GMAT Critical Reasoning
Twelve years ago and again five years ago, there were extended periods when the Darfir Republic's currency, the pundra, was weak: its value was unusually low relative to the world's most stable currencies. Both times a weak pundra made Darfir's manufactured products a bargain on world markets, and Darfir's exports were up substantially. Now some politicians are saying that, in order to cause another similarly sized increase in exports, the government should allow the pundra to become weak again.
Which of the following, if true, provides the government with the strongest grounds to doubt that the politicians' recommendation, if followed, will achieve its aim?
- A Several of the politicians now recommending that the pundra be allowed to become weak made that same recommendation before each of the last two periods of currency weakness.
- B After several decades of operating well below peak capacity, Darfir's manufacturing sector is now operating at near-peak levels.
- C The economy of a country experiencing a rise in exports will become healthier only if the country's currency is strong or the rise in exports is significant.
- D Those countries whose manufactured products compete with Darfir's on the world market all currently have stable currencies.
- E A sharp improvement in the efficiency of Darfir's manufacturing plants would make Darfir's products a bargain on world markets even without any weakening of the pundra relative to other currencies.
Correct Answer: B