In 1980, Country A had a per capita gross domestic product (GDP) that

Question

In 1980, Country A had a per capita gross domestic product (GDP) that was $5,000 higher than that of the European Economic Community. By 1990, the difference, when adjusted for inflation, had increased to $6,000. Since a rising per capita GDP indicates a rising average standard of living, the average standard of living in Country A must have risen between 1980 and 1990.

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

(A) Between 1980 and 1990, Country A and the European Economic Community experienced the same percentage increase in population.

(B) Between 1980 and 1990 the average standard of living in the European Economic Community fell.

(C) Some member countries of the European Economic Community had, during the 1980s, a higher average standard of living than Country A.

(D) The per capita GDP of the European Economic Community was not lower by more that $1,000 in 1990 than it had been in 1980.

(E) In 1990, no member country of the European Economic Community had a per capita GDP higher than that of Country A.

Silvers · Accepted Answer

Its D,

logic being.

Lets assume there are 2 numbers A and B . The difference between them is 5.
A- B = 5.

after say some mathematical operation the difference became 6
A-B = 6.

So, the difference rose by 1. Now this is only possible in 2 cases.

either A increased or B decreased.

Only way A could have increased is incase B either remained constant or the decrease in B was less than 1.

So D holds true, if the GDP of Eu was not lower than 1000 in 1990 then that means there was some increase in GDP of country A and so the standard of living improved.

ncp · Answer

Thanks gmacvik for your compliment. I am taking the GMAT in 7 days and need all the luck and practice, I can get.

I did consider A, but remember that we are comparing per capita GDP(GDP per person). It does not matter what the actual population numbers are, because we are only comparing the average GDP.

Makes sense?

In 1980

Per capita GDP of EU=3000
Per capita GDP of A=8000

Lets say that in 1990, this value dropped by more than 1000 for EU. Then,
Per capita GDP of EU=1999. 

Also, lets assume that the per capita GDP of A did not change.

Then, Difference in GDP=6001.

Assuming an appropriate inflation rate, the adjusted difference is 6000.

We can clearly see that D when false provides a possibility for the increase in the difference without any change(or even with a decrease) in per capita GDP of country A.

Thus D must be true, to make the conclusion in the argument.

Bunuel · Answer

OFFICIAL EXPLANATION

The correct answer choice is (D).

This is a challenging question. The author makes the following argument: Premise: In 1980, Country A had a per capita gross domestic product (GDP) that was $5,000 higher than that of the European Economic Community. Premise: By 1990, the difference, when adjusted for inflation, had increased to $6,000. Premise: A rising per capita GDP indicates a rising average standard of living. Conclusion: The average standard of living in Country A must have risen between 1980 and 1990. The author has fallen into the trap of believing that an increase in the difference between GDP’s means that the actual GDP of Country A has increased. Since that is not necessarily the case based on the number, you should look for the answer that assumes the total GDP of country A has not decreased.

Answer choice (A): The stimulus is clear that the GDP is a “per capita” (per person) figure. Hence, the author does not need to make an assumption regarding actual population increases.

Answer choice (B): The author does need to assume this is true because a bigger GDP gap does not prove that either must have fallen; the actual GDP of both Country A and the European Economic Community (EEC) could rise and the author’s argument would still be valid.

Answer choice (C): In the argument the author uses the GDP of the entire EEC. Since the figure for the EEC would necessarily be an average 
drawn from the numbers of multiple countries, the author does not need to make any assumptions about figures for individual countries within the EEC.

Answer choice (D): This is the correct answer. In order to conclude that an increasing difference in GDP translates to an actual increase in GDP, the author must assume that the GDP of the point of comparison, the EEC, did not fall dramatically.

