Twelve years ago and again five years ago, there were extended periods

Question

Twelve years ago and again five years ago, there were extended periods when Country X'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 Country X's manufactured products a bargain on world markets, and Country X's exports were up substantially. Now some politicians are saying that in order to cause another large 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, Country X's manufacturing sector is now operating at 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 Country X's on the world market all currently have stable currencies.

(E) Any improvement in the efficiency of Country X's manufacturing plants would make Country X's products more competitive on world markets even without any weakening of the pundra relative to other currencies.

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Official Answer

B

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AndrewN · Accepted Answer

Yes, Aug, the answer is (B). But I can see that a number of people select (E), so I thought it would be worth discussing what separates the two. First, the incorrect option:

The problem here is this  even without  condition. I know, it might seem reasonable to argue that if a certain factor, which we can call  weakening the national currency , does not directly lead to the desired result, then a recommendation based on implementing that factor would be weakened. But the first part of the answer choice overrides such a consideration, because  any improvement  could come with or without the factor in question, so the factor, if implemented,  could still lead to the desired result .

If manufacturing  is now operating at peak levels , then the recommendation  to cause another large increase in exports  by devaluing the currency makes no sense: the factories cannot produce more products for export, so even an increase in demand in the world markets for those products would be met with shortages.

Remember, in questions that center on strengthening or weakening a plan or recommendation, you had better be clear on  exactly  what that plan aims to  achieve . Note that the question asks us to find an answer that would cast doubt on the recommendation    its aim . We are not looking to assess whether this particular recommendation is the best. If the goal is met, then the recommendation can be considered a success.

- Andrew

AUG1523 · Answer

Is the answer B? If not, E? A, C and D must be incorrect

genericUser · Answer

Twelve years ago and again five years ago, there were extended periods when Country X'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 Country X's manufactured products a bargain on world markets, and Country X's exports were up substantially. Now some politicians are saying that in order to cause another large 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.
Incorrect. Maybe they are right again? Anyway, the past does not guarantee the future

(B)  After several decades of operating well below peak capacity, Country X's manufacturing sector is now operating at peak levels.
Correct. If pundra is weakend, but the industrial infrastructure is not able to face the increasing demand, then the export will not increase

(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.
Incorrect.   Only=red flag

(D) Those countries whose manufactured products compete with Country X's on the world market all currently have stable currencies.
Incorrect. This strengthen the argument, exported products are the sme but cost less

(E) Any improvement in the efficiency of Country X's manufacturing plants would make Country X's products more competitive on world markets even without any weakening of the pundra relative to other currencies.
Incorrect. Out of scope, we are asked to evaluate a plan, not to provide a different one

btsaami · Answer

Plan: To cause another large increase in exports, the government should allow the pundra to become weak again.
Goal: To increase export significantly.
Premise: Twelve years ago and again five years ago, there were extended periods when Country X'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 Country X's manufactured products a bargain on world markets, and Country X's exports were up substantially.
Assumption: Earlier method would still work this time.
Prethinking: Any option which provides evidence to weaken the above assumption will be the answer.
Why correct? B) Export operating at peak levels will leave no capacity to accommodate any additional export demands which tells us even if we lower the currency, no matter what the export will not increase.
Why wrong? A) Politicians making the same demand during this time, even if they are experts does not support in any substantive way whether export will increase as a result. 
C) We don't know whether currency will become strong or rise in export could be significant. Significant Rise in export even when the currency is weak might support the plan's success.
D) Out of scope. Other currencies having stable currency doesn't definitively answers what will be the economy state of Pundra.
E) This regards the whole method but doesnt answer whether this method will increase export.

anushree01 · Answer

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?

The key to get this question correct is noticing the fact that the question stem is asking to doubt that the aim will not be achieved.

Aim was : Rise in exports
Potential reason to doubt : Maybe manufactures cant produce more so cannot lead to more exports in any way, which is what only Option B says

Happy learning

Twelve years ago and again five years ago, there were extended periods

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Twelve years ago and again five years ago, there were extended periods

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