<p>Argument Evaluation Situation:- Two years of recession in Veltria included a downturn in the clothing trade where sales are down 7 percent from two years ago. Yet, in the second year of the recession, the proportion of credit extended from clothing wholesalers to retailers that was paid off on time has returned to its prerecession level, after having fallen sharply during the first year. Reasoning:- Which option would most help to explain the change between the first and second year in the proportion of credit paid off on time? The apparent discrepancy in the passage that needs explaining is between the downturn in the clothing trade over the last two years and the return to prerecession rates in the proportion of credit extended to clothing retailers that was paid on time. How can the proportion this past year be similar to what it would be in a normal year? After all, one would expect retailers to have a harder time paying off credit in a recession. And what changed in the past year to bring this about? If the first year of the recession drove out of business many of the retailers who were most apt to get behind in their payments to wholesalers, then that would explain how the rate at which credit was being paid on time could be as high in the second year of the recession as it was before the recession. A The fact that the absolute amount of credit that was extended to retailers went up in the second year does not help to explain why the proportion that was paid on time also went up. B If anything, this would suggest that more retailers would have trouble paying their credit to wholesalers on time. C Correct. This is the option that most helps to explain the phenomenon. D Just because retailers tried to stimulate sales does not mean that they succeeded, and the passage tells us that the downturn in sales in the clothing trade continued into the second year. E This does not change the fact that there was a downturn in sales of clothing during the first year. Furthermore, the question is why the rate of unpaid credit dropped in the second year of the recession. The correct answer is C.</p>
