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# The downturn in the economy last year has prompted many

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Manager
Joined: 15 Sep 2009
Posts: 202
Re: The downturn in the economy last year has prompted many  [#permalink]

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25 Jun 2012, 05:24

It provides an alternative explanation to why savings rate are not going up, i.e. possibly because prices of food and other necessities are going up, people are using monies that could have been saved for this increased expenditures.

Cheers,
Der alte Fritz.
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+1 Kudos me - I'm half Irish, half Prussian.

Senior Manager
Joined: 08 Jun 2010
Posts: 305
Location: United States
Concentration: General Management, Finance
GMAT 1: 680 Q50 V32
Re: The downturn in the economy last year has prompted many  [#permalink]

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25 Jun 2012, 05:32
You can rule out B just by reading the stem: The answer to which of the following questions would be most useful in evaluating the significance of the savings patterns described above?

Intern
Joined: 21 Jun 2014
Posts: 10
Re: The downturn in the economy last year has prompted many  [#permalink]

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14 Sep 2014, 02:58
The downturn in the economy last year has prompted many companies to make widely publicized layoffs, resulting
in thousands of lost jobs. Economists predicted that these layoffs would cause people generally to cut back on their
discretionary spending, even if their jobs were secure, in anticipation of coming hard times. However, this prediction
has not come to pass, since there has been no increase in the amount of money set aside by the general public in
savings accounts.

Which one of the following is an assumption on which the argument depends?

a) The economy has not improved in recent months.
b) There has been no increase in the amount of money invested in stocks, certificates of deposit, or other savings
vehicles.
c) Salaries have decreased as a result of the economic downturn.
d) No business sectors have seen growth in recent months.
e) Those who were laid off have been able to find other employment.
Senior Manager
Joined: 05 Nov 2012
Posts: 445
Concentration: Technology, Other
Re: The downturn in the economy last year has prompted many  [#permalink]

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14 Sep 2014, 05:57
Hi Thanks for sharing the question.
My 2 cents.
The downturn in the economy last year has prompted many companies to make widely publicized layoffs, resulting in thousands of lost jobs.

Economists predicted:layoffs would cause people generally to cut back on their discretionary spending even if their jobs were secure, in anticipation of coming hard times.
(Conc:)this prediction has not come to pass,
(Why?)since there has been no increase in the amount of money set aside by the general public in savings accounts.
Assumption: There is no factor that is eating their saving.

The answer to which of the following questions would be most useful in evaluating the significance of the savings patterns described above?

What business sectors were most affected by the layoffs?
How much of their savings, on average, do laid-off employees deplete before finding new employment?
What has been the percent increase in the cost of necessities such as food, housing, and utilities during the period since the layoffs?
What percentage of people laid off have savings accounts?
What has been the average salary during the period since the layoffs?

B Vs C:
How much of their savings, on average, do laid-off employees deplete before finding new employment?
>> Two points why C is better than B: a: average & b:laid-off employees.
Prediction is abt the general public not only abt a specific segment. Second, average doesn't give required info abt peoples' saving behavior. It's just that some ppl's saving depletion was below average and some above.
What has been the percent increase in the cost of necessities such as food, housing, and utilities during the period since the layoffs?
>>Correct .This will answer whether is any factor that is eating their saving.
Intern
Joined: 13 Jul 2016
Posts: 37
GMAT 1: 770 Q50 V44
Re: The downturn in the economy last year has prompted many  [#permalink]

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31 Oct 2016, 00:36
bipolarbear wrote:
The downturn in the economy last year has prompted many companies to make widely publicized layoffs, resulting in thousands of lost jobs. Economists predicted that these layoffs would cause people generally to cut back on their discretionary spending even if their jobs were secure, in anticipation of coming hard times. However, this prediction has not come to pass, since there has been no increase in the amount of money set aside by the general public in savings accounts.

The answer to which of the following questions would be most useful in evaluating the significance of the savings patterns described above?

What business sectors were most affected by the layoffs?
How much of their savings, on average, do laid-off employees deplete before finding new employment?
What has been the percent increase in the cost of necessities such as food, housing, and utilities during the period since the layoffs?
What percentage of people laid off have savings accounts?
What has been the average salary during the period since the layoffs?

I think, the conclusion is about the saving of the people who are not laid off. So B and D are out. A is an un-necessary distinction that is not useful in evaluating a general conclusion.
For E, the average salary can not tell us why an increase in saving was not observed. An increase or decrease in average salary could have been useful in evaluation though.
SVP
Joined: 12 Dec 2016
Posts: 1633
Location: United States
GMAT 1: 700 Q49 V33
GPA: 3.64
Re: The downturn in the economy last year has prompted many  [#permalink]

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30 Jun 2017, 13:36
the main premise is no increase in saving accounts, the main conclusion is no decrease in discretionary spending
this is an assumption question => C is correct.

Other options attack the parallel argument, not the main argument.
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Re: The downturn in the economy last year has prompted many  [#permalink]

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24 Nov 2018, 05:12
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Re: The downturn in the economy last year has prompted many &nbs [#permalink] 24 Nov 2018, 05:12

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