A few good takeaways from this question:
-we can always rewrite integers as their factors, so we can say 9 = 3^2
-we can multiply across inequalities freely (without flipping the sign) when we know the variables are positive
-if a smaller integer is LARGER than a bigger integer and they both have unknown exponents, then the exponent of the smaller integer is obviously “making up” for the difference in value and must be larger than the bigger integer’s exponent
The answer is (D).
The flaw with the question: The statements are incompatible. It cannot be that x = 0 and y = 2, and Statement (2) is true. Because if we plug in x = 0 and y = 2, then Statement (2) reads:
1/16 > 16/9
1/16 is not larger than 16/9
So, while there’s good takeaways here, the fact that the statements contradict one another do not make this a great GMAT question. It is not an official GMAT problem for this exact reason.
Here’s a little more scratchwork, if you’re curious!