Application questions are a very specific type of Inference question. They ask us to go one step further; we must apply what we have read in the passage to a new or hypothetical situation. For these tougher Inference questions, it’s important to ignore the answer choices until you’ve effectively broken down and made sense of the relevant parts of the passage.
Understand the described process. Usually Application questions require you to mimic an described process in the passage. Pay attention to how a particular process is performed. For example, if the passage focuses on describing how a scientist conducted a research study, you must clarify step-by-step how the study was carried out, before you can apply that same method to a different or new situation. Go back through the passage and list the verbs on your scratch pad. This will help you to understand the steps of the process and not confuse the sequence.
Which of the following is most similar to the shift in the financial situation of the average middle-class family from the 1980s to today, as outlined in the passage?
(A) A company has a 60% decrease in profits over a year, due to higher staffing costs.
(B) A company has a 60% decrease in profits over a year, but compensates for the losses by moving to a less-expensive office space.
(C) A company has a 40% increase in net income from sales over one year, but in the same period has a 90% increase in rent on its office space, leaving it with a lower profit than in the previous year.
(D) A company has a 60% increase in profits over one year, and chooses to reinvest that additional money by purchasing the office space it had previously rented.
(E) A company’s profits remain roughly the same from one year to the next.
We know this is an application question because of the phrase “most similar.” Before we can make sense of the answer choices, we must go back to the verbs that describe the original proces. Scanning back, we pull out a few key sentences that discuss a “financial shift”:
- “…two wage earners means that their household income is about 75% higher than it would have been in the 1980s, but this is largely the result of the wife working outside the home, which also necessitates expenditures, like day care and a second car,..”
- “Middle class financial anxiety isn’t the product of too many lattes and designer shoes; it is the result of increased costs for the cornerstones of modern life.”:
Verbs: “rise in income”, “necessitates expenditures” “increased costs”
We must look for the answer choice that shows an increase in income but also an increase in expenses and costs, ultimately leading to financial anxiety.
The correct answer is (C).
Always remember to use the passage like an open-book test. The GMAT is testing your critical reading skills, not your memory!
Vivian Kerr is a regular contributor to the Veritas Prep blog, providing tips and tricks to help students better prepare for the GMAT and the SAT.