The recent decline in the employment rate was spurred by predictions

The recent decline in the employment rate was spurred by predictions of slow economic growth in the coming year. However, those predictions would not have affected the employment rate if it had not been for the lack of capital reserves of major industries. So if major industries increase their capital reserves, the employment rate will not decline in the future.


Which of the following, if true, casts the most doubt on the validity of the argument above?


C)An increase in labor costs could adversely affect the employment rate.

This clearly mentiones that just increasing capital reserves will not stop the employement rate. There are other factors/variables that can affect the employement rate.

Hi souvik101990,

Can you please share OE...??


chetan2u,

Although I choose the correct answer, but I am not convinced.
I opted C because other options ( A, D and E) are completely irrelevant.

Now left with B and C.

Conclusion- if major industries increase their capital reserves, the employment rate will not decline in the future
As we have to weaken the argument, so we need to find an option which says
Increasing capital reserve not going improve employment rate.

B. Some major industries had appreciable capital reserves.
The word "SOME" makes me cautious. Therefore eliminated.

C. An increase in labor costs could adversely affect the employment rate.

I opted it bcz nothing left.
What is the link between LABOR COSTS and CASH RESERVES....?

Does it mean if labor cost increases then we have to take amount from cash reserve and hence employment rate not going to improve..?
Am I rite..?

Please assist.

Hi,

here, we have to doubt the argument, and just not the conclusion..

the argument is..
decline in employment rate was spurred by predictions of slow growth. However,predictions would not have affected if major ind had capital reserves...
and conclusion is
if the major industries increase their cash reserves, there will be no decline in employment rate..

You have eliminated B for correct reasons ..

the reasoning for C to be correct is:-
C. An increase in labor costs could adversely affect the employment rate...

C is giving reasons other than sufficient reserves that can result in decrease of employment rate.
So even if the industries had sufficient reserves, an increase in labour costs can lead to decrease in employment rate..

Hi chetan2u,

I got your reasoning, but one more thing to ask..

Up to my understanding if GMAT question says-->Increasing A leads to increase B ) And now we need to weaken this conclusion
That means we need to show Increasing A DOES NOT leads to increase B
Now, if we come across an option which says Increasing C DOES NOT leads to increase B ( This option can't WEAKEN until C and A are interlinked )

In argument

The conclusion says-->
Increase in Cash reserves leads to improve employment rate or decrease Unemployment.
Now if any option gives any kind of connection between Labor cost and Employment Rate--> WE DON'T CARE
Bcz we just need to prove Improving Cash reserves does not improve employment rate.

We will only consider any option if it is going to make impact on Cash reserve and in turn impact on employment rate.

CORRECT ME IF I AM WRONG

I think this is not a 700Q. Anyways let's get to basics.

Major industries increase the capital reserve -> no decline in the unemployment rate.
To weaken the conclusion, You must see this as a causal passage. increasing capital reserve as the cause and decline in the unemployment as the effect.
If A causes B, to weaken the conclusion One can show B causes A or C causes B.

Anyways...
D. The government could pass legislation mandating that major industries set aside a fixed amount as capital reserves every year.

Tell me honestly would it weaken the conclusion, if the government mandates major industries to set aside a fixed amount. Then the employment rate might decline due to other factors or might not decline because of the available money..

E. The drop in the employment rate was more severe this year than last.

Drop in the employment rate in this year was more, so What? I should increase more reserve? Note that the increase in the reserve has not yet taken place. If it had taken place and the drop in the employment rate was more severe then it would be a weakener.. so as of now it is not.

A. Major industry foresaw the drop in employment.

Okay if they did why did not they increase the capital reserve? How is this related to capital reserve increase?

B. Some major industries had appreciable capital reserves.
Yes it did.. Why did then the employment rate decline.. because only some major industries only had capital reserves? .. so if all had there would be no shortage of employment.. isn't this strengthening..


C. An increase in labor costs could adversely affect the employment rate.

If an increase in labor cost affected the employment rate... then capital reserves had no-effect (PROBABLY); so this is the best weakener.

VeritasKarishma AjiteshArun chetan2u
In Option B if we had most instead of some will it be a correct option then ?

Maybe, as then B would do a much better job of weakening the support. However, I don't think the GMAT would put you in a position where you'd have to choose between C and the "new version" of B.

ChiranjeevSingh

Sir i went through your document on Alternate Cause and learnt the following:

1. “X leads/can lead/will lead to Y” allows the possibility of an alternate route, Z, to reach the
effect, Y. Therefore, an option statement presenting an alternate route does not weaken this
conclusion type.
2. “X led to Y” is presenting a reason (X) for a specific occurrence in the past (Y). An option
statement suggesting an alternate cause, Z, led to Y, creates doubts on the conclusion and thus,
weakens the argument.

Applying the same in this question:

Argument : ↑ Capital Reserves ------> Employment Rate WILL NOT decline (Futuristic)

Since the above argument is of the class 'WILL LEAD TO" , An alternate route doesn't weaken the conclusion type.
(the word 'ONLY' is also not explicitly stated)

Then why is option C " An increase in labor costs could adversely affect the employment rate." which is an alternate route weakens the argument ?

Kindly help me with this concern?

Hi Sahil,

Option C is not presenting an alternate cause. The conclusion here is: "If you do X, Y will not happen". An alternate cause will give you another way to make Y NOT happen. Right?

However, option C gives us a way to make Y HAPPEN. Essentially, option C gives us a reason to believe that even if we do X, Y will still happen. Thus, it weakens the argument.

The argument is that the employment rate will not drop if major industries increase their capital reserves.
This is supported by the fact the recent decline in employment rate was spurred by predictions of slow economic growth.
It is stated that these predictions wouldn't have been made if not for a lack of capital reserves
So the author assumes that having capital reserves is sufficient to preventing a drop in the employment rate.

We are asked to weaken the argument

A is incorrect because it solidifies the cause-effect relationship.

B is tempting as it points out "some" had appreciable reserves. But "some" could be 2-3 out of 100 industries, so this wouldn't really negate the cause-effect relationship.

C is correct because it points out an alternate cause for the stated effect.

D is incorrect because it points out a hypothetical situation not conducive to the present.

E is incorrect because the argument is actually concerned with the current prediction, not prior predictions.

Understanding the argument - The argument conveys that, ultimately the lack of reserves is the major culprit here. So, if major industries increase their major reserves, the employment rate will not decline.
How do we weaken this? What if there are factors other than reserves that cause the employment rate to decline even when we keep the reserves higher?

A. Major industry foresaw the drop in employment. - Distortion

B. Some major industries had appreciable capital reserves. - "Some" is a problem here. Some can be at least two. Ok, take two scenarios
1. 2% of the industries had appreciable capital reserves. That mean 98% don't have appreciable reserves? So the above, "if-then" (mean the conclusion), remains valid. At best it strengthens the if then.
2. 98% of the industries had appreciable capital reserves. So if they already had the appreciable capital reserves, then how come the if then helps? Yes, it weakens somewhat.

C. An increase in labor costs could adversely affect the employment rate. Perfect. So even if we increase the capital reserves, the employment rate still declines. Weakens the conclusion.

D. The government could pass legislation mandating that major industries set aside a fixed amount as capital reserves every year. - out of scope

E. The drop in the employment rate was more severe this year than last. - Out of scope.