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Namangupta1997
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The exchange rate between the currency of Country X and that of Countr 05 Jun 2022, 03:59
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Hi KarishmaB AndrewN

Can we classify the products bought by an individual from a foreign country as "imported goods" if he brings those products back to his own country? Only then it could be argued that the presence of tariffs makes the the people reluctant to buy items from other country.
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The exchange rate between the currency of Country X and that of Countr 05 Jun 2022, 13:28
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Namangupta1997
Hi KarishmaB AndrewN

Can we classify the products bought by an individual from a foreign country as "imported goods" if he brings those products back to his own country? Only then it could be argued that the presence of tariffs makes the the people reluctant to buy items from other country.
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Although technically you can, Namangupta1997, based on a dictionary definition of the word import, I have never heard of such a thing, and I see that as a problem in a question that hinges on such an interpretation. In my own experience, I have traveled abroad in several countries, and U.S. customs has never asked me if the clothes I was wearing were bought overseas, and I have never had to fill out any forms after the fact for tax purposes. I am not saying that Countries X and Y need to be like the U.S., but I should not have to assume that their tax laws, without any explanation of key terms (i.e. imported), are radically different. I think this is one of the sloppier efforts I have seen recently from Manhattan Prep, forcing us to pursue a line of logic to make an answer work. The idea is fine, but the execution of the question is lacking, in my view.

Nevertheless, thank you for thinking to ask.

- Andrew
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The exchange rate between the currency of Country X and that of Countr 10 Jan 2024, 01:57
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Dear Bunuel
I eliminated D because tariffs on imported goods does not clearly explain how much it is and whether it is prohibitive or not? However, in the answer explanation it seems you brought an assumption which is farther that argument (I mean in order to pick D as answer we are assuming more than what it is written, which I think this policy was not always correct in answering CR questions)
In order to resolve a paradox, I was thinking we are not obliged to take the same direction and rely on economic aspect. I chose B since I was thinking consumers of Y already have those electronics and clothes fashion in their country several months sooner (It's not my assumption, clearly stated in the passage) so, it is reasonable to think that they are interested to buy them in country X.
Moreover, in my pre-thinking I was thinking if it was an answer indication electronics and clothes in country X are not genuine, it can explain why consumers from Y are not interested in them
My biggest question is that, for D, here we brought up another assumption, which says products become too expensive because of tariffs, however, this approach I saw in answer explanations, most of the time wrong!
How can we make a distinction?
Best Regards

Bunuel
souvik101990
The exchange rate between the currency of Country X and that of Country Y has historically favored the currency of Country Y. Because of this, citizens of Country Y often take their vacations in Country X, where the exchange rate makes hotels and restaurants more affordable. Yet, citizens of Country Y rarely purchase clothing or electronics in Country X, despite the fact that those items are more expensive in their home country, even when sales taxes are taken into account.

Which of the following, if true, would best explain the buying habits of the citizens of Country Y?


A. Citizens of Country Y prefer the fashions available in their own country.

B. Stores in Country X receive the latest fashions and technology several months after they are available in Country Y.

C. The citizens of Country X resent the buying power of the currency of Country Y.

D. The government of Country Y imposes tariffs on imported goods.

E. The currencies of Country X and Country Y are both weak compared to the currency of Country Z.


This question is part of the GMAT Club Critical Reasoning : Paradox Revision Project.

OFFICIAL EXPLANATION



The argument focuses on the relative cost of goods and services in Countries X and Y due to an exchange rate that has historically favored the currency of Country Y. The argument presents an apparent discrepancy: the citizens of Country Y often take their vacations in Country X, yet rarely purchase clothing or electronics in Country X, despite the fact that those items are more expensive in their home country, even when sales taxes are taken into account. The correct answer will be one that indicates some reason why it might not actually be cheaper for citizens of Country Y to purchase clothing and electronics in Country X.

(A) The fashion preferences of the citizens of Country Y do not directly explain their buying habits. To be relevant, this statement would have to go further to link fashion preferences to purchasing decisions: for example, it would have to continue “…and are therefore willing to pay more for the goods available in their own country.”

