LSAT-11-1-14

conquergmat

14. Once consumers recognize that a period of inflation has begun, there is generally an increase in consumer spending. This increase can be readily explained by consumers’ desire not to postpone purchases that will surely increase in price. But during protracted periods of inflation, consumers eventually begin to put off making even routine purchases, despite the fact that consumers continue to expect price to rise and despite the fact that salaries also rise during inflationary periods.

                

Which one of the following, if true, most of helps to explain the apparent inconsistency in consumer behavior described above?

                

(A) During times of inflation consumers save more money than they do in noninflationary periods.

                

(B) There is usually a lag between the leading economic indicators first signaling the onset of an inflationary period and consumers’ recognition of its onset.

                

(C) No generalization that describes human behavior will be true of every type of human behavior.

                

(D) If significant numbers of consumers are unable to make purchases, prices will eventually fall but salaries will not be directly affected.

                

(E) Consumers’ purchasing power decreases during periods of protracted inflation since salaries do not keep pace with prices.

Why choose E, i choose D