Rice is a staple crop in the country of Bhupet, and ...

Question

Rice is a staple crop in the country of Bhupet, and enough is produced each year to both meet the country's demand and be a major export. This season, however, rice yields fell 20% due to infestation by rice blast fungus. Because rice commands a somewhat higher price on the export market than the domestic market, economists warn that the Bhupet people will not be able to buy the rice they need. In order to help the local economy, therefore, the Prime Minister of Bhupet has proposed distributing state-subsidized rice coupons to each citizen.
 
Which of the following, if true, most strongly calls into question the likelihood that implementation of the Prime Minister's proposal will have the desired consequence?

(A) Even if the rice coupons do not allow citizens of Bhupet to consume as much rice as they do in a typical year, the existence of the coupons will help maintain general confidence in the economy.

(B) Rice distributors in Bhupet are willing to sell rice to the government at a price below the domestic market price.

(C) Rice is a fundamental component in the diet of most citizens of Bhupet, and it is their main source of vitamin B1.

(D) The exportation of rice makes up 75% of Bhupet's foreign trade and is the direct or indirect source of employment for 10% of the adult population.

(E) Not all citizens of Bhupet would require state-subsidized rice coupons to afford their usual rice intake.

GH-12.18.12 - OE to follow

ankur1901 · Accepted Answer

Keyword here is  In order to help the local economy, therefore, the Prime Minister...... 
We should find connection between distribution of coupons and the impact on economy. Most of the ans choices provide us the impact on people or the rice distributors.
Only choice D is relevant, since less production of rice results in the country to import rice and approx 10% will lose employment. That will not improve the economy.

akhil911 · Answer

Why is B not correct here.
As far as i understand if the Rice distributors in Bhupet are willing to sell rice to the government at a price 
below the domestic market price then also giving Rice coupons would not help because the Govt is buying at a higher price and then subsidizing it.
Say the govt buys at $100 per quintal and gives Rice coupons that give a subsidy of $20 per quintal and in the market outside the rice can be taken for $80 then the govt is unnecessarily increasing its fiscal limit.

avohden · Answer

Official Explanation

Answer: D -    This is a weaken question. The Prime Minister desires to aid the local economy (that's the desired consequence) by providing free rice. The underlying assumption is that, if people can't buy the rice they need, the economy will suffer; if people can buy the rice they need, the economy will be helped. Consider each choice in turn:

(A) This strengthens the argument: The coupons will make people more confident in the economy.
(B) This, if anything, strengthens the argument; the subsidized rice will not cost the government as much as it might otherwise. For the most part, though, it is not relevant to the argument.
(C) Again, this appears to strengthen the argument--it shows how important rice is to citizens. Like (B) though, it isn't directly related to the economy. 
(D) This is correct. While the argument emphasizes the importance of the domestic market, this choice shows us that the export market has a direct effect on the health of the domestic economy. If the government acquires a large amount of rice, it is likely that rice exports will be curtailed by that amount, thus harming the economy. 
(E)This is irrelevant; the argument would still be valid if only a large percentage of citizens required the coupons.

kanigmat011 · Answer

Can someone explain logic behind D
Not convinced with the logics stated above

vishwaprakash · Answer

Argument :
Rice is staple food. This year Production dropped, Demand in domestic market is same. Export gives good return, so Export will not decrease. So for local market Prices will go up and local residents will not be able to afford. 
To tackle. Govt will give subsidized coupon.

Assumption : (Govt must have made while making this plan)
1. Only prices went up but stocks are available for local market at high prices. hence subsidy can help people to afford.
2. Export will decrease or Product available (domestic share) in local market will not go down.

Pre thought weaker.
1. Product (Rice) itself is not available.
2. Export will increase or cannot decrease.

POE

A) Even if the rice coupons do not allow citizens of Bhupet to consume as much rice as they do in a typical year, the existence of the coupons will help maintain general confidence in the economy.
Option says, Coupons will not compensate for everything but it will help to some extent. hence it is weak strengthener ( if at else it connects) . INCORRECT

(B) Rice distributors in Bhupet are willing to sell rice to the government at a price below the domestic market price.
Opposite effect. It says that supply will increase. Strengthen the plan.

(C) Rice is a fundamental component in the diet of most citizens of Bhupet, and it is their main source of vitamin B1.
Nice Fact - Does not relate to argument or plan - Incorrect

(D) The exportation of rice makes up 75% of Bhupet's foreign trade and is the direct or indirect source of employment for 10% of the adult population.
This is only option that matches pre-thinking. Based on this option we can say, export will not decrease and supply to domestic market wont increase.

(E) Not all citizens of Bhupet would require state-subsidized rice coupons to afford their usual rice intake.
Nice Fact some people may be super rich they may afford rice at any price so what we are worried about general population- Does not relate to argument or plan - Incorrect

Out of all the option D is only option that touches argument. Rest all does not make sense.

Option D is correct.

VerbalBot · Answer

Automated notice from GMAT Club VerbalBot: 

A member just gave Kudos to this thread, showing it’s still useful. I’ve bumped it to the top so more people can benefit. Feel free to add your own questions or solutions.

 This post was generated automatically.

Rice is a staple crop in the country of Bhupet, and ...

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

GMAT Critical Reasoning (CR) Questions

Rice is a staple crop in the country of Bhupet, and ...

Prep Toolkit

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