Consider the following example, which assigns actual numbers to the GDP of each group in 1980, and then shows a variety of possibilities for the numbers in 1990:

1980 #1: 1990 #2: 1990 #3: 1990 #4: 1990  
GDP of Country A 105 107 156 96 105 
GDP of the EEC 100 101 150 90 99 
Difference +5 +6 +6 +6 +6

Each of the four examples for 1990 is consistent with the claim that there is a $6000 difference between the GDP of Country A and the GDP of the EEC. The first two examples for 1990, #1 and #2, show that the total GDP of Country A, and therefore the standard of living as defined in the stimulus, has risen. Example #3, shows that even though the gap has increased between the two groups, the actual GDP of Country A has decreased, and therefore the standard of living in Country A has decreased. This is inconsistent with the author’s conclusion, so the author must be assuming that this type of scenario cannot occur. In example #4, we see a second example that is incompatible with the author’s conclusion, one where the gap remains at $600, but the GDP of Country A remains the same. The author must assume that the fourth scenario also cannot occur, and that the GDP of the EEC cannot drop by the $1000 that is the amount of the increase in the gap. Hence, the author must assume that if the GDP of the EEC drops, it drops by less than $1000, and therefore answer choice (D) is correct. This is clearly a confusing answer, but do not forget that you can always apply the Assumption Negation Technique to any answer choice in an Assumption question. Answer choice (D), when negated, reads: “The per capita GDP of the European Economic Community was lower by more than $1,000 in 1990 than it had been in 1980.” This negation would definitely weaken the argument because it would create a scenario like #3 or one even worse than #4. Because the answer choice weakens the argument when negated, it must be the correct answer. Answer choice (E): This answer is incorrect for the same reason cited in answer choice (C): since the figure for the EEC would necessarily be an average drawn from the numbers of multiple countries, the author does not need to make any assumptions about the figures for individual countries within the EEC, regardless of year.

gmacvik · Answer

NC you are too fast and too accurate. YOu are definitely a 750+ candidate. Your answers to my preivious 2 CRs are proof of that. Your CR reasonings are amazing.

Could you elaborate your reasoning for choosing D and for not choosing A? I was stuck between A and D and couldn't understand the logic behind " not more that $1000" in D 

thanks

buckkitty · Answer

I agree. ncprasad, you are killing on verbal. You will do great on the test.

I initially went for A, I completely missed the "per capita" part of the stem. Kicking myself! They want me to miss that.

So D works because if it is true that the EC per capita GDP decreased by more than 1000 and Country A per capita GDP stayed the same, then standard of living in Country A would not have improved and the argument then falls apart, so this must be the assumption.

Is this a correct analysis of D (in my own words)?

gmatjon · Answer

The answer D although is the best correct one, it has some flaw in reasoning.
Answer D says that GDP per capita in EU did not decrease by no more than $1 000 in 1990 than in 1990.

If the decrease was lower than $1000, the assumption would hold perfectly true, since for 6000 increase in difference to hold true, at most $999 drop in GDP per capita of EU is necessary at worst case scenario.
The answer D assumes that the drop in GDP per capita in EU could be straight $1000
Thus let's say GDP per capita in 1980 in country A was $ 6000 and in EU $ 1000
Then let's say in 1990 it was still $6000 for Country A and EU's GDP per capita dropped to zero! (We can assume that from answer D). The conclusion that living standards improved in country A will not hold true then, as u can see from my example.

D is the best answer but it has the above mentioned flaw, what do u guys think?

karun0109 · Answer

Have a query
Since option D reads "not lower than more than a 1000" what if EU per captia GDP fell by exactly 1000, in that case the difference would be 6000 even if Country A's per capita GDP remained constant (Hence there would be no increase in std of living)

Raihanuddin · Answer

When u adjust something for inflation, u increase the value. So Constant GDP is not the issue here. U have to think that GDP of A has gone up. 
Since GDP of A has risen and gap also GDP of EU can't go down by more than 1000.

Example= A-9000, EU-4000
Inflation adjustment say - A has become- 9001.
So to make the difference exactly 6000 Eu GDP will be 3001. 
Now look at the difference- 4000-3001=999. 
There is no way to be more than 1000 lower GDP in case of EU.

Hope it is clear.

aaba · Answer

A is incorrect even though A sounds reasonable. Nevertheless, A already counts the population.
D is right b/c D tells that GDP did not decrease, but the gap still increases.

Kanika3agg · Answer

Conclusion - The standard of living of Country A increased.
Because the difference in GDP between Country A and EEC increased. 
Pre -thinking - The standard of living is directly proportional to the country's GDP but is that proportional to the difference?
For standard of living to increase, the GDP should increase but can we really say that GDP increased for Country A?
This might be possible if EEC GDP is constant or did not go lower than the stated GDP difference. Therefore, D.

