Chief Economist: Usually, the release of economic data about higher-than-expected growth in the Gross
Domestic Product (GDP) results in an increase in stock prices
. However, this quarter, the release of data
about strong GDP growth is most likely to result in a decrease rather than an increase in stock prices. Robust GDP
growth will lead to higher interest rates, increasing the attractiveness of bonds and causing a shift
of capital from equity to debt securities
. In the above argument, the statements in boldface play which of
the following roles?
A) The first acknowledges a consideration against the main conclusion of the chief economist; the second is that
B) The first is a pattern of cause and effect that the chief economist predicts will not hold in the case at issue; the
second offers a consideration in support of that prediction.
C) The first is a generalization that the chief economist accepts as true; the second is a consequence that follows
from that generalization.
D) The first is evidence that the chief economist provides in support of a certain prediction; the second is that
E) The first is a pattern of cause and effect that the chief economist predicts will be repeated in the case at issue; the
second acknowledges a circumstance in which that pattern would not hold.
First sentence is an example of usual observed behaviour
Second sentence is the reason why this behaviour will not work
A) Correct. The second is definitely a conclusion, the first is defintely a consideration that the economist acknowledges will usually happen
B) Incorrect. First is correct, but second isn't quite right.
C)Incorrect. The second isn't a consequence from the generalisation, it is a conflicting view.
D)Incorrect. First and second sentences in the parapgraph are contradictory, D assumes they are complimentary
E)incorrect, first is a parrern of cause and effect but the economist DOES NOT predict is will be the case.
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