(B) The fact that stores in Country Y receive the latest fashions and technology earlier than stores in Country X does not address the buying habits of the citizens. Even if we could assume that the citizens of Country Y demand the latest goods as soon as they are available, it still would not directly explain their buying habits. To be relevant, this statement would have to go further to link consumer preferences to purchasing decisions: for example, it would have to continue “…and the citizens of Country Y are willing to pay more in their own country just to acquire the latest goods as soon as they are available.”

(C) The attitude of the citizens of Country X is irrelevant to an argument about the purchasing habits of the citizens of Country Y.

(D) CORRECT. This choice states that the government of Country Y imposes tariffs on imported goods. This suggests that perhaps items that are purchased in Country X and brought into Country Y become prohibitively expensive because of the tariffs and could explain the spending habits of the citizens of Country Y.

(E) The currency of Country Z is irrelevant to why citizens of Country Y rarely purchase clothing or electronics in Country X.
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The exchange rate between the currency of Country X and that of Countr 24 Apr 2024, 12:05
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I didn't select D because of the word "imported", imported doesn't seem to be appropriate here.
Import generally means to import things from different country while you are still in your country, but when you are visiting a different country and bringing something then that doesn't comes under "imported".
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The exchange rate between the currency of Country X and that of Countr 24 Apr 2024, 21:42
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Patronus
Paradox: Even though some stuff is cheaper in X, people of Y don't buy them!

A. Citizens of Country Y prefer the fashions available in their own country.
So how does that explain why citizens of country Y do NOT buy cheaper stuff from X?
No where it is mentioned that X has outdated fashion!

B. Stores in Country X receive the latest fashions and technology several months after they are available in Country Y.
Ok, so the stuff arrives a bit late in country X, but no where it is mentioned that citizens of country Y will buy only if it is new or something they have not seen in their country before.

C. The citizens of Country X resent the buying power of the currency of Country Y.
Country X is resenting the buying power, but this gap in currency value should infact encourage the citizens of country Y to buy more stuff from country X!

D. The government of Country Y imposes tariffs on imported goods.
When the citizens come back from holidays, with all their souvenirs such as a hat or a new ipod, they are taxed by their own government!
Please note that we have to assume that they are taxed in a way that it surcharge surpasses that of price of same stuff in country Y including the sales tax.

E. The currencies of Country X and Country Y are both weak compared to the currency of Country Z.
Relation to Country Z (outside and irrelevant information) adds nothing to solve this paradox
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How can buying goods from another country count as "import"?
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The exchange rate between the currency of Country X and that of Countr 02 Aug 2025, 03:27
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Even though the exchange rate makes hotels, restaurants, and other services more affordable for citizens of Country Y when traveling to Country X, the continued imposition of tariffs by Country Y on goods imported from Country X (such as clothing and electronics) would increase the final costs of these items for citizens of Country Y. Thus, after these tariffs are accounted for, there would be little or no savings compared to purchasing the same products at home, even if sales taxes were considered. This economic barrier helps explain why tourists from Country Y do not purchase these items abroad, despite the favorable exchange rate

By contrast, tariffs do not typically apply to services such as hotels and restaurants, so tourists continue to take advantage of lower costs for those services during travel. The passage and the options make no mention of broader cultural preferences or delayed availability (which are less direct explanations), making tariffs the most compelling answer.
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The exchange rate between the currency of Country X and that of Countr 07 Oct 2025, 00:20
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What ChatGPT has to say

Let's work through this explanation/paradox question from the basics!

We need something that explains: "Why would they buy services (hotels/food) in Country X but NOT buy goods (clothing/electronics)?"
Possible explanations:
  • Maybe there's a cost they face when bringing goods back home
  • Maybe the goods in Country X aren't as good/current
  • Maybe there's a penalty for bringing goods across the border

