Check GMAT Club Decision Tracker for the Latest School Decision Releases https://gmatclub.com/AppTrack

 It is currently 25 May 2017, 06:09

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# OA a few posts below. Many people believe that because

 new topic post reply Question banks Downloads My Bookmarks Reviews Important topics
Author Message
Manager
Joined: 06 May 2005
Posts: 66
Followers: 2

Kudos [?]: 133 [0], given: 0

OA a few posts below. Many people believe that because [#permalink]

### Show Tags

06 Aug 2005, 03:30
OA a few posts below.

Many people believe that because wages are lower in developing countries than in developed countries, competition from developing countries in goods traded internationally will soon eliminate large numbers of jobs in developed countries. Currently, developed countries' advanced technology results in higher productivity, which accounts for their higher wages. Advanced technology is being transferred ever more speedily across borders, but even with the latest technology, productivity and wages in developing countries will remain lower than in developed countries for many years because developed countries have better infrastructure and better-educated workers. When productivity in a developing country does catch up, experience suggests that wages there will rise. Some individual firms in developing countries have raised their productivity but kept their wages (which are influenced by average productivity in the country's economy) low. However, in a developing country's economy as a whole, productivity improvements in goods traded internationally are likely to cause an increase in wages. Furthermore, if wages are not allowed to rise, the value of the country's currency will appreciate, which (from the developed countries' point of view) is the equivalent of increased wages in the developing country. And although in the past a few countries have deliberately kept their currencies undervalued, that is now much harder to do in a world where capital moves more freely.

1. The passage suggests that if the movement of capital in the world were restricted, which of the following would be likely?
A Advanced technology could move more quickly from developed countries to developing countries.
B Developed countries could compete more effectively for jobs with developing countries.
C A country's average wages could increase without significantly increasing the sophistication of its technology or the value of its currency.
D A country's productivity could increase without significantly increasing the value of its currency.
E Workers could obtain higher wages by increasing their productivity.

2. The primary purpose of the passage is to
A identify the origin of a common misconception
B discuss the implications of a generally accepted principle
C present information relevant in evaluating a commonly held belief
D defend a controversial assertion against a variety of counterarguments
E explain under what circumstances a well-known phenomenon occurs

Source â€“ GMATPrep by Pearson VUE

Last edited by Pauline on 07 Aug 2005, 02:10, edited 1 time in total.
Manager
Joined: 13 Oct 2004
Posts: 236
Followers: 1

Kudos [?]: 15 [0], given: 0

### Show Tags

06 Aug 2005, 10:58
1. D

If the flow is restricted, productivity could increase and the country's currency can be kept artificially low.

2. C
Manager
Joined: 06 May 2005
Posts: 66
Followers: 2

Kudos [?]: 133 [0], given: 0

### Show Tags

07 Aug 2005, 02:10
prep_gmat
You're right, but your explanation is not enough Can you refute other choices in №1?

OA is indeed
1.D
2.C
Director
Joined: 02 Mar 2006
Posts: 575
Location: France
Followers: 1

Kudos [?]: 105 [0], given: 0

### Show Tags

25 Mar 2006, 13:29
Though this post is old, can someone please give an explanation to this RC.
I dont understand at all why it is 1 D!
VP
Joined: 20 Sep 2005
Posts: 1018
Followers: 3

Kudos [?]: 36 [0], given: 0

### Show Tags

25 Mar 2006, 17:45
Expln. for D....

If the flow of capital is restricted, then the developing country can undervalue its currency to keep the prod. rate high while not raising wages.
Director
Joined: 02 Mar 2006
Posts: 575
Location: France
Followers: 1

Kudos [?]: 105 [0], given: 0

### Show Tags

26 Mar 2006, 01:04
Quote:
Expln. for D....

If the flow of capital is restricted, then the developing country can undervalue its currency to keep the prod. rate high while not raising wages.

D A country's productivity could increase without significantly increasing the value of its currency.

I don't know if you meant productivity or production rate.
If it is the 2nd, I agree, however it doesnt mean that the productivity will increase as D states.
If you meant productivity, I disagree. It is not because you keep wages low, that the productivity will increase. On the opposite.

One assertion of D is that the productivity could increase. From which part in
the text can we infer that?
VP
Joined: 20 Sep 2005
Posts: 1018
Followers: 3

Kudos [?]: 36 [0], given: 0

### Show Tags

27 Mar 2006, 23:26
Many people believe that because wages are lower in developing countries than in developed countries, competition from developing countries in goods traded internationally will soon eliminate large numbers of jobs in developed countries. Currently, developed countries' advanced technology results in higher productivity, which accounts for their higher wages. Advanced technology is being transferred ever more speedily across borders, but even with the latest technology, productivity and wages in developing countries will remain lower than in developed countries for many years because developed countries have better infrastructure and better-educated workers. When productivity in a developing country does catch up, experience suggests that wages there will rise. Some individual firms in developing countries have raised their productivity but kept their wages (which are influenced by average productivity in the country's economy) low. However, in a developing country's economy as a whole, productivity improvements in goods traded internationally are likely to cause an increase in wages. Furthermore, if wages are not allowed to rise, the value of the country's currency will appreciate, which (from the developed countries' point of view) is the equivalent of increased wages in the developing country. And although in the past a few countries have deliberately kept their currencies undervalued, that is now much harder to do in a world where capital moves more freely.

karlfurt wrote:
Quote:
Expln. for D....

If the flow of capital is restricted, then the developing country can undervalue its currency to keep the prod. rate high while not raising wages.

D A country's productivity could increase without significantly increasing the value of its currency.

I don't know if you meant productivity or production rate.
If it is the 2nd, I agree, however it doesnt mean that the productivity will increase as D states.
If you meant productivity, I disagree. It is not because you keep wages low, that the productivity will increase. On the opposite.

One assertion of D is that the productivity could increase. From which part in
the text can we infer that?
27 Mar 2006, 23:26
Similar topics Replies Last post
Similar
Topics:
I do find the proposed OA debatable - the word many in it is 2 08 Dec 2009, 10:04
Should we require OA with post of each question? 0 29 Oct 2009, 13:08
Until recently many astronomers believed that asteroids 11 06 Oct 2009, 03:01
Until recently many astronomers believed that asteroids 10 17 Apr 2009, 04:27
I am posting only two passages today because there are 6 19 Mar 2009, 04:57
Display posts from previous: Sort by

# OA a few posts below. Many people believe that because

 new topic post reply Question banks Downloads My Bookmarks Reviews Important topics

 Powered by phpBB © phpBB Group and phpBB SEO Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.