(This passage is excerpted from material published in 1997) Whereas United States economic productivity grew at an annual rate of 3 percent from 1945 to 1965, it has grown at an annual rate of only about 1 percent since the early 1970’s. What might be preventing higher productivity growth? Clearly, the manufacturing sector of the economy cannot be blamed. Since 1980, productivity improvements in manufacturing have moved the United States from a position of acute decline in manufacturing to one of world prominence. Manufacturing, however, constitutes a relatively small proportion of the economy. In 1992, goods-producing businesses employed only 19.1 percent of American workers, whereas service-producing businesses employed 70 percent. Although the service sector has grown since the late 1970’s, its productivity growth has declined. Several explanations have been offered for this declined and for the discrepancy in productivity growth between the manufacturing and service sectors. One is that traditional measures fail to reflect service-sector productivity growth because it has been concentrated in improved quality of services. Yet traditional measures of manufacturing productivity have shown significant increases despite the under measurement of quality, whereas service productivity has continued to stagnate. Others argue that since the 1970’s, manufacturing workers, faced with strong foreign competition, have learned to work more efficiently in order to keep their jobs in the United States, but service workers, who are typically under less global competitive pressure, have not. However, the pressure on manufacturing workers in the United States to work more efficiently has generally been overstated, often for political reasons. In fact, while some manufacturing jobs have been lost due to foreign competition, many more have been lost simply because of slow growth in demand for manufactured goods. Yet another explanation blames the federal budget deficit: if it were lower, interest rates would be lower too, thereby increasing investment in the development of new technologies, which would spur productivity growth in the service sector. There is, however, no dearth of technological resources, rather, managers in the service sector fail to take advantage of widely available skills and machines. High productivity growth levels attained by leading edge service companies indicate that service sector managers who wisely implement available technology and choose skillful workers can significantly improve their companies’ productivity. The culprits for service-sector productivity stagnation are the forces such as corporate takeovers and unnecessary governmental regulation that distract managers from the task of making optimal use of available resources. 1 E 1. Which of the following, if true, would most weaken the budget-deficit explanation for the discrepancy mentioned in line 57? (A) Research shows that the federal budget deficit has traditionally caused service companies to invest less money in research and development of new technologies (B) New technologies have been shown to play a significant role in companies that have been able to increase their service productivity (C) In both the service sector and manufacturing, productivity improvements are concentrated in gains in quality (D) The service sector typically requires larger investments in new technology in order to maintain productivity growth than those of manufacturing (E) High interest rates tend to slow the growth of manufacturing productivity as much as they slow the growth of service-sector productivity in the United States 2 A 2. The passage states which of the following about the effect of foreign competition on the American manufacturing sector since the 1970’s? A. It has often been exaggerated. B. It has not been a direct cause of job loss. C. It has in large part been responsible for the subsequent slowing of productivity growth. D. It has slowed growth in the demand for manufactured goods in the United States. E. It has been responsible for the majority of American jobs lost in manufacturing. 3 A 3. It can be inferred from the passage that which of the following was true of the United States manufacturing sector in the years immediately prior to 1980? A. It was performing relatively poorly. B. It was in a position of world prominence. C. It was increasing its productivity at an annual rate of 3 percent. D. It was increasing its productivity at an annual rate of 1 percent. E. Its level of productivity was higher than afterward. 4 C 4. The author of the passage would be most likely to agree with which of the following statements about productivity improvements in United States service companies? (A) Such improvements would be largely attributable to efficiencies resulting from corporate takeovers. (B) Such improvements would depend more on wise implementation of technology than on managers' choice of skilled workers. (C) Such improvements would be more easily accomplished if there were fewer governmental regulations of the service sector. (D) Such improvements would require companies to invest heavily in the development of new technologies. (E) Such improvements would be attributable primarily to companies' facing global competitive pressure.

Last visit was: 18 Nov 2025, 21:33

It is currently 18 Nov 2025, 21:33

Toolkit

Reading Comprehension (RC)

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Go to My Error Log Learn more

Request Expert Reply

Confirm Cancel

Nov 18
GMAT Quiz #50 - Live GMAT Practice Covering Quant, Verbal, RC, & Data Insights
11:00 AM PST
-
12:00 PM PST
Join us in a live GMAT practice session and solve 30 challenging GMAT questions with other test takers in timed conditions, covering GMAT Quant, Data Sufficiency, Data Insights, Reading Comprehension, and Critical Reasoning questions.
Nov 22
GMAT RC Masterclass
11:00 AM IST
-
01:00 PM IST
Do RC/MSR passages scare you? e-GMAT is conducting a masterclass to help you learn – Learn effective reading strategies Tackle difficult RC & MSR with confidence Excel in timed test environment
Nov 23
Conquer Algebra on the GMAT Focus Edition
11:00 AM IST
-
01:00 PM IST
Attend this free GMAT Algebra Webinar and learn how to master the most challenging Inequalities and Absolute Value problems with ease.
Nov 25
Try OnDemand GMAT Masterclass
10:00 AM EST
-
11:00 AM EST
Prefer video-based learning? The Target Test Prep OnDemand course is a one-of-a-kind video masterclass featuring 400 hours of lecture-style teaching by Scott Woodbury-Stewart, founder of Target Test Prep and one of the most accomplished GMAT instructors.

