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21 Feb 2024, 03:17
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Difficulty:
95%
(hard)
Question Stats:
34% (02:21) correct
66%
(02:32)
wrong
based on 1071
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Economist: Although prices of most precious metals have greatly increased in nominal terms (i.e., before adjustment for inflation) over the past century, the inflation-adjusted prices have actually been falling. Since the price of a commodity generally decreases when supply grows relative to demand, and since demand for precious metals has been growing, the supply of these metals on the market must be currently growing.
Which of the following, if true, would most weaken the economist's argument?
A. Mining precious metals to put them on the market continuously lowers reserves in the earth.
B. Over the past century, the prices of some metals have risen dramatically after adjustment for inflation.
C. The prices of commodities, including precious metals, predictably increase when demand grows relative to supply.
D. Over the past decade, the prices of most precious metals have risen after adjustment for inflation.
E. Over the past century, inflation has made the prices of precious metals much higher in nominal terms than they would otherwise have been.
GMAT-Club-Forum-3q1etk6h.png [ 97.95 KiB | Viewed 3649 times ]
Which of the following, if true, would most weaken the economist's argument?
A. Mining precious metals to put them on the market continuously lowers reserves in the earth.
B. Over the past century, the prices of some metals have risen dramatically after adjustment for inflation.
C. The prices of commodities, including precious metals, predictably increase when demand grows relative to supply.
D. Over the past decade, the prices of most precious metals have risen after adjustment for inflation.
E. Over the past century, inflation has made the prices of precious metals much higher in nominal terms than they would otherwise have been.
Attachment:
GMAT-Club-Forum-3q1etk6h.png [ 97.95 KiB | Viewed 3649 times ]
21 Feb 2024, 08:28
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Economist: Although prices of most precious metals have greatly increased in nominal terms (i.e., before adjustment for inflation) over the past century, the inflation-adjusted prices have actually been falling. Since the price of a commodity generally decreases when supply grows relative to demand, and since demand for precious metals has been growing, the supply of these metals on the market must be currently growing.
The economist has concluded the following:
the supply of these (precious) metals on the market must be currently growing
The support for the conclusion is the following:
over the past century, the inflation-adjusted prices (of precious metals) have actually been falling
the price of a commodity generally decreases when supply grows relative to demand
demand for precious metals has been growing
We see that the economist has reasoned that, since prices are decreasing and demand is increasing, supply must be increasing.
One thing that we might notice in reading the passage (although we don't have to notice it on the first read to get this question correct) is the following important difference betweent the evidence and the conclusion: The evidence involves prices falling "over the past century" whereas the conclusion is that supply must be growing "currently."
Which of the following, if true, would most weaken the economist's argument?
The correct answer will weaken the support the evidence provides for the conclusion.
A) Mining precious metals to put them on the market continuously lowers reserves in the earth.
This choice may seem to explain why supply of precious metals would not be increasing. It could be that supply is not increasing because reserves of precious metals are decreasing because of continuous mining.
At the same time, we don't need an explanation for why supply is decreasing rather than, as the conclusion says, increasing. We need a reason to believe that supply is not actually increasing.
This general fact about reserves doesn't mean that supply is not increasing. Rather, the fact that prices have decreased while demand has increased still appears to support the conclusion that supply is growing, even if reserves may be decreasing.
Eliminate.
B) Over the past century, the prices of some metals have risen dramatically after adjustment for inflation.
This choice tempts us by appearing to change the scenario. We might think it indicates that precious metals prices have actually increased rather than decreased and thus that supply is not increasing.
However, this choice doesn't actually change what we know. After all, the evidence is about "most precious metals." The fact stated by this choice, that the prices of "some metals" have increased doesn't change the fact that the prices of "most precious metals" have decreased.
Eliminate.
C) The prices of commodities, including precious metals, predictably increase when demand grows relative to supply.
This choice strengthens, rather than weakens, the argument. Here's how.
The passage says that demand for precious metals is growing.
Now, this choice says that prices increase when demands grows relative to supply.
However, the passage says that prices are not increasing. So, demand must not be growing relative to supply.
In that case, if demand is growing, supply must be growing as well.
So, the information provided by this choice confirms the conclusion of the argument that supply is growing.
Eliminate.
D) Over the past decade, the prices of most precious metals have risen after adjustment for inflation.
We might think this choice can't be correct since it seems to conflict with a premise of the argument. After all, the passage says the following:
the inflation-adjusted prices (of most precious metals) have actually been falling
So, what this choice says about prices rising could seem to be the opposite of what the passage says.
However, if we haven't noticed a key diference between what the passage says and what this choice says, we can see that difference by going back to the passage and rereading. Doing so, we see that, actually, what the passage says is the following:
over the past century, the inflation-adjusted prices (of precious metals) have actually been falling
We see that the statement in the passage and this choice are about different time periods. The statement in the passage is about "the past century" whereas this choice is about "the past decade."
Having seen that difference, we can also note that the conclusion is that supply must be growing "currently."
