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16 Sep 2014, 02:28
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Twelve years ago and again five years ago, there were extended periods when the Darfir Republic's currency, the pundra, was weak: its value was unusually low relative to the world's most stable currencies. Both times a weak pundra made Darfir's manufactured products a bargain on world markets, and Darfir's exports were up substantially. Now some politicians are saying that, in order to cause another similarly sized increase in exports, the government should allow the pundra to become weak again.
Which of the following, if true, provides the government with the strongest grounds to doubt that the politicians' recommendation, if followed, will achieve its aim?
A. Several of the politicians now recommending that the pundra be allowed to become weak made that same recommendation before each of the last two periods of currency weakness.
B. After several decades of operating well below peak capacity, Darfir's manufacturing sector is now operating at near-peak levels.
C. The economy of a country experiencing a rise in exports will become healthier only if the country's currency is strong or the rise in exports is significant.
D. Those countries whose manufactured products compete with Darfir's on the world market all currently have stable currencies.
E. A sharp improvement in the efficiency of Darfir's manufacturing plants would make Darfir's products a bargain on world markets even without any weakening of the pundra relative to other currencies.
Which of the following, if true, provides the government with the strongest grounds to doubt that the politicians' recommendation, if followed, will achieve its aim?
A. Several of the politicians now recommending that the pundra be allowed to become weak made that same recommendation before each of the last two periods of currency weakness.
B. After several decades of operating well below peak capacity, Darfir's manufacturing sector is now operating at near-peak levels.
C. The economy of a country experiencing a rise in exports will become healthier only if the country's currency is strong or the rise in exports is significant.
D. Those countries whose manufactured products compete with Darfir's on the world market all currently have stable currencies.
E. A sharp improvement in the efficiency of Darfir's manufacturing plants would make Darfir's products a bargain on world markets even without any weakening of the pundra relative to other currencies.
16 Sep 2014, 02:28
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Official Solution:
Twelve years ago and again five years ago, there were extended periods when the Darfir Republic's currency, the pundra, was weak: its value was unusually low relative to the world's most stable currencies. Both times a weak pundra made Darfir's manufactured products a bargain on world markets, and Darfir's exports were up substantially. Now some politicians are saying that, in order to cause another similarly sized increase in exports, the government should allow the pundra to become weak again.
Which of the following, if true, provides the government with the strongest grounds to doubt that the politicians' recommendation, if followed, will achieve its aim?
A. Several of the politicians now recommending that the pundra be allowed to become weak made that same recommendation before each of the last two periods of currency weakness.
B. After several decades of operating well below peak capacity, Darfir's manufacturing sector is now operating at near-peak levels.
C. The economy of a country experiencing a rise in exports will become healthier only if the country's currency is strong or the rise in exports is significant.
D. Those countries whose manufactured products compete with Darfir's on the world market all currently have stable currencies.
E. A sharp improvement in the efficiency of Darfir's manufacturing plants would make Darfir's products a bargain on world markets even without any weakening of the pundra relative to other currencies.
General Approach
The general approach to tackle such reasoning problems involves understanding the premises and conclusion of the argument and then identifying any key assumptions that link them. The aim is to find information that if true, would weaken the conclusion or make it less likely. In this case, the argument is suggesting that a repeat of past events (weakening the pundra) would likely lead to the same outcome (increase in exports). Our goal is to find information that either suggests that the current circumstances are significantly different from the past or that the assumed correlation between currency weakness and increased exports might not hold.
Correct Answer
B) After several decades of operating well below peak capacity, Darfir's manufacturing sector is now operating at near-peak levels. This option provides a key difference between the current situation and the past. In the past, when the pundra was weak, there was excess manufacturing capacity that could be used to boost exports. Currently, the manufacturing sector is operating at near-peak levels, suggesting that there is little room for increased production. Thus, even if a weak pundra increases demand for Darfir's products (as it has in the past), the manufacturing sector might not be able to produce enough goods to meet this demand and hence, exports might not increase as expected.
Incorrect Answer
A) Several of the politicians now recommending that the pundra be allowed to become weak made that same recommendation before each of the last two periods of currency weakness. This option does not provide any information that questions the politicians' conclusion. The fact that the same politicians made similar recommendations in the past does not provide any reason to doubt the likely outcome of their current recommendation.
