Hi AquaZinc,
For both the questions, here's the explanation I can come up with:
For Question 1:For example: Last year, I gave you $10 for lunch. This year, I gave you $12 (a
20% increase). Also, a sandwich last year costed $5. This year, due to a shortage, it costs $8 (a
60% increase).
Even though, I gave you more money, you can now afford only 1.5 sandwiches instead of 2. Your "real" lunch budget went down.
By that logic, if the education spending went up by
30%, but the cost of everything else (books, salaries, operations, electricity) went up by
50% (inflation), the school can actually afford
less than it could before.
The
real spending has decreased.
For Question 2:You can come up with innumerable assumptions that you want based on the text of the passage. But for GMAT, the correct answer always has to be from the answer choices given below the passage / question. The best assumption from the choices would be the one that excludes another possibility. You can use
Negation test for that if you're not sure:
If the original assumption is that the vintage look is NOT the primary reason people visit for, then the negative (flipped) statement would be that vintage look IS the primary reason people visit for.
Impact:
If the original is not true, Joe's plan to modernise would be a disaster. If original is true, Joe's plan would work perfectly fine.
The incorrect answer choices would fail the Negation test with most of them
either not being related to the conclusion
or would be irrelevant to the context. As in, they won't affect the conclusion of the text.