(A) Citizens of Country Y prefer their own country's fashions
  • This only explains clothing, not electronics
  • Too narrow - doesn't explain both
(B) Stores in Country X get latest fashions and technology months later than Country Y
  • Aha! This explains both clothing AND electronics
  • Even if cheaper, Country Y citizens don't want old/outdated items
  • They'd rather pay more at home for current items
(C) Citizens of Country X resent the buying power
  • How does resentment stop Country Y citizens from buying?
  • Doesn't explain the behavior
(D) Country Y imposes tariffs on imported goods
  • Strong contender! If they have to pay tariffs when bringing goods home, the savings disappear
  • This would explain why they don't buy goods to bring back
(E) Both currencies are weak compared to Country Z
  • Irrelevant - we're only comparing X and Y
  • Out of scope
Step 5: Compare the Two Best Options - (B) vs (D)
Both seem to work! Let's think more carefully:
(D) Tariffs explanation:
  • If true: Goods are cheap in X, but tariffs when entering Y make them expensive again
  • Problem: The question says goods are "more expensive in their home country, even when sales taxes are taken into account"
  • This suggests we're already accounting for taxes
  • Tariffs would likely be mentioned if they were the issue
(B) Outdated goods explanation:
  • If true: Goods in X are cheaper but months out of date
  • Country Y citizens prefer current items even if more expensive
  • This perfectly explains: They'll use cheap services (hotel/food) but won't buy outdated products
Why (B) is Better
The key insight:
  • Services (hotels, restaurants) are consumed immediately - freshness doesn't matter
  • Products (clothing, electronics) have a timeliness factor - people want the latest
Option (B) explains:
  • ✓ Why they use services in X (cheap and quality doesn't depend on newness)
  • ✓ Why they don't buy goods in X (cheap but outdated)
Simple Analogy
Imagine you're on vacation in a country where everything is cheaper but their stores only have last year's iPhone models and last season's clothing:
  • Would you eat at restaurants? Yes! (Food quality doesn't depend on being "latest")
  • Would you buy an iPhone 14 when iPhone 16 is available at home? Probably not!
Answer: (B)
The citizens want current fashions and technology, which arrive in Country X months late. They're willing to save money on services but not willing to compromise on having outdated goods.
Does this explanation make sense?
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The exchange rate between the currency of Country X and that of Countr 07 Oct 2025, 05:18
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Hey,

I don't think the explanation is correct. As expected, ChatGPT is selecting and jusifying the answer it thinks is correct.

IMHO, no choice is completely correct. Sharing the AI response (as it is) I got when I shared my own analysis with it (So it is more like a refined and reviewed version of my anaysis and not AI analysis)-

Choice B- Stores in Country X receive the latest fashions and technology several months after they are available in Country Y.
Issue 1: The paradox in question concerns ALL items, not just latest releases
  • The passage states: "those items are more expensive in their home country" - referring to clothing and electronics available in both countries
  • If a basic t-shirt or standard laptop model is available in both countries and costs less in Country X (after exchange rate), Choice B doesn't explain why people wouldn't buy it
  • The "several months delay" only affects brand-new releases, but the paradox describes a general pattern of non-purchase
Issue 2: People don't exclusively buy the latest fashion and technology
  • Consumers regularly purchase:
    • Basic clothing items (t-shirts, jeans, underwear, socks) that don't change with seasons or trends
    • Classic styles that remain in stores for years
    • Previous generation electronics where being 6 months behind is perfectly acceptable (most people don't need the newest iPhone on release day)
    • Clearance/sale items - older models at discounted prices would be even MORE attractive in Country X

Conclusion on Choice B: Choice B only explains why citizens of Country Y might not purchase the very newest releases (latest fashion season or newest technology model). However, it completely fails to explain why they don't purchase the vast majority of clothing and electronics - the basic, classic, and older items that ARE available in both countries. Since the paradox is about their general shopping behavior across all items, not just cutting-edge products, Choice B provides an incomplete explanation.


Choice D: The government of Country Y imposes tariffs on imported goods.

Terminology Problem:
  • Tariffs are trade-level taxes imposed on commercial imports (what businesses/importers pay when bringing goods into a country for resale)
  • Customs duties or import duties are what individual travelers pay when bringing personal purchases across borders
  • Citizens of Country Y taking vacation and buying a few items would typically face "customs duties," not "tariffs" in the technical sense
Why this terminology matters:
  • The choice uses "tariffs on imported goods" which technically refers to commercial trade policy
  • Personal shoppers bringing back vacation purchases would encounter customs/import duties if they exceed duty-free allowances
  • This is a meaningful technical distinction
However, one could argue:
  • If we interpret "tariffs on imported goods" broadly to include any import costs (including customs duties paid by individuals), this would explain the behavior
  • Such costs could eliminate the price advantage for purchases made in Country X
  • This would explain why the apparent savings don't motivate purchases
Conclusion on Choice D: While Choice D uses technically imprecise terminology, it would explain the general behavior pattern IF we accept a broad interpretation of "tariffs." However, the technical inaccuracy is a significant weakness in an otherwise logical explanation.



omi1305
What ChatGPT has to say

Let's work through this explanation/paradox question from the basics!

