Hi,

Here comes the detailed solution:

Doubt of Economists:

The economists doubt that even if manufacturing companies like Jaguar can help increase UK exports, they cannot be a major source of new jobs over the long term

Note the following two things in the conclusion:
1. It is about manufacturing companies. Jaguar is merely used as an example.
2. There is strong usage of word “cannot”.

We need to provide information that in the given context will strengthen the economist’s claim.

Given Context:
• Car industry, which was stagnant for the last two years, is showing signs of revival.
• This revival can help UK economy by increasing manufacturing output and exports.
• It can also create high quality jobs.

Prethinking:

How could manufacturing companies not produce many jobs for UK, even with increasing exports and thus correspondingly increasing manufacturing activity?
1. Prethinking Assumption 1: Manufacturing companies will outsource some of their jobs to other countries.
2. Prethinking Assumption 2: Manufacturing companies will become more efficient in usage of workforce so that an increase in production may not translate into increase in employment.

Analysis of Answer choices:

A. The car industry does not create low-quality jobs. – We are concerned about the number of jobs, not quality of jobs. If car industry creates large number of high quality jobs, the economists doubt won’t be supported. Thus, incorrect.

B. Even though Jaguar’s exports grew more than 20% in the last year, its number of employees grew only by 5%. – This choice talks only about Jaguar, while economists’ doubt pertains to the entire manufacturing sector. Even if we say that their doubt could be based on data from single company, a 5% growth in employment is probably not a small growth. This still indicates that as exports will grow, so will employment. Thus, this option is also inconsistent with the conclusion.

C. The car industry is a capital intensive industry and frequently goes through cycles of growth and recession. – This does not even talk about jobs. Thus, incorrect.

D. To succeed in the global manufacturing industry, a company has to be extraordinarily efficient, which means using the same workforce for more production. – Correct. This is right on track. This choice implies that to succeed in the global market (exports), a company needs to produce more using the same workforce. Therefore, even if exports increase, this increase may not lead to a corresponding increase in jobs. Thus, this statement supports the economists’ doubt.

E. US car companies are financially well off than their British peers and can cut down their prices to gain market share. – Like option C, this also doesn’t talk about jobs. Thus, incorrect.

Hope this helps

Thanks,
Chiranjeev
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Here is my reasoning:

Looking for reason why Jaguar would not be a source of jobs in the long term.

A - Does not create doubt for the economists, but quality of jobs is irrelevant
B - Directly relates to sentence about Jaguar increasing exports, but not increasing as many jobs.
C - slightly irrelevant, but not sure. B is a safer choice.
D - Generalizes too much about global industry, requires too many assumptions.
E - Again, brings in too much outside information.

My answer: B.

My logic in this problem was to find an answer that did not require more assumptions than needed. Is this correct?

The renaissance in Britain's car industry has been a beacon of hope in an economy that has been broadly flat for the best part of two years. It can help rebalance the UK economy by increasing our manufacturing output and our exports. It can also create high quality jobs. But we shouldn't be under too many illusions: even if manufacturing companies like Jaguar can help increase UK exports, many economists doubt they can be a major source of new jobs over the long term.

Which of the following best explains the reason for the doubt expressed by the economists?

A. The car industry does not create low-quality jobs. So does it create moderate to high quality jobs? This should eliminate the doubts. Incorrect
B. Even though Jaguar’s exports grew more than 20% in the last year, its number of employees grew only by 5%.We care about manufacturing companies in general, not Jaguar alone. Pretty irrelevant. Jaguar might be an exception.Incorrect
C. The car industry is a capital intensive industry and frequently goes through cycles of growth and recession.We dont know that for every growth there will be new jobs and for every recession there will be jobcuts. The statement does not talk about jobs which is our main point of the doubt. Irrelevant and incorrect.
D. To succeed in the global manufacturing industry, a company has to be extraordinarily efficient, which means using the same workforce for more production.Bingo! The companies might not create job in the first place. Even if they did, they will just fill the void until they have enough to grow a sustainable manufacturing efficiency. This explains the possibility that the job market will get stagnant in the long term. Correct.
E. US car companies are financially well off than their British peers and can cut down their prices to gain market share.US? Who cares? Incorrect.
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Conclusion :- Not many jobs will be created in the long run

Assumption :- some factor that does not hinder the creation of jobs in the short run, but might hamper in the long run

IMO :- D

A. The car industry does not create low-quality jobs - OFS, if it creates high quality jobs then also the no of jobs will increase
B. Even though Jaguar’s exports grew more than 20% in the last year, its number of employees grew only by 5%. - OFS, atleast the employees grew so in the long run as well the new jobs although less in no will be created
C. The car industry is a capital intensive industry and frequently goes through cycles of growth and recession. - OFS
D. To succeed in the global manufacturing industry, a company has to be extraordinarily efficient, which means using the same workforce for more production. - Correct, if same workforce is used, then the company will hire in the short run to create the work force but will use the same work force in the long run and not create new jobs
E. US car companies are financially well off than their British peers and can cut down their prices to gain market share. - OFS, what market share, it can be only related to domestic markets, the UK CM can still export to other countries.

Excellent question

i think the answer is D.

Conclusion: Jaguar will help economy without creating any further jobs( No more new jobs reqd) to improve the economy.
They are able to do with the older workforce, the newer workforce even if hired will not make any significant contribution to the economy and hence to the JAguar's production of cars.

B is an excellent trap for those reading fast and guessing blindly
Hope that helps


Consider kudos, If my post helped!!!!!!!!!!!!!

Hi,

Appreciate the effort you put in.

The reason option B is incorrect is that it only talks about Jaguar and even if we discount this, the option talks about a 5% growth in employment - opposite of the doubt expressed by the economists.

Please refer to the detailed solution posted above.

Thanks
Chiranjeev
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