Which of the following most logically completes the passage?
Concerned about the well-being of its elderly citizens, the government of Runagia decided two years ago to increase by 20 percent the government-provided pension paid to all Runagians over 65. The annual rate of inflation since then has been below 5 percent, and the increase has been duly received by all eligible Runagians. Nevertheless, many of them are no better off than they were before the increase, in large part because __________.The pension increased by 20 percent, and general inflation was below 5 percent per year. So we need a reason why many elderly people still did not gain real purchasing power.
The key idea is that their own necessary expenses may have risen much faster than general inflation.
(A) They rely entirely on the government pension for their income
This does not explain why they are no better off. If their only income increased by 20 percent, they should generally be better off unless their costs also rose sharply.
(B) Runagian banks are so inefficient that it can take up to three weeks to cash a pension check
This may cause inconvenience, but it does not show that the elderly are no better off overall after receiving a larger pension.
(C) The prices of goods and services for special needs of elderly people have increased at a rate much higher than the rate of inflation
This is correct. If the things elderly people especially need became much more expensive, then the 20 percent pension increase may have been offset by those higher costs. That explains why many are
no better off.
(D) The pension was increased at the time when the number of elderly Runagians below the poverty level reached an all-time high
This gives background, but it does not explain why the increase failed to improve many people’s situation.
(E) The increase was only the second such increase in the last ten years
This does not explain the result. The issue is whether the recent 20 percent increase improved their situation, not how often pensions had been increased before.
Answer: (C)