The following excerpt from a fictitious economic journal discusses a

Question

The following excerpt from a fictitious economic journal discusses a fictitious type of metric called the  shrumeroo  ratio.

Economists who study certain types of marketing corporations have come up with a new metric called the  shrumeroo  ratio that strongly correlates to the level of success that such corporations have in creating a high ROI on investments in marketing. Economists have determined that corporations with a high  shrumeroo  ratio are also likely to have other shared characteristics in common with other corporations with high ratios. They have found that such corporations will have a high employee to revenue ratio but a low expense to employee ratio as well as employee salaries that are lower than the national average. Economists have also noted that those marketing corporations that do a large amount of direct marketing and high employee turnover generally have a low  shrumeroo  ratio. Future proposed studies of the  shrumeroo  ratio involve expanding the application of the ratio to corporations in the financial industry.

Based on the definition of the  shrumeroo  ratio that can be inferred from the previous paragraph, which of the following characteristics of a corporation is typically associated with a high  shrumeroo  ratio and which ones are typically associated with a low  shrumeroo  ratio? Make only two selections, one in each column.

Mona2019 · Answer

IMO,
Low ROIs on money spent on marketing can indicate low shrumeroo ratio

Overall expenses per employee that are lower than national average might indicate high ratio.

Please share the OA/OE if you have it

Posted from my mobile device

Sajjad1994 · Answer

OA is updated

Low  shrumeroo  ratio : Low ROIs on money spent on marketing.
 High  shrumeroo  ratio : Overall expenses per employee that are lower than the average for the country.

Thank you

Sajjad1994 · Answer

Official Explanation

Low shrumeroo ratio: B
High shrumeroo ratio: E

Solutions: Because the stimulus specifically mentions that shrumeroo ratios are highly correlated with high ROI on marketing investments, it is clear that choice B would be consistent with a low shrumeroo ratio. So the solution in the left-hand column is B. And the stimulus also mentions that high shrumeroo ratios correlate with low expense-to-employee ratios, meaning that answer choice E would appear with a high shrumeroo score. Accordingly, choice E is correct in the right-hand column.

SirSanguine · Answer

Hi  Sajjad1994 
As Per the passage:
"high employee to revenue ratio but a low expense to employee ratio as well as employee salaries that are lower than the national average"
As Per the options:
" Overall expenses per employee  that are lower than the average for the country."
The passage is talking about salary being lower than national average whereas options isnt. The passage talks about low expense to employee ratio...this seems a very loose translation.
Can we expect such overly comfortable translation in GMAT?
Or is my undertanding lacking something? Please discuss.

cheshire · Answer

Yes, on the GMAT you’ll almost always see ideas paraphrased rather than quoted word-for-word. The passage says “low expense-to-employee ratio” and “lower salaries,” and the choice “lower expenses per employee” simply bundles those together. What matters is the  logic  (they spend less per employee), not an exact match of terms.

Anandanwar · Answer

Hello,

Here it says "the shrumeroo ratio that STRONGLY CORRELATES to the level of success that such corporations have in creating a high ROI on investments in marketing"

Does 'Strongly correlates' mean strong positive correlation?

Regards,
Ankit

WhitEngagePrep · Answer

Hi Ankit! Great catch! And honestly, this is just one of a TON OF MASSIVE LOGICAL AND QUALITY ISSUES with this problem. Happy to list out all of the things wrong, but just know that this question DOES NOT have any verifiable right answers for either column . As I try to reinforce - studying from BAD materials is worse than not studying at all, so please please please throw this question out of your mind completely! First, let's talk the minor stuff that makes this so clearly not GMAT-level quality. So this is the grammar and style stuff (in the order they appear): "R OI on investments ..." = the OI in the acronym literally means "on investments" so you don't say "the return on investments on investments." " shared characteristics in common " = redundant, if they're shared, they're in common. " marketing corporations that do a large amount of direct marketing and high employee turnover" = not parallel. Marketing corps THAT DO ... and HIGH? It should be "marketing corporations that DS a large amount of direct marketing and HAVE high employee turnover" "which of the following characteristics of a corporation is.... and which ones are typically associated" = each column is a SINGLE characteristic, so saying which ONES for the second column doesn't make sense. Should be "which IS" And even the answer choices have periods when none are complete sentences (also something the real test wouldn't do). Okay, annoying, but let's say we decide to ignore the poor editing cause we can live with that or at least sortof overlook it. Let's talk about the wildly problematic and even downright WRONG elements, in the order they appear again in the argument itself. " a fictitious type of metric called the shrumeroo ratio ." = It's a "ratio" so the writers would spell out what it is a ratio OF. If it was just a metric without then calling it a ratio (maybe call it a score), then maybe okay. But as is, the GMAT isn't going to call something a ratio and not explicitly tell you what it's the ratio of. And honestly, even if they make up stuff, they give far more explanation about what it is or how it's derived than this! "have come up with a new metric called the shrumeroo ratio that strongly correlates to the level of success that such corporations have" = here is the point that you made. S trongly correlates doesn't mean anything without more information. They could say that "a high shrumeroo rating strongly correlates to a high level..." or they could say that it has a strong positive correlation to indicate that increasing one increases the other. So any answer choice that expects you to just "know" the correlated relationship is going to be a problem. The real writers and editors would be clear about this. "employee to revenue" and "expense to employee" ratio is sloppier language that the writers would use. They would mathematically spell that out (# of employees divided by ....). Not to mention that these should be hyphenated. Finally, the nail in the coffin are the two answer choices that the writer claims are "correct." Correlates to LOW ratio: Low ROIs. - Nope, as written we CANNOT infer this based on what we talked about above. A strong correlation doesn't tell me if they are positively or negatively correlated without more info. Correlates to HIGH ratio: Overall expenses per employee that are lower than the average for the country. - Nope, as written we CANNOT infer this either. The sentence in question is the following: The structure of this sentence is as follows: Corps will have a (high X but a low Y) as well as (Z). From the structure of this sentence, GMAT writers would have made everything parallel (which it isn't). The Z element doesn't start with high or low (or a modifier), it starts with the noun. But, here comes the real issue. The modifier "that are LOWER than the national average" ONLY applies to the employee salaries. It would make NO sense to apply this relative pronoun modifier randomly past Z to include Y when it wouldn't include the X that Y is locked in with. Therefore NO, we have no idea if the overall expenses per employee are lower than the average, only that they are LOW. So again, nice catch - time to ignore this problem!

Whit

The following excerpt from a fictitious economic journal discusses a

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Low shrumeroo ratio	High shrumeroo ratio	Statement
		Shares characteristics in common with corporations in the financial industry.
		Low ROIs on money spent on marketing.
		Has no direct marketing element as part of their corporate strategy.
		Fewer employees than other corporations in the same space.
		Overall expenses per employee that are lower than the average for the country.