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The recent decline in the value of the dollar was triggered

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The recent decline in the value of the dollar was triggered [#permalink] New post 29 Sep 2003, 02:49
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13. The recent decline in the value of the dollar was triggered by a prediction of slower economic growth in the coming year. But that prediction would not have adversely affected the dollar had it not been for the government’s huge budget deficit, which must therefore be decreased to prevent future currency declines.
Which of the following, if true, would most seriously weaken the conclusion about how to prevent future currency declines?
(A) The government has made little attempt to reduce the budget deficit.
(B) The budget deficit has not caused a slowdown in economic growth.
(C) The value of the dollar declined several times in the year prior to the recent prediction of slower economic growth.
(D) Before there was a large budget deficit, predictions of slower economic growth frequently caused declines in the dollar’s value.
(E) When there is a large budget deficit, other events in addition to predictions of slower economic growth sometimes trigger declines in currency value.
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 [#permalink] New post 29 Sep 2003, 06:20
D

Authors cites Economic prediction and budget deficit as the main causes of $ decline, budget deficit is being the main cause. D undermines this assumption
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Re: The recent decline in the value of the dollar was triggered [#permalink] New post 28 Dec 2011, 18:07
(B) The budget deficit has not caused a slowdown in economic growth.

If the budget deficit didnt cause the slowdown, then there is no point in decreasing the budget deficit for preventing future currency declines. Hence, the conclusion is weakened..isn't it?

Please correct me if I'm wrong.
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Re: The recent decline in the value of the dollar was triggered [#permalink] New post 29 Dec 2011, 06:31
One can use the question stem as a clue to the conclusion.
Conclusion: Decline of currency could have been prevented if there was no large budget deficit

D

A) Irrelevant.  
B) Wrong relationship.  The issue with the currency decline is not tackled.
C) This could be true BUT this doesn't undermine the fact that having no huge government deficit could have prevented it.
D) BINGO!  This sites a time when there was a currency decline even without a large budget deficit.  This kills the prevention argument of the author.
E) This strengthens by saying that decline follows after deficit but just adds more factors to it.
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Re: The recent decline in the value of the dollar was triggered [#permalink] New post 29 Dec 2011, 07:14
I'm still trying to analyze option B.

What if B was
(B) The budget deficit has caused a slowdown in economic growth.

Will it be still a contender to weaken the conclusion about how to prevent future currency declines?
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Re: The recent decline in the value of the dollar was triggered [#permalink] New post 29 Dec 2011, 20:38
Vicky wrote:
13. The recent decline in the value of the dollar was triggered by a prediction of slower economic growth in the coming year. But that prediction would not have adversely affected the dollar had it not been for the government’s huge budget deficit, which must therefore be decreased to prevent future currency declines.
Which of the following, if true, would most seriously weaken the conclusion about how to prevent future currency declines?
(A) The government has made little attempt to reduce the budget deficit.
(B) The budget deficit has not caused a slowdown in economic growth.
(C) The value of the dollar declined several times in the year prior to the recent prediction of slower economic growth.
(D) Before there was a large budget deficit, predictions of slower economic growth frequently caused declines in the dollar’s value.
(E) When there is a large budget deficit, other events in addition to predictions of slower economic growth sometimes trigger declines in currency value.


There are several things that can weaken a conclusion. One of them can be an attack on an assumption or premise.
The premise here is that predictions of X causes decline in value of currency. But, not always.
This time govt has huge budget deficit. Budget deficit led to currency value decline.
Conclusion: Fix the deficit, currency value will not decline

There is no necessary assumption that budget deficit itself caused the prediction of slower economic growth. They are stated as independent events. "But that prediction would not have.." says that such prediction may exist without budget deficit and would not alone cause the currency value decline.

A - Govt has made little attempt. Ok really bad. But, that does not affect our conclusion. The conclusion is not whether in the future dollar value would actually stop declining, just that reducing budget deficit would prevent currency value decline.

B - Budget deficit didn't cause the economic slowdown. Two issues. One, the argument talks about prediction of slowdown. Two, this supports the premise that slowdowns exist without budget deficit. And as per the argument such slowdowns would not cause a decline in dollar value. Kind of supports the argument.

C - Cool. So, dollar value has been declining. Do we know if budget deficit was there in prior years? Most likely, then may be not. Possibly weakening. Lets keep this for later.

D - Oh oh. So, this directly attacks our premise. Our premise says that predictions of future normally doesn't cause decline in dollar value. But, then again, its possible that there was large budget deficit during those times as well. So, lets keep this one.

E - But, there definitely is a budget deficit in this answer choice, even if other forces are causing decline in dollar value. So, out.

Between C and D. If you look closely at C, in the best case, C might strengthen the conclusion. If we assume that there could only be two triggers of dollar value decline, predictions and deficits. C states that "prior to recent prediction", that means perhaps prediction wasn't there in prior years and only deficit.

Another way to finally get to the answer when we are stuck between two is to negate the answer choices, and see what that does to the argument.
If we negate D, it would say - Before there was budget deficit, predictions of economic slowdown (almost) never caused value of dollar to decline. Strengthens the argument.

I think we have found the right answer to be D. :)
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Re: The recent decline in the value of the dollar was triggered [#permalink] New post 30 Dec 2011, 06:05
Answer is D.
Re: The recent decline in the value of the dollar was triggered   [#permalink] 30 Dec 2011, 06:05
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