Two years ago, the government of Runagia increased by 20 percent the

Question

Two years ago, the government of Runagia increased by 20 percent the government-provided pensions paid to Runagians over 65. The aim of the increase was to stimulate the economy in the rural regions of the country, where most pension recipients live. Statistics, however, show that there has been no increase in economic activity in those regions since then, but that there has been noticeably more spending in the urban areas.

Which of the following, if true, most helps to explain why the increase resulted in the unintended state of affairs described?

A. Until the pensions were increased, many Runagians over 65 in rural regions had been receiving support from their children who live in urban areas.

B. The pensions were increased when the number of people below the poverty level in rural areas of Runagia reached an all-time high.

C. City-dwellers in Runagia rarely travel to rural regions of the country.

D. The Runagian postal system is so inefficient that it can take up to three weeks for pension checks to reach recipients in rural areas.

E. On average, the pensions were higher in rural than in urban areas before the increase.

rajeevrks27 · Accepted Answer

Two years ago, the government of Runagia increased by 20 percent the government-provided pensions paid to Runagians over 65. The aim of the increase was to stimulate the economy in the rural regions of the country, where most pension recipients live. Statistics, however, show that there has been no increase in economic activity in those regions since then, but that there has been noticeably more spending in the urban areas.

A discrepancy has been cited,so the correct answer will make sure that both sides of the discrepancy remain valid and that both sides can co-exist.

Which of the following, if true, most helps to explain why the increase resulted in the unintended state of affairs described?

A. Until the pensions were increased, many Runagians over 65 in rural regions had been receiving support from their children who live in urban areas.
The pensioners were receiving support from their children until the hike in the pension. Now, after the hike the children have stopped the money they used to send to their parents and are spending the additional money( besides their money) in their native urban areas. So the economic activity remains same in the rural whereas it increases in the urban because more money is available to urban dwellers. Correct
B. The pensions were increased when the number of people below the poverty level in rural areas of Runagia reached an all-time high.
Doesn't resolve the issue. X.
C. City-dwellers in Runagia rarely travel to rural regions of the country.
Doesn't resolve the issue. X.
D. The Runagian postal system is so inefficient that it can take up to three weeks for pension checks to reach recipients in rural areas.
still they are getting pension after 3 weeks so the activity should increase after 3 weeks. X
E. On average, the pensions were higher in rural than in urban areas before the increase.
Very generic + if the pensions were already higher in rural than in urban then the increase in rural should be more vis-a vis urban.X

ankit0411 · Answer

A) if the pension earlier for the citizens was 100 and old people used to spend 120 , they would receive the +20 from their children in urban areas.

Now pension is up to 120, and therefore, the additional 20 bucks now remain with the children in urban areas and hence they tend to spend more now.

Therefore, and increase in spending in urban areas.

HTH !

p2bhokie · Answer

Option A is the only option that addresses both the rural and urban population. All other options are either irrelevant or address the issue partially. hth.

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emcheeks · Answer

Two years ago, the government of Runagia increased by 20 percent the government-provided pensions paid to Runagians over 65. The aim of the increase was to stimulate the economy in the rural regions of the country, where most pension recipients live. Statistics, however, show that there has been no increase in economic activity in those regions since then, but that there has been noticeably more spending in the urban areas.

Which of the following, if true, most helps to explain why the increase resulted in the unintended state of affairs described?

A. Until the pensions were increased, many Runagians over 65 in rural regions had been receiving support from their children who live in urban areas.

From the premise, we know that old ppl get more pensions than before. Now we know, by choice A, these old ppl got their money from their kids in urban areas --> the kids have to, say, give parts of their salary to their parents. But since these old ppl got pensions from the government, the kids can now save that part of their salary and spend in on themseleves --> more spending in rural areas.

D. The Runagian postal system is so inefficient that it can take up to three weeks for pension checks to reach recipients in rural areas.

Even if rural areas receive checks later, the premises are based on the fact that, pension in  both  urban and rural areas are  delivered . Therefore, it doesn't explain the increase in spending in urban areas.

In addition, even if you didn't get the logic in A when you were solving this problem, you can still get A by POE since B,C,D,E were all essentially talking about the  similarities between  or  same things happen in  urban areas and rural areas. And please remember similarities/same thing doesn't explain differences.

Yudhajit22 · Answer

Hello,

Can someone please clarify this ?

--> A. Until the pensions were increased, many Runagians over 65 in rural regions had been receiving support from their children who live in urban areas.

Since the option mentions --   Until the pensions were increased, many Runagians over 65 in rural regions had been receiving support from their children   --> Its understood that now they don't receive any support.

But how do we understand the following from this option?

1)Rural people are not spending much ?
2)The urban guys (children) are spending the surplus now ?

Two years ago, the government of Runagia increased by 20 percent the

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Two years ago, the government of Runagia increased by 20 percent the

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