GMAT Critical Reasoning
Two years ago, the government of Runagia increased by 20 percent the government-provided pensions paid to Runagians over 65. The aim of the increase was to stimulate the economy in the rural regions of the country, where most pension recipients live. Statistics, however, show that there has been no increase in economic activity in those regions since then, but that there has been noticeably more spending in the urban areas.
Which of the following, if true, most helps to explain why the increase resulted in the unintended state of affairs described?
- A Until the pensions were increased, many Runagians over 65 in rural regions had been receiving support from their children who live in urban areas.
- B The pensions were increased when the number of people below the poverty level in rural areas of Runagia reached an all-time high.
- C City-dwellers in Runagia rarely travel to rural regions of the country.
- D The Runagian postal system is so inefficient that it can take up to three weeks for pension checks to reach recipients in rural areas.
- E On average, the pensions were higher in rural than in urban areas before the increase.
Correct Answer: A