| Critical Reasoning Butler: March 2025 |
| March 16 | CR 1 | CR 2 |
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CR 1 Conventional wisdom would suggest providing aid to small businesses first during a recession because they are at the greatest risk of collapsing if they encounter a financial crisis. The current recession poses especially harsh risks to small businesses and almost none to financial institutions, particularly banks. Nevertheless, economic experts are recommending providing aid to banks first rather than to small businesses.
Which of the following, if true, provides the strongest reason for the economic experts’ recommendation?
A. Banks are vulnerable to financial crisis when their revenue streams are severely impacted by other factors.
B. Banks are no more likely than small businesses to be able to weather a recession if they have not experienced a previous recession of similar magnitude.
C. The aid received by banks during the previous recession will be of no benefit during the current recession.
D. Small businesses that successfully weather a financial crisis are likely to develop sound strategies for overcoming at least some major financial challenges that they have not faced thus far.
E. During recessions, in the absence of aid, banks generally put stringent limits on the disbursement of loans, which are essential for small businesses to function.
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CR 2 CEO: Many potential investors who have only received second-hand accounts of our internal workings believe that we have an inadequate Human Resources Department. This belief is unfounded, as evidenced by the fact that over the past four years, this company has devoted more resources to improving hiring processes and employee discipline protocols than any of our peers have.
Which of the following, if true, most seriously undermines the reasoning in the CEO’s argument?
A. In the CEO’s company, expenditure on the Human Resources Department has been rising more slowly over the past four years than it has in several other similar companies.
B. In general, the adequacy of a company’s Human Resources Department is not as important to an investor considering investing in the company as is the company’s overall market share.
C. Only companies with severely inadequate Human Resources departments need to spend large amounts of resources on improving hiring processes and employee discipline protocols.
D. Generally, the efficiency of a company’s Human Resources Department depends on the number of employees and local labor laws.
E. Over the past four years, several prominent investors have invested in the company.