, I can safely elimionate B and D.

Trade should be balanced and the deficits should not increase. Hence, I can eliminate C and E.

The winner is A, which clearly says that the trade should be balanced and SOL rises.
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Re: Neither a rising standard of living nor balanced trade, by itself, est  [#permalink]

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New post 17 Jul 2019, 19:23
We are asked what would be a proper test of a country's ability to be competitive based on the facts given.

In the first sentence we are told that "neither a rising standard of living nor balanced trade" in isolation will give a country competitiveness.

THUS we can infer that the country must figure out how to balance both.

Eliminate (C),(D) and (E) as they all suggest a focus on one of the two.

Between (A) and (B), B goes against the stated relationship and the logical relationship.

The stated relationship is that a countries standard of living decreases if its trade balance decreases (opposite of the facts given).

Logically a country should balance trade while increasing standard of living.

Thus, A is correct.
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Re: Neither a rising standard of living nor balanced trade, by itself, est   [#permalink] 17 Jul 2019, 19:23

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