Question: Which of the following most logically completes the passage?

Concerned about the financial well-being of its elderly citizens, the government of Runagia decided two years ago to increase by 20 percent the government-provided pension paid to all Runagians over 65. Inflation in the intervening period has been negligible, and the increase has been duly received by all eligible Runagians. Nevertheless, many of them are no better off financially than they were before the increase, in large part because ________.

(A) They rely entirely on the government pension for their income
(B) Runagian banks are so inefficient that it can take up to three weeks to cash a pension check
(C) They buy goods whose prices tend to rise especially fast in times of inflation
(D) The pension was increased when the number of elderly Runagians below the poverty level reached an all-time high
(E) In Runagia children typically supplement the income of elderly parents, but only by enough to provide them with a comfortable living

Correct Answer: E
Explanation: In the beginning they received 10 dollars from the Government. Children gave them 5 dollars more to live comfortably. Then the Government gave them 2 dollars more. Children now gave them 3 dollars to live comfortably. At the end of the day they still had the same, and therefore were no better off than before. The pension is probably not enough to ensure a comfortable living. So the financial situation of the elderly stays the same.

Choice E explains the reason why even after getting the extra 20% the financial state of elderly people will still remain the same. If the elderly are already dependent on their children for a "comfortable living" i.e. a fixed amount comes from their children. This means that their children are paying for the balance of the pension they are currently receiving. Let's examine the other options.

Option A- Incorrect
From A we know that they rely entirely on the government pension but we have no information of the financial status to the people receiving the pension. Is the pension sufficient to provide a living? What percentage of the pension are the elderly saving? Are the elderly relying on external help? Choice A answers none of these answers. So, we do not have an idea about the financial condition of the elderly who receive the pension.

Option B- Incorrect
It can take up to "three weeks" to cash a pension check but the elderly would still receive their pension. So this choice merely states that most of the elderly receive their pension late. No link between the extra 20% and the financial status.

Option C- Incorrect
The stimulus says that the inflation in the given period was negligible so the fact that the elderly buy goods whose prices tend to rise fast in times of inflation becomes irrelevant.

Option D- Incorrect
When or under what circumstance the pension increase is irrelevant to the conclusion. This choice does nothing to provide us a reason for the financial status of the elderly over the age of 65.

“Concerned about financial well-being of its elderly citizens, the”- is a GMAT critical reasoning topic. This GMAT critical comes with five options and candidates need to choose the one which is correct. GMAT critical reasoning tests the logical and analytical skills of the candidates.

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