We need something that explains: "Why would they buy services (hotels/food) in Country X but NOT buy goods (clothing/electronics)?"
Possible explanations:
  • Maybe there's a cost they face when bringing goods back home
  • Maybe the goods in Country X aren't as good/current
  • Maybe there's a penalty for bringing goods across the border

(A) Citizens of Country Y prefer their own country's fashions
  • This only explains clothing, not electronics
  • Too narrow - doesn't explain both
(B) Stores in Country X get latest fashions and technology months later than Country Y
  • Aha! This explains both clothing AND electronics
  • Even if cheaper, Country Y citizens don't want old/outdated items
  • They'd rather pay more at home for current items
(C) Citizens of Country X resent the buying power
  • How does resentment stop Country Y citizens from buying?
  • Doesn't explain the behavior
(D) Country Y imposes tariffs on imported goods
  • Strong contender! If they have to pay tariffs when bringing goods home, the savings disappear
  • This would explain why they don't buy goods to bring back
(E) Both currencies are weak compared to Country Z
  • Irrelevant - we're only comparing X and Y
  • Out of scope
Step 5: Compare the Two Best Options - (B) vs (D)
Both seem to work! Let's think more carefully:
(D) Tariffs explanation:
  • If true: Goods are cheap in X, but tariffs when entering Y make them expensive again
  • Problem: The question says goods are "more expensive in their home country, even when sales taxes are taken into account"
  • This suggests we're already accounting for taxes
  • Tariffs would likely be mentioned if they were the issue
(B) Outdated goods explanation:
  • If true: Goods in X are cheaper but months out of date
  • Country Y citizens prefer current items even if more expensive
  • This perfectly explains: They'll use cheap services (hotel/food) but won't buy outdated products
Why (B) is Better
The key insight:
  • Services (hotels, restaurants) are consumed immediately - freshness doesn't matter
  • Products (clothing, electronics) have a timeliness factor - people want the latest
Option (B) explains:
  • ✓ Why they use services in X (cheap and quality doesn't depend on newness)
  • ✓ Why they don't buy goods in X (cheap but outdated)
Simple Analogy
Imagine you're on vacation in a country where everything is cheaper but their stores only have last year's iPhone models and last season's clothing:
  • Would you eat at restaurants? Yes! (Food quality doesn't depend on being "latest")
  • Would you buy an iPhone 14 when iPhone 16 is available at home? Probably not!
Answer: (B)
The citizens want current fashions and technology, which arrive in Country X months late. They're willing to save money on services but not willing to compromise on having outdated goods.
Does this explanation make sense?
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The exchange rate between the currency of Country X and that of Countr 14 Nov 2025, 00:11
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D is the least possible answer feasible here, please reiterate the question, A is close out of all 5 options so A must me the answer.
souvik101990
The exchange rate between the currency of Country X and that of Country Y has historically favored the currency of Country Y. Because of this, citizens of Country Y often take their vacations in Country X, where the exchange rate makes hotels and restaurants more affordable. Yet, citizens of Country Y rarely purchase clothing or electronics in Country X, despite the fact that those items are more expensive in their home country, even when sales taxes are taken into account.

Which of the following, if true, would best explain the buying habits of the citizens of Country Y?


A. Citizens of Country Y prefer the fashions available in their own country.

B. Stores in Country X receive the latest fashions and technology several months after they are available in Country Y.

C. The citizens of Country X resent the buying power of the currency of Country Y.

D. The government of Country Y imposes tariffs on imported goods.

E. The currencies of Country X and Country Y are both weak compared to the currency of Country Z.


This question is part of the GMAT Club Critical Reasoning : Paradox Revision Project.
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