As for A, the issue is that we are talking about per capita GDP here so the population has already been taken into account. Even if population increased or decreased, with the increase in the GDP the standard of living of the population will increase.

UChisb · Answer

Official Explanation from Powerscore CR Forum :

First, let's understand the difference between a rising amount and a rising relative amount (an increasing difference in two amounts, in other words). A numerical value going up, like someone's salary, say, or a country's overall GDP, is straightforward enough. More is more.

A little less straightforward is a notion like a rising GDP per capita where you could achieve it a few different ways: since it's measured per person, the overall amount could increase, the number of people could decrease, or some combination of those two could occur. That is, if your country brings in $1 million a year and has 1,000 people, that's $1,000/person. How can you up that number per person? (1) Make more money, like $2 million a year for those 1,000 people for $2,000 each, (2) distribute the total amount to fewer individuals (population shrinks), like $1 million a year to only 500 people for $2,000 each, or (3) some form of both. What we know is that at least one of those two things--more money or fewer people--must happen.

Slightly trickier still, to many people at least, is the idea of relative, or comparative, change: in this case comparing Country A's per capita GDP to that of the EEC over time. A's was $5,000 more in 1980, and rose to $6,000 more in 1990...but what can we really know with certainty from that? In other words, does that guarantee that A's GDP actually increased? Nope! The alternative is that the EEC's GDP per capita decreased, and that accounts for the larger gap between them. So you have two ideas at work: the varying ways that a per capita GDP of some group can change, AND the comparative nature of two GDPs related to each other over time.

So what must we show for the conclusion that Country A's per capita GDP, and thus its standard of living, rose from 1980 to 1990? We need to rule out the alternative possibility suggested above (the other possible cause of the increasing gap between A and EEC): we need to show that the EEC's GDP didn't go down and create the larger difference. That's exactly what answer choice (D) does, so it is correct.

Answer choice (A) on the other hand has no effect here. If both populations increased at the same rate the only thing that even begins to impact (and it still doesn't, really) is the individual GDPs of Country A and the EEC, for reasons mentioned in the paragraph above about per capita change. This argument though is about the comparison between A and the EEC and whether that proves A's per capita GDP increased, so the right answer needs to address the difference in the years measured. (A) doesn't.

junii · Answer

Please explain all
GDP per capita Total GDP / Total population
So it does matter the changes in total population
What am i missing.
 VeritasKarishma

KarishmaB · Answer

1980:
GDP per capita for A - GDP per capita for EEC = 5000

1990:
GDP per capita for A - GDP per capita for EEC = 6000

Higher the GDP per capita, higher the standard of living.

Conclusion: Country A's standard of living increased from 1980 to 1990.

Note that we are given that the diff in the GDPs per capita increased. This can happen in multiple ways: 
- If A's GDP per capita increases by 1000, but EEC's stays the same. 
- If EEC's GDP per capita decreases by 1000, but A's stays the same. 
- If A's GDP per capita decreases by 500, but EEC's decreases by 1500.
... and so on...

Think of the numbers on the number line. Diff between them is 5000.

________________ EEC ____________________(5000) _________________A_______

How can you increase it to 6000? In many ways.
________________ EEC ____________________(5000) _________________A_______
________________ EEC ____________________(6000) ____________________________A________

or
________________ EEC ____________________(5000) _________________A_______
_________EEC ____________________________(6000) _________________A_________

or

________________ EEC ____________________(5000) _________________A_______
___EEC ____________________________(6000) _________________A_________

or many other ways.

To conclude that A's standard of living has increased, we are assuming that A's GDP has increased and that is why the diff between them has increased. What if A's GDP per capita actually stayed the same or decreased but EEC's GDP per capita decreased by 1000 or more? (cases 2 and 3 above). Then we cannot say that A's GDP per capita must have increased.

We are assuming that EEC's GDP per capita did not decrease by more than 1000.

Hence (D) is correct.

The population increase/decrease over this period is irrelevant. We are comparing GDP per capita.

Think about it this way:
Factory A made 200 chairs yesterday.
Factory B made 300 chairs yesterday.
Can I say factory B is more productive? That depends on how many workers work in each factory. 
Say if 10 workers work in factory A and 20 workers work in factory B, then factory A is more productive. It produces 20 chairs per worker. 
So to measure productivity, we need to compare chairs per person made, not just chairs.