So, now, we see a weakness in the argument and how this choice weakens the argument.
The evidence is about the past century, whereas the conclusion is about what's occurring "currently." So, information provided by this choice, that prices have risen "over the past decade," shows that the evidence about the past century doesn't support the conclusion about what's going on "currently."
This choice tells us that what occurred "over the past century" does not support the conclusion about supply growing "currently" because what's has occurred "over the past decade" is different. Over the past decade prices did increase, so supply may not be growing currently.
Keep
E) Over the past century, inflation has made the prices of precious metals much higher in nominal terms than they would otherwise have been.
This choice does not materially change what we know. It just qualifies it.
We already know from the passage that "prices of most precious metals have greatly increased in nominal terms." Now this choice tells us that the prices have increased a lot in nominal terms.
All the same, that information doesn't mean that prices have increased in real terms. So, the scenerio remains the same: prices have decreased in real terms, a fact that supports the conclusion that supply has increased.
Eliminate.
Correct answer: D
The economist has concluded the following:
the supply of these (precious) metals on the market must be currently growing
The support for the conclusion is the following:
over the past century, the inflation-adjusted prices (of precious metals) have actually been falling
the price of a commodity generally decreases when supply grows relative to demand
demand for precious metals has been growing
We see that the economist has reasoned that, since prices are decreasing and demand is increasing, supply must be increasing.
One thing that we might notice in reading the passage (although we don't have to notice it on the first read to get this question correct) is the following important difference betweent the evidence and the conclusion: The evidence involves prices falling "over the past century" whereas the conclusion is that supply must be growing "currently."
Which of the following, if true, would most weaken the economist's argument?
The correct answer will weaken the support the evidence provides for the conclusion.
A) Mining precious metals to put them on the market continuously lowers reserves in the earth.
This choice may seem to explain why supply of precious metals would not be increasing. It could be that supply is not increasing because reserves of precious metals are decreasing because of continuous mining.
At the same time, we don't need an explanation for why supply is decreasing rather than, as the conclusion says, increasing. We need a reason to believe that supply is not actually increasing.
This general fact about reserves doesn't mean that supply is not increasing. Rather, the fact that prices have decreased while demand has increased still appears to support the conclusion that supply is growing, even if reserves may be decreasing.
Eliminate.
B) Over the past century, the prices of some metals have risen dramatically after adjustment for inflation.
This choice tempts us by appearing to change the scenario. We might think it indicates that precious metals prices have actually increased rather than decreased and thus that supply is not increasing.
However, this choice doesn't actually change what we know. After all, the evidence is about "most precious metals." The fact stated by this choice, that the prices of "some metals" have increased doesn't change the fact that the prices of "most precious metals" have decreased.
Eliminate.
C) The prices of commodities, including precious metals, predictably increase when demand grows relative to supply.
This choice strengthens, rather than weakens, the argument. Here's how.
The passage says that demand for precious metals is growing.
Now, this choice says that prices increase when demands grows relative to supply.
However, the passage says that prices are not increasing. So, demand must not be growing relative to supply.
In that case, if demand is growing, supply must be growing as well.
So, the information provided by this choice confirms the conclusion of the argument that supply is growing.
Eliminate.
D) Over the past decade, the prices of most precious metals have risen after adjustment for inflation.
We might think this choice can't be correct since it seems to conflict with a premise of the argument. After all, the passage says the following:
the inflation-adjusted prices (of most precious metals) have actually been falling
So, what this choice says about prices rising could seem to be the opposite of what the passage says.
However, if we haven't noticed a key diference between what the passage says and what this choice says, we can see that difference by going back to the passage and rereading. Doing so, we see that, actually, what the passage says is the following:
over the past century, the inflation-adjusted prices (of precious metals) have actually been falling
We see that the statement in the passage and this choice are about different time periods. The statement in the passage is about "the past century" whereas this choice is about "the past decade."
Having seen that difference, we can also note that the conclusion is that supply must be growing "currently."
So, now, we see a weakness in the argument and how this choice weakens the argument.
The evidence is about the past century, whereas the conclusion is about what's occurring "currently." So, information provided by this choice, that prices have risen "over the past decade," shows that the evidence about the past century doesn't support the conclusion about what's going on "currently."
This choice tells us that what occurred "over the past century" does not support the conclusion about supply growing "currently" because what's has occurred "over the past decade" is different. Over the past decade prices did increase, so supply may not be growing currently.
Keep
E) Over the past century, inflation has made the prices of precious metals much higher in nominal terms than they would otherwise have been.
This choice does not materially change what we know. It just qualifies it.
We already know from the passage that "prices of most precious metals have greatly increased in nominal terms." Now this choice tells us that the prices have increased a lot in nominal terms.
All the same, that information doesn't mean that prices have increased in real terms. So, the scenerio remains the same: prices have decreased in real terms, a fact that supports the conclusion that supply has increased.
Eliminate.
Correct answer: D
General Discussion
