Financial Expert: Our country has a very high debt-to-GDP ratio and it

Question

Financial Expert: Our country has a very high debt-to-GDP ratio and it’s difficult for a country with a high debt-to-GDP ratio to grow in a dynamic manner. Moreover, our debt is growing higher and that means inflation is getting worse. All in all, our country is badly managed these days.

Which of the following assertions is most strongly supported by the passage?

(A) High debt has an adverse impact on the inflation rate.

(B) It is not possible for a badly managed country to grow in a dynamic manner.

(C) High level of debt is extremely detrimental to the growth of a country.

(D) Growing inflation is a sign of a badly managed country.

(E) Whatever growth is happening in this particular country cannot possibly be called dynamic growth

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Rohit_842 · Answer

A is the correct answer. It is explicitly mentioned "our debt is growing higher and that means inflation is getting worse"

Toddlerandgmat · Answer

Hello,

Can you please provide OA?
Why option D is incorrect?

Rohit_842 · Answer

The argument mentions 'overall' our country is badly managed. And to conclude this it takes into consideration atleast 2 things 1. High debt to GDP ratio and 2.growing debt which causes growing inflation. Option D only covers the 2nd aspect, as it could be possible that a country has low debt to GDP ratio along with growing inflation so I doubt we could conclude that this hypothetical country could be called badly managed. Hence D fails

Bunuel · Answer

Official Explanation

Answer: A

Since this is an Inference question, let’s look at each option and eliminate.

(A) The argument clearly states that increasing debt is worsening the inflation rate, so then  A can definitely be inferred.

(B) Cannot necessarily be concluded. We don’t even know what all things constitute a badly managed country, so then we definitely cannot conclude this.

(C) We know that high level of debt to GDP ratio is detrimental for the growth of a country but from this we cannot necessarily conclude that high level of debt by itself is extremely detrimental. If the GDP is also high then high level of debt could be a good thing.

(D) This may not necessarily be true because the argument states that all the things together constitute a badly managed country, but what is true for the whole may not be true for each part.

(E) The argument states that it’s difficult for this country to grow in a dynamic manner and not that it is impossible for this country to do so.

ahddhah · Answer

I have a problem with option A since first line can show only correlation not causation and for option A to be inferred we need to know if high inflation is impacted by increasing debt

Financial Expert: Our country has a very high debt-to-GDP ratio and it

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Financial Expert: Our country has a very high debt-to-GDP ratio and it

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

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