Economist: Unemployment will soon decrease. If total government

Question

Economist: Unemployment will soon decrease. If total government spending significantly increases next year, the economy will be stimulated in the short term and unemployment will decrease. If, on the other hand, total government spending significantly decreases next year, businesses will retain more of their earnings in the short term and employ more workers, thereby decreasing unemployment.

The conclusion drawn by the economist is properly inferred if which one of the following is assumed?

(A) Either total government spending will significantly decrease next year or else total government spending will significantly increase next year.

(B) Government officials are currently implementing policies that are intended to reduce unemployment.

(C) If there is a significantly increased demand for workers, then there will be a significant decrease in unemployment.

(D) A significant increase in total government spending will slow the economy in the long run.

(E) If the economy is not stimulated and businesses do not retain more of their earnings, then unemployment will not decrease.

MuditKapoor · Answer

Hi,

I am confused in A & E.

Though, A is a must factor but to me E also seems fine.

Could anyone explain why E is ruled out?

Is it because both can't be done simultaneously ?

PAKU09 · Answer

Can someone explain why E is wrong

thankss

ajay0520 · Answer

here author has concluded that unemployement will decrease by presenting two scenerio which is government spending increasing or decreasing significantly. in any other case the conclusion wont be valid based on the information provided.
remember( Assumption is an unstated piece of information that must be true for the logic of argument to work) and option A does exactly that by showing that there is no other scenerio. 
but Option e is only reexplaining what's mentioned in passage.

Daniel12581 · Answer

If E is true but A is not true (i.e. government spending is neither significantly increased or decreased), then E would not even matter. My reasoning was E only covered a specific case while A covered all the cases (both if statements), so A is correct. Hope this helped!

km0808 · Answer

Conclusion is unemployment will decrease, and it depends on the Govt spending either increasing or decreasing. And this is what the argument depends upon if neither happens argument will break. Option E is no new information.

samarpan.g28 · Answer

Focus on the bold part:  If total government spending significantly increases next year, the economy will be stimulated in the short term and unemployment will decrease. If ,  on the other hand ,  total government spending significantly decreases next year, businesses will retain more of their earnings in the short term and employ more workers, thereby decreasing unemployment.

This means  either  the government spending will increase,  or  it will decrease. We cannot assume that both will happen simultaneously. Option E says that if neither is taking place, then unemployment will not decrease. This is wrong since  the supporting premises of our conclusion give an Either-Or condition . Option A correctly says so.

I hope this helps.

Heix · Answer

________________
 MartyMurray 
 GMATNinja

MartyMurray · Answer

Economist: Unemployment will soon decrease. If total government spending significantly increases next year, the economy will be stimulated in the short term and unemployment will decrease. If, on the other hand, total government spending significantly decreases next year, businesses will retain more of their earnings in the short term and employ more workers, thereby decreasing unemployment.

The conclusion of the argument is the following:

Unemployment will soon decrease.

The reasoning is that, if government spending either increases or decreases significantly,, the consequences of that increase or decrease will result in a decrease in unemployment.

The conclusion drawn by the economist is properly inferred if which one of the following is assumed?

This is an Assumption question, and the correct answer will be information that enables the evidence to support the conclusion.

(A) Either total government spending will significantly decrease next year or else total government spending will significantly increase next year.

This choice is interesting.

The economist's conclusion that "unemployment will soon decrease" is based on the idea that that outcome will follow from the consequences of either an increase or a decrease in government spending.

So, what the economist has assumed is that the government spending will either increase or decrease.

After all, if government spending will not increase or decrease, then there's no reason to believe that the consequences the economist predicts will lead to a decrease in unemployment will occur. In that case, the facts that the economist has presented are not a reason to believe that unemployment will decrease.

So, for the evidence to effectively support the conclusion, it has to be true that government spending will either increase or decrease significantly next year.

Keep.

(B) Government officials are currently implementing policies that are intended to reduce unemployment.

This choice strengthens the argument but is not an assumption that connects the evidence to the conclusion.

After all, the reasoning of the argument is that the consequences of an increase or decrease in government spending will result in a decrease in unemployment.

That reasoning does not require that the government also implement policies intended to reduce unemployment. After all, even if such policies are not implemented, given what the economist says, there still should be a decrease in unemployment.

Eliminate.

(C) If there is a significantly increased demand for workers, then there will be a significant decrease in unemployment.

The economist states as fact that, if the economy is stimulated or businesses retain more of their earnings, unemployment will decrease.

So, the economist does not assume that, if there is a significantly increased demand for workers, then there will be a significant decrease in unemployment. Rather, the economist states outright that there will be a decrease in unemployment under such circumstances.

Eliminate.

(D) A significant increase in total government spending will slow the economy in the long run.

This may be true, but it is not an assumption involved in the argument since the argument does not involve the idea that the economy will slow down.

Eliminate.

(E) If the economy is not stimulated and businesses do not retain more of their earnings, then unemployment will not decrease.

This choice goes in the wrong direction.

The argument is about what WILL happen if the economy IS stimulated or businesses DO retain more of their earnings.

The argument does not involve the assumption that a decrease in unemployment WILL NOT happen if those events do not occur.

After all, even if unemployment will decrease if those events do not occur, it could still decrease if one of those events does occur.

Eliminate.

Correct answer:   A

Economist: Unemployment will soon decrease. If total government

Prep Toolkit

Top 5 GMAT Debrief Videos

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

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards

GMAT Critical Reasoning (CR) Questions

Economist: Unemployment will soon decrease. If total government

Prep Toolkit

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

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards