It often happen that, as a recession deepens, the stock

Hi nt2010

I think I can help you a bit.

Fact: As a recession deepens, the stock market soars.
Fact: Later after the economy has become stronger, the market often appears to become shaky.
The main conclusion is: The market is a poor indicator of economic trends.

Assumption is: Stock prices reflect the current state of the economy. It means what stock prices demonstrate what the economy experiences.

You can weaken the argument by showing that the stock prices move faster than the current state of the economy. For instance, as you know the economy NEVER goes up or down FOREVER. There are always peak and trough. After the economy hits the trough, it will go back. The pattern is the same, after the economy hits its peak, it will go down. That's the logic.

How about A?
You say: A states the same. You're not correct. The complete sentence is: "Stock prices do not...., but rather the expert judgement.......".
A says: "Stock prices do not reflect the current state of the economy, but rather the expert judgement of investors about the future strength of the economy".

Clearly, A attacks the conclusion by showing that the market always moves faster than the current economy. Hence A is correct.

How about E? "some brokers and analysts believe that the stock market is a useful index of economic trends because it is updated more frequently than other indicators"

You see E says "Just some brokers and Analysts believe that stock market is good indicators" ==> It also means other people don't believe, otherwise E should state "Every body believes that....". Thus, E does not weaken the conclusion.

Hope it clears you doubt.

Regards.

I chose A as it "best" countered the argument.
B - This one mentions the opinion of Brokers/analysts which may/may not be true. So not strong enough
C - It gives a historical evidence which may not recur always and in all situations.
D - This actually supports the argument.
E - No relation between updation of the indicators and accuracy of their implications!

conclusion --- market is poor indicator of economic trends

A states that "stock prices reflect the future strength of the economy" that means market is a future indicator of economic trends - This contradicts conclusion. --- So A is the answer

Not sure how A counters the argument - that stock market is a poor trend of economy - and A states the same.

I would go with E since it explains why stock prices are good indicator for economy trend..

Not sure how A counters the argument - that stock market is a poor trend of economy - and A states the same.

I would go with E since it explains why stock prices are good indicator for economy trend..

pqhai, This is what I make of the argument. The conclusion states that market is a poor indicator of the economy. We need to find an answer that says otherwise.

Now A says something about the expert judgement of investors. What is the investors fake it, what if they buy a lot of shares just to create a fake boom even when there isn't any? So how does that make 'the market' a good indicator of economy?

IMO A.

We have to counter the argument: i.e. Recession deepens -> stock market soars vs Economy stronger --> stock market shaky (so we have to brake this link between market fluctuation vs economy.

A does that pretty well.

the argument says that MK - not good indicator of economic trends.

A. exactly. stock prices -> good indicator of future economic trends.
B. irrelevant
C. out of scope and irrelevant
D. well, nothing new..
E. SOME...already not good. if it's updated more frequent - then it should represent the economic trends. but we are given facts that in a depression, stocks went up. illogical.


A for me

The OA is correct and explanations provided in the thread appear sufficient. If there are any specific questions, please post them here and then click again on the "Request Expert Reply" button.

Option A is telling about the broker, how it weaken the argument, it is outside the scope

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