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If a country s manufacturing capacity is fully utilized,

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If a country s manufacturing capacity is fully utilized, [#permalink]

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New post 27 Jan 2013, 14:08
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If a country’s manufacturing capacity is fully utilized, there can be no industrial growth without new capital investment. Any reduction in interest rates produces new capital investment.

Which one of the following can be properly concluded from the statements above?

(A) Interest rates might in exceptional cases be reduced without there being any subsequent investment of new capital.
(B) A reduction in interest rates might cause a precondition for industrial growth to be met.
(C) If a country’s manufacturing capacity is underutilized, interest rates should be held constant.
(D) New capital investment that takes place while interest rates are rising cannot lead to industrial growth.
(E) Manufacturing capacity newly created by capital investment needs to be fully utilized if it is to lead to industrial growth.
[Reveal] Spoiler: OA

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Re: If a country’s manufacturing capacity is fully utilized [#permalink]

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New post 27 Jan 2013, 14:53
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Legendaddy wrote:
If a country’s manufacturing capacity is fully utilized, there can be no industrial growth without new capital investment. Any reduction in interest rates produces new capital investment.

Which one of the following can be properly concluded from the statements above?

(A) Interest rates might in exceptional cases be reduced without there being any subsequent investment of new capital.
(B) A reduction in interest rates might cause a precondition for industrial growth to be met.
(C) If a country’s manufacturing capacity is underutilized, interest rates should be held constant.
(D) New capital investment that takes place while interest rates are rising cannot lead to industrial growth.
(E) Manufacturing capacity newly created by capital investment needs to be fully utilized if it is to lead to industrial growth.



A tricky one especially because whenever we see a short stem and pretty straigthforward almost the time we have to infer even more

we have no industrial growth without capital and the interest rates are necessary for the capitals. In turns out, this lead to the fact that the pivotal point are the interest rates. So is essential these that conduct to the growth. So a precondition without which we can do nothing

B must be the answer
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Re: If a country’s manufacturing capacity is fully utilized [#permalink]

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New post 27 Jan 2013, 15:46
The major key is to recognize that the first statement is a statement of necessity: “there can be no growth without investment” means that if capacity is full, growth needs, or requires, investment. That is, under full capacity, investment is necessary to bring about growth, although there may be other factors that are needed as well. Now we can integrate the second sentence: Reducing interest rates produces investment, the very thing we just saw is necessary for growth. Bottom line: Reducing rates won’t guarantee growth, but it will lead to one necessary factor for growth—investment. In other words, as answer choice (B) has it, a reduction in rates allows for a condition necessary for growth to come about.
(A) contradicts the stimulus. Any reduction in interest rates produces new capital investment—no exceptions.
(C) is an out-of-place policy recommendation. The argument never discusses what should be done with interest rates or anything else.
(D) There are no restrictions on the source of new capital investment. The stimulus deals only with falling rates; since we’re told nothing of rising rates, it’s totally possible that new capital investment that takes place while interest rates are rising could lead to industrial growth.
(E) This answer choice scrambles the terms of the argument. The argument never mentions “manufacturing capacity newly created” and there is no requirement that it be “fully utilized.”
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Re: If a country s manufacturing capacity is fully utilized, [#permalink]

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New post 22 Jun 2013, 18:00
Legendaddy wrote:
If a country’s manufacturing capacity is fully utilized, there can be no industrial growth without new capital investment. Any reduction in interest rates produces new capital investment.

Which one of the following can be properly concluded from the statements above?


(A) Interest rates might in exceptional cases be reduced without there being any subsequent investment of new capital.// it is saying that their might be an exception to the argument. out
(B) A reduction in interest rates might cause a precondition for industrial growth to be met.// Re-stating the stimulus// correct answer
(C) If a country’s manufacturing capacity is underutilized, interest rates should be held constant.// under-utilized ? we don't know anything about that!
(D) New capital investment that takes place while interest rates are rising cannot lead to industrial growth.// We don't know.
(E) Manufacturing capacity newly created by capital investment needs to be fully utilized if it is to lead to industrial growth.// Again nothing can be sure//
D and E Might be true but we can't might be true answers.

tricky one. i will pick B.
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Re: If a country s manufacturing capacity is fully utilized, [#permalink]

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New post 31 May 2015, 08:09
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Re: If a country s manufacturing capacity is fully utilized, [#permalink]

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New post 31 May 2015, 08:20
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industrial growth = new capital investment = reduction in interest rates
Thus industrial growth = reduction in interest rates
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Re: If a country s manufacturing capacity is fully utilized, [#permalink]

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New post 03 Jun 2016, 05:37
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

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Re: If a country s manufacturing capacity is fully utilized,   [#permalink] 03 Jun 2016, 05:37
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