Back to Forum

Create Topic

Whereas United States economic productivity grew at an annual rate of

1 2

mSKR

Joined: 14 Aug 2019

Last visit: 10 Mar 2024

Posts: 1,290

Own Kudos:

937

Given Kudos: 381

Location: Hong Kong

Concentration: Strategy, Marketing

Schools: IE (A) IIML-IPMX '22 (A) HKUST '22

GMAT 1: 650 Q49 V29 Verified score

GPA: 3.81

Schools: IE (A) IIML-IPMX '22 (A) HKUST '22

GMAT 1: 650 Q49 V29 Verified score

Posts: 1,290

Kudos: 937

07 May 2021, 05:36

Kudos

Bookmarks

lakshya14

In Q3. Isn't (A) and (E) mean the same thing. In (A), productivity was as less before, and in (E) productivity was higher after?

Absolutely not!

A. It was performing relatively poorly.
what is it?
It== United States manufacturing sector in the years immediately prior to 1980

It was performaing poorly --> yes
later after 1980s, this sector was improved.

E. Its level of productivity was higher than afterward.

==> opposite of A
level of productivity was higher before 1980 than that of after 1980

Since 1980, productivity improvements in manufacturing have moved the United States from a position of acute decline in manufacturing to one of world prominence.

Clearly A is the winner:)

ZulfiquarA

Joined: 06 Apr 2021

Last visit: 18 Nov 2025

Posts: 65

Own Kudos:

Given Kudos: 38

Posts: 65

Kudos: 39

08 May 2021, 03:16

Kudos

Bookmarks

My personal stats:-
Passage reading - 5:30 mins (approx)
Question 1 - 1:06 mins (approx) - Correct
Question 2 - 0:44 mins - Correct
Question 3 - 0:53 mins - Correct
Question 4 - 1:05 mins - Correct

What's yours?

Shhh103

Joined: 14 Oct 2021

Last visit: 23 Mar 2023

Posts: 44

Own Kudos:

Given Kudos: 29

Affiliations: edtech lIMITED

Location: India

Concentration: Finance, General Management

Schools: IIMA PGPX"20 Harvard '24 (D) Stanford '24 Haas '24

GMAT 1: 530 Q47 V17 Verified score

GMAT 2: 670 Q49 V32 Verified score

GPA: 3.06

Products:

Schools: IIMA PGPX"20 Harvard '24 (D) Stanford '24 Haas '24

GMAT 2: 670 Q49 V32 Verified score

Posts: 44

Kudos: 36

06 Aug 2022, 00:02

Kudos

Bookmarks

hey bb there is some problem here in the question above and that's why lots of people have confusion here.

the question 1 here dont have any timer set and rest all questions and ans are mixed. kindly check as it is confusing lot of discussion in the forum

kayarat600

Joined: 16 Oct 2024

Last visit: 11 Nov 2025

Posts: 75

Own Kudos:

Given Kudos: 87

Posts: 75

Kudos: 18

21 Nov 2024, 01:57

Kudos

Bookmarks

The problem with the first question is that the article clearly mentions that the trchkolgical improvements aren't beholden to budget deficits so how can you discount that option.

GMATNinja

GMAT Club Verbal Expert

Joined: 13 Aug 2009

Last visit: 18 Nov 2025

Posts: 7,445

Own Kudos:

69,779

Given Kudos: 2,060

Status: GMAT/GRE/LSAT tutors

Location: United States (CO)

GMAT 1: 780 Q51 V46 Verified score

GMAT 2: 800 Q51 V51 Verified score

GRE 1: Q170 V170 Verified score

GRE 2: Q170 V170 Verified score

Products:

Expert

Expert reply

GMAT 2: 800 Q51 V51 Verified score

GRE 1: Q170 V170 Verified score

GRE 2: Q170 V170 Verified score

Posts: 7,445

Kudos: 69,779

26 Nov 2024, 15:02

Kudos

Bookmarks

kayarat600

The problem with the first question is that the article clearly mentions that the trchkolgical improvements aren't beholden to budget deficits so how can you discount that option.