C) The economy of a country experiencing a rise in exports will become healthier only if the country's currency is strong or the rise in exports is significant. This statement is irrelevant to the argument. The argument is about the link between currency weakness and increased exports, not about the health of the economy.
D) Those countries whose manufactured products compete with Darfir's on the world market all currently have stable currencies. This statement is also irrelevant to the argument. The currency situation of other countries does not affect the link between a weak pundra and increased exports in Darfir.
E) A sharp improvement in the efficiency of Darfir's manufacturing plants would make Darfir's products a bargain on world markets even without any weakening of the pundra relative to other currencies. This statement provides an alternative way in which Darfir's exports could be increased. However, it does not address the link between a weak pundra and increased exports, which is the crux of the argument.
Answer: B
Twelve years ago and again five years ago, there were extended periods when the Darfir Republic's currency, the pundra, was weak: its value was unusually low relative to the world's most stable currencies. Both times a weak pundra made Darfir's manufactured products a bargain on world markets, and Darfir's exports were up substantially. Now some politicians are saying that, in order to cause another similarly sized increase in exports, the government should allow the pundra to become weak again.
Which of the following, if true, provides the government with the strongest grounds to doubt that the politicians' recommendation, if followed, will achieve its aim?
A. Several of the politicians now recommending that the pundra be allowed to become weak made that same recommendation before each of the last two periods of currency weakness.
B. After several decades of operating well below peak capacity, Darfir's manufacturing sector is now operating at near-peak levels.
C. The economy of a country experiencing a rise in exports will become healthier only if the country's currency is strong or the rise in exports is significant.
D. Those countries whose manufactured products compete with Darfir's on the world market all currently have stable currencies.
E. A sharp improvement in the efficiency of Darfir's manufacturing plants would make Darfir's products a bargain on world markets even without any weakening of the pundra relative to other currencies.
General Approach
The general approach to tackle such reasoning problems involves understanding the premises and conclusion of the argument and then identifying any key assumptions that link them. The aim is to find information that if true, would weaken the conclusion or make it less likely. In this case, the argument is suggesting that a repeat of past events (weakening the pundra) would likely lead to the same outcome (increase in exports). Our goal is to find information that either suggests that the current circumstances are significantly different from the past or that the assumed correlation between currency weakness and increased exports might not hold.
Correct Answer
B) After several decades of operating well below peak capacity, Darfir's manufacturing sector is now operating at near-peak levels. This option provides a key difference between the current situation and the past. In the past, when the pundra was weak, there was excess manufacturing capacity that could be used to boost exports. Currently, the manufacturing sector is operating at near-peak levels, suggesting that there is little room for increased production. Thus, even if a weak pundra increases demand for Darfir's products (as it has in the past), the manufacturing sector might not be able to produce enough goods to meet this demand and hence, exports might not increase as expected.
Incorrect Answer
A) Several of the politicians now recommending that the pundra be allowed to become weak made that same recommendation before each of the last two periods of currency weakness. This option does not provide any information that questions the politicians' conclusion. The fact that the same politicians made similar recommendations in the past does not provide any reason to doubt the likely outcome of their current recommendation.
C) The economy of a country experiencing a rise in exports will become healthier only if the country's currency is strong or the rise in exports is significant. This statement is irrelevant to the argument. The argument is about the link between currency weakness and increased exports, not about the health of the economy.
D) Those countries whose manufactured products compete with Darfir's on the world market all currently have stable currencies. This statement is also irrelevant to the argument. The currency situation of other countries does not affect the link between a weak pundra and increased exports in Darfir.
E) A sharp improvement in the efficiency of Darfir's manufacturing plants would make Darfir's products a bargain on world markets even without any weakening of the pundra relative to other currencies. This statement provides an alternative way in which Darfir's exports could be increased. However, it does not address the link between a weak pundra and increased exports, which is the crux of the argument.
Answer: B
14 Jun 2016, 19:35
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"Twelve years ago and again five years ago, there were extended periods.." refers to the time in the past. Polticians are making a suggestion to redo it again for the current time period. So, the thing about the manufacturing plants in the Option B doesn't stand.