Now if I say that today factory A made 25 chairs per worker and factor B made 22 chairs per worker, can I say that factory A is more productive? Sure. It made higher number of chairs per worker. Does it matter how many total chairs each made and how many workers each party had? No. All that is already accounted for in arriving at chairs per person.

unraveled · Answer

In 1980, Country A had a per capita gross domestic product (GDP) that was $5,000 higher than that of the European Economic Community. By 1990, the difference, when adjusted for inflation, had increased to $6,000. Since a rising per capita GDP indicates a rising average standard of living, the average standard of living in Country A must have risen between 1980 and 1990.

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

(A) Between 1980 and 1990, Country A and the European Economic Community experienced the same percentage increase in population. - WRONG. The leads to decrease in per capita GDP if GDP of respective parties remains same. OR increase accordingly if GDP increase for both. For the difference to increase it means one has to witness more increase in GDP than the other. On the other hand, if population didn't increase by same percentage then too it is possible that difference would have increased by $1000. For that to happen, if population increase percentage of A is less then that of EEC's, GDP of A would have to increase far more than EEC's. But again to do so we need to make assumptions which is why this choice is not the right answer.

(B) Between 1980 and 1990 the average standard of living in the European Economic Community fell. - WRONG. Like A this too has so many ifs and buts. But let's just consider the opposite. If the ASoL didn't fell(remained constant or slighlty increased) and A's increased far more than EEC's then too the difference could have been $1000. So, this is not a necessary assumption. Like A this too requires so many assumptions for it to hold and that's why a wrong answer choice.

(C) Some member countries of the European Economic Community had, during the 1980s, a higher average standard of living than Country A. - WRONG. May be or may be not. But that's not the assumption that can make the conclusion as the passage have. Looks like more of an exception when some EEC countries having a higher ASoL.

(D) The per capita GDP of the European Economic Community was not lower by more that $1,000 in 1990 than it had been in 1980. - CORRECT. This is to be kept as a backup someone could not understand it on first read. POE helps here. So, till now we were looking for comparison of both parties' ratios but this choice made a claim absolutely point blank. The trouble that the passage has conclusion in A but this choice talks about EEC only.

Now, official answer post by Bunuel proves this how it is right. But here's my take but do note that considering ratios for this would take longer(four parameters) to answer than considering simply per capita GDP(two numbers).

Taking cues from his post. 
Case 1: Both pcGDP increase 
1980: A - 15000, EEC - 10000; difference - 5000
1990: A - 20000, EEC - 14000; difference - 6000

Case 2: Both pcGDP decrease
1980: A - 15000, EEC - 10000; difference - 5000
1990: A - 10000, EEC - 4000; difference - 6000

Case 3: A increases and EEC remains constant(not related to passage but for academic understanding)
1980: A - 15000, EEC - 10000; difference - 5000
1990: A - 20000(atleast 16k or more), EEC - 10000; difference - >6000

Case 4: A constant and EEC decreases(not related to passage but for academic understanding)
1980: A - 15000, EEC - 10000; difference - 5000
1990: A - 15000, EEC - 9000(at max); difference - 6000

Case5: A increases and EEC decreases(not related to passage but for academic understanding) 
1980: A - 15000, EEC - 10000; difference - 5000
1990: A - 20000, EEC - 9000; difference - 11000

From above Case 2 and 4 punctures the conclusion. Thus, the right answer.

(E) In 1990, no member country of the European Economic Community had a per capita GDP higher than that of Country A. - WRONG. Like C this too considers an exception. But logically too this is not a necessary condition for the conclusion.

This is a good question where ratios are tested eventually and based on which a conclusion is made. 
The question is how is it possible that the difference between the two ratios(per capita GDP = GDP/population) if increases makes one superior to another. Normally, a choice which has facts and figures exactly the same we have in the passage it raises eyebrows and needs to be double checked.

So, the passage suggests that
rising per capita GDP ----> rising average standard of living

Hence either we look to prove the right answer right or eliminate others.
Thankfully, in this we have POE working.

Answer D.

VerbalBot · Answer

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In 1980, Country A had a per capita gross domestic product (GDP) that

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In 1980, Country A had a per capita gross domestic product (GDP) that

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