In the country of Marut, the Foreign Trade agency’s records

Question

In the country of Marut, the Foreign Trade agency’s records were reviewed in 1994 in light of information then newly available about neighboring Goro. The review revealed that in every year since 1963, the agency’s projection of what Goro’s gross national product (GNP) would be five years later was a serious underestimate. The review also revealed that in every year since 1963, the agency estimated Goro’s GNP for the previous year—a Goro state secret—very accurately.

Of the following claims, which is most strongly supported by the statements given?

Option A
Option B
Option C
Option D
Option E

(This question is from Official Guide. Therefore, because of copyrights, the complete question cannot be copied here. The question can be accessed at GMAT Club)

Solution

Understand the Passage

In the country of Marut, the Foreign Trade agency’s records were reviewed in 1994 in light of information then newly available about neighboring Goro.

In Marut, some agency’s records were reviewed in 1994 after some new information about neighboring Goro became available.

The review revealed that in every year since 1963, the agency’s projection of what Goro’s gross national product (GNP) would be five years later was a serious underestimate.

Every year since 1963, the agency made a prediction about what Goro’s GNP would be five years later. All these predictions were serious underestimates. (Now, the newly available information about Goro probably contains data about its GNP since 1963. On comparing, we find that Marut’s agency was greatly underestimating Goro’s GNP.)

The review also revealed that in every year since 1963, the agency estimated Goro’s GNP for the previous year—a Goro state secret—very accurately.

The agency also made another estimate every year: what was Goro’s GNP for the previous year. In light of new information, we can see that these estimates were very accurate.

Predict an Answer

This question is an inference question. The passage contains a list of facts. There is no conclusion in the passage.

The agency made two estimates every year since 1963: one about Goro’s GNP five years later and one about Goro’s GNP for the previous year. Till 1994, the former estimate was always a serious underestimate, and the latter estimate was always very accurate.

Let’s consider the year 1982. One estimate of Goro’s GNP for year 1982 must have been made in 1977, and another one in 1983. Since the former one was a serious underestimate and the latter one very accurate, we can infer that the latter one was greater (in numerical value) than the former one. And this difference must have existed for every such pair of estimates.

Option Analysis

(A) Incorrect. We cannot infer this statement from the given facts. It is possible that Goro’s GNP remained the same from 1963 to 1994. This possibility does not contradict any of the facts given in the passage. Besides, the option says, ‘fluctuated GREATLY’. Since we cannot be sure whether Goro’s GNP fluctuated, we cannot say that it fluctuated GREATLY.

(B) Incorrect. The reason why Goro had not released its data before 1995 is not given. One of the possible results of Goro’s not releasing data was that the agency did not make accurate predictions. However, we cannot say that this was the intention of Goro for not releasing data. Confusing an implication of a certain action with the intention behind that action is one of the very common traps in CR (and even in RC). For example: If the passage says that X resulted in Y, the option will say that the intention behind undertaking X was to cause Y. This option is incorrect. We cannot talk about the intention just by looking at the result. I may take GMAT to get into some degree program. However, I may end up doing GMAT tutoring after scoring spectacularly high on GMAT. This does not mean that I took GMAT to get into GMAT tutoring. Right?

(C) Incorrect. It is entirely possible, given the facts, that the agency underestimated what Goro’s GNP would be five years later by the SAME amount year after year. It is also possible that the amount by which the agency underestimated the GNP it projected for Goro DECREASED over time i.e. the five-year projections became less and less serious underestimates over the years (less serious than previous years; however, still serious in the absolute sense).

For example: In 1963, the agency underestimated Goro’s GNP for 1968 by $50 billion. In 1964, the agency underestimated Goro’s GNP for 1969 by $49.9 billion. In 1965, the agency underestimated Goro’s GNP for 1970 by $49.8 billion. And so on. All of these estimates are probably serious underestimates, but they are probably becoming less and less serious over time.

(D) Correct. We can infer that the agency had REASON TO THINK that some of its 5-year projections were inaccurate. We, however, CANNOT INFER that the agency actually THOUGHT so.

Let’s understand how.

In 1963, the agency would have made a projection for Goro’s GNP for the year 1968. Let’s say it was X.

In 1969, the agency would have again estimated Goro’s GNP for 1968. Let’s say it was Y.

We know from the passage that X was a serious underestimate and that Y was a very accurate estimate. Given this information, we can understand that X and Y must have been very different numbers. Now, since Y was a later estimate and was very different from X, there was a reason to believe that the X was an inaccurate estimate. Why? Because both X and Y cannot be accurate while being substantially different and because Y is a recent estimate and thus expectedly a better estimate than X.

So, we can say that the agency had reason to think that some of its five-year projections were inaccurate. However, since we don’t know that the agency compared its 5-year projections with its last-year estimates, we cannot be sure that the agency actually thought that some of its projections were inaccurate.

(E) Incorrect. Whether the five-year projections had impact on economic planning in Marut cannot be inferred at all from the passage. The projections might have had substantial impact on the economic planning in Marut. This possibility does not contradict anything given in the passage.

If you have any doubts regarding any part of this solution, please feel free to ask in the comments section.

About Chiranjeev Singh

An Alumnus of IIM Ahmedabad and with scores of 780 (2017) and 770 (2013) on GMAT and 99.98%ile on CAT, Chiranjeev is one of the most qualified GMAT tutors in India. Chiranjeev has earlier served as Director of Curriculum at e-GMAT. Chiranjeev has been helping students ace GMAT since 2012. He follows a concept-based methodology to teaching GMAT and is very committed to student success. You may contact him for any private GMAT tutoring needs at CJ@GMATwithCJ.com. He conducts online sessions for students across the world.

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