GMAT Critical Reasoning
Country Y uses its scarce foreign-exchange reserves to buy scrap iron for recycling into steel；Although the steel thus produced earns more foreign exchange than it costs, that policy is foolish；Country Y's own territory has vast deposits of iron ore, which can be mined with minimal expenditure of foreign exchange.
Which of the following, if true, provides the strongest support for Country Y's policy of buying scrap iron abroad?
- A The price of scrap iron on international markets rose significantly in 1987.
- B Country Y, s foreign-exchange reserves dropped significantly in 1987.
- C There is virtually no difference in quality between steel produced from scrap iron and that produced from iron ore.
- D Scrap iron is now used in the production of roughly half the steel used in the world today, and experts predict that scrap iron will be used even more extensively in the future.
- E Furnaces that process scrap iron can be built and operated in Country Y with substantially less foreign.exchange than can furnaces that process iron ore.
Correct Answer: E