If you're asking about choice (A) in the first question, check out this post: https://gmatclub.com/forum/whereas-unit ... l#p1892767.

egmat

e-GMAT Representative

Joined: 02 Nov 2011

Last visit: 18 Nov 2025

Posts: 5,108

Own Kudos:

32,884

[1]

Given Kudos: 700

GMAT Date: 08-19-2020

Expert

Expert reply

Posts: 5,108

Kudos: 32,884

[1]

11 Sep 2025, 04:33

Kudos

Bookmarks

Question 3: Understanding Manufacturing Performance Pre-1980: RC Inference Strategy

This inference question asks about US manufacturing before 1980, requiring careful attention to the passage's timeline markers. Let me walk you through the core approach.

Step 1: Locate the Critical Evidence
The passage provides one key sentence about manufacturing around 1980:

Quote:

"Since 1980, productivity improvements in manufacturing have moved the United States from a position of acute decline in manufacturing to one of world prominence."

This "from...to" structure is your goldmine for inference questions.

Step 2: Decode the Timeline

Before 1980: "position of acute decline"
After 1980: "position of world prominence"

The word "acute" means severe or sharp, so manufacturing was performing poorly before 1980.

Step 3: Eliminate Trap Answers

Option (B) "world prominence" - This describes manufacturing after 1980, not before. Classic reversal trap.
Option (C) & (D) These reference the 3% and 1% productivity rates mentioned in the passage, but those rates describe overall economic productivity, not manufacturing specifically. The passage never gives specific percentage rates for manufacturing.
Option E "higher than afterward" - This directly contradicts the passage. Manufacturing improved after 1980, moving from decline to prominence.

Answer: (A) - Manufacturing was performing relatively poorly, as indicated by "acute decline."

Key Takeaway: In RC inference questions, transition phrases like "moved from X to Y" give you both the past state (X) and current state (Y). Focus on these structural clues rather than getting lost in the details.

To get the detailed solutions for all the questions of this passage, check out the complete passage and solutions on Neuron by e-GMAT. You'll learn the systematic approach that top scorers use to consistently identify correct inferences. Also, you can access detailed explanations for more such Official Guide RC questions and build custom practice quizzes here on Neuron.

sedsequi

Joined: 13 Sep 2025

Last visit: 26 Oct 2025

Posts: 1

Kudos: 0

19 Sep 2025, 03:30

Kudos

Bookmarks

Hii can someone please explain question 3 as manufacturing sector was performing good right ,so why that's not the answer

egmat

e-GMAT Representative

Joined: 02 Nov 2011

Last visit: 18 Nov 2025

Posts: 5,108

Own Kudos:

32,884

Given Kudos: 700

GMAT Date: 08-19-2020

Expert

Expert reply

Posts: 5,108

Kudos: 32,884

23 Sep 2025, 22:06

Kudos

Bookmarks

sedsequi

Hii can someone please explain question 3 as manufacturing sector was performing good right ,so why that's not the answer

sedsequi The answer lies in this crucial sentence: "Since 1980, productivity improvements in manufacturing have moved the United States from a position of acute decline in manufacturing to one of world prominence."

Breaking Down the Logic:

This sentence describes a transition:

Before 1980 (immediately prior): US manufacturing was in "acute decline"
After 1980: US manufacturing moved to "world prominence"

The phrase "moved from X to Y" tells us that X was the starting state (before 1980) and Y is where it ended up (after 1980).

Why Answer A is Correct:
"Acute decline" = performing relatively poorly. The word "acute" means severe or sharp, so the manufacturing sector was in a significant downturn immediately before 1980.

Process Diagnosis:
The challenge here is recognizing that "Since 1980" introduces a change - you need to reverse-engineer what came before based on what the passage says happened after. This is a classic GMAT RC pattern where the passage describes a transition, and you must infer the starting point.

You can also check out the detailed solution here- it breaks down the complete passage and shows the correct approach to handle these types of questions.

1 2

Moderators:

GMATNinja

GMAT Club Verbal Expert

7445 posts

GMATNinjaTwo

GMAT Club Verbal Expert

234 posts

Sajjad1994

GRE Forum Moderator

17289 posts

miag

188 posts

Prep Toolkit

Announcements

Master in Management, Finance, Business Analytics and more Master’s Programs!

Solving 705+ Level MSR Questions with Data Synthesis Skils

Tuesday, Nov 18, 2025
10:30am NY / 3:30pm London / 9pm Mumbai

Live Profile Evaluation Chat Session with ARINGO

Wednesday, November 19, 2025
09:00 am PDT | 10:30 pm IST
Location: GMAT Club Chat

Top GMAT Focus Debriefs

Whereas United States economic productivity grew at an annual rate of

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 Reading Comprehension (RC) Questions

Whereas United States economic productivity grew at an annual rate of

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