Politician: After a civil war two decades ago, the Laconian

Question

Politician: After a civil war two decades ago, the Laconian Democratic Republic was separated into two independent states: the Laconian Socialistic Union (LSR) and The Republic of Laconia (TRL). Both newly born states initiated a series of in-depth economic reforms, and now, the average annual per capita income in TRL is 20% greater than in LSR. Given that the two territories had roughly the same average per capita income before the civil war, we can conclude that reforms undertaken by LSR have led to a decrease in the average per capita income of that state’s residents.

The argument above depends on which of the following assumptions?

(A)The cost of living in both countries has remained roughly the same.
(B)The population of LSR is roughly the same as that of TRL.
(C)Reforms initiated by TRL have not resulted in per capita income growing to be 20% greater than two decades ago.
(D)LSU reforms were aimed at concentrating all major industries under state ownership, while TRL focused its reforms on supporting privately owned businesses.
(E)Prior to the split, most of the income generating businesses were situated in territories that became part of TRL.

OA to follow soon....

Zarrolou · Answer

We have to look for an answer that supports the conclusion: "reforms undertaken by LSR have led to a decrease in the average per capita income of that state’s residents".
This difference must be originated not by the good reforms of TSR, but by the bad reforms in LSR.

(C)Reforms initiated by TRL have not resulted in per capita income growing to be 20% greater than two decades ago.

C states exactly this concept: the gap is a result of bad reforms in LSR.
IMO C, waiting for OA...

guerrero25 · Answer

Hi .. Thanks for picking the question . Could you please elaborate a little on choice "c" -- How is this related to LSR's bad reform .

thanks !

OA is "C"

Zarrolou · Answer

The passage says that they had the same income. So if now there is a difference and one income didn't grow (or grew slowly), then the other must have declined (thanks to bad reforms).

Hope it's clear

Archit143 · Answer

Excellent question......I ended up selecting B....bt yes C is the correct answer. Can anyone explain why the answer is not B.

Archit

Zarrolou · Answer

Take a look at my explanation above.
B is not correct because there is no correlation between the population and the decline in  per capita income ;
the population could play a role here if we would talk about values like GPD, that don't take into consideration the number of citizens.
But since we are talking about  per capita  values, the "value" of the population is not a disturbing factor.

VeritasPrepRon · Answer

The OA is C, which makes sense because it is the only choice that gives an alternative to the conclusion that is postulated in the question. The question assumes that the 20% difference between LSR and TSR is due to LSR performing poorly, when it could have just as easily been due to TSR performing well.

If you and I were making the same salary 5 years ago, and today yours is 20% greater, does that mean I did really badly at my job, or is it possible that I did okay and you did really well? Both possibilities would lead to the same situation, so answer choice C removes a significant weakness that could have damaged the purpoted conclusion.

Answer choices D and E seem to play along your potential preconceived notions of similar contries that have undergone similar transitions at one time or another (Germany, Korea), so this is a good reminder to leave the preconceived notions at home and examine the question solely on the information provided.

Hope this helps!
-Ron

guerrero25 · Answer

thank you Ron and Zarrolou +1 to both of you !

TerryJones · Answer

To explain this in a slightly different way:

Per Capita is a per person number, basically an average number. The sample size doesn't have to be the same, or even relatively the same to compare average numbers.

Archit143 · Answer

If i am nt wrong...per capita = (total income/ population)...So if the total income of both the states are same , but they have varying population figs...i think per capita will change..so as to efficiently compare we must assume the population of both states to be same.

TerryJones · Answer

Total income was never part of the problem. The income has always been classified as per capita so the population sizes don't matter.

AvgIndianGuy · Answer

it has to be C ..... lets say their per capita incomes were x and y . now after 20 yrs x becomes 20 prcnt more than y . Now this can happen only either x increases by 20 prcnt or y decreases . C option answers it . More of a maths question .

VerbalBot · Answer

Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.

Politician: After a civil war two decades ago, the Laconian

Prep Toolkit

Top 5 GMAT Debrief Videos

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards