Lana sube, lana baja

My friend is a film student at the University of Southern California.  His mother’s side of the family is Mexican, and his father’s side of the family is Serbian.

My friend heard this riddle from a cousin 6 years ago during a New Year’s celebration.  The riddle is usually delievered as:
“Lana sube, lana baja.  Que es?”

Which translates to:

“Wool rises, wool falls.  What is it?”

He says that this riddle is supposed to be  asked very quickly in order to confuse the listener.  My friend remembers that his cousin asked the riddle very quickly and he wasn’t sure what she was asking for.

The central catch to the riddle is the pun on “lana baja.”  “Lana baja” sounds similar to “la navaja,” which means “the blade” in Spanish.  Because the riddle is delivered so quickly, the riddle could possibly sound like “Lana sube, la navaja.”

The proper answer to “Lana sube, lana baja.  Que es?”  is “Lana baja,” because that is where the potential confusion lies.  My friend says that there is a level of expectation for the recipient to answer correctly if the recipient is fluent in Spanish.  When the he was unable to provide an answer for the riddle the first time, his cousin laughed at him.
The riddle itself doesn’t have any inherent meaning – it functions primarily as a catch riddle that plays on the language.  However, my friend said that this is a shortened version of another rhyme.  He speculates that this version of the riddle is popular among children because it’s easy to remember and is catchy.

I agree with my friend’s interpretation of this riddle.  However, I think this version is more popular with children because it’s easier to remember and has a pretty straightforward function and meaning.  The other version of this riddle that the informant told me is used by older people, and can also be understood as a proverb.  This is why I think the longer version is more popular among adults, and the shorter version presented above is popular with children.  I also think that it might be perceived as more proper to use the proverbial version if you’re older than the person who you’re giving the riddle to.
The other version can be found on a separate post here:

Lana sube, lana baja, el senor que la trabaja