GMAT Critical Reasoning
Plan: Concerned about the welfare of its senior citizens, the government of Runagia decided two years ago to increase by 20 percent the governmentprovided pension paid to all Runagians age sixty-fi ve and older. Result: Many Runagian senior citizens are no better off fi nancially now than they were before the increase. Further information: The annual rate of infl ation since the pension increase has been below 5 percent, and the increased pension has been duly received by all eligible Runagians.
In light of the further information, which of the following, if true, does most to explain the result that followed implementation of the plan?
- A The majority of senior citizens whose fi nancial position has not improved rely entirely on the government pension for their income.
- B The Runagian banking system is so ineffi cient that cashing a pension check can take as much as three weeks.
- C The prices of goods and services that meet the special needs of many senior citizens have increased at a rate much higher than the rate of infl ation.
- D The pension increase occurred at a time when the number of Runagians age sixty-fi ve and older who were living below the poverty level was at an all-time high.
- E The most recent pension increase was only the second such increase in the last ten years.
Correct Answer: C