Official Solution:
An economist asserts that a free trade agreement will benefit Country A's automobile industry as long as the industry remains competitive globally; that the industry will remain competitive as long as it continues to innovate; and that it will continue to innovate as long as it receives sufficient investment.
If the assertions above are correct, which of the following further predictions can logically be derived from them?
A. If the automobile industry in Country A does not receive sufficient investment, it will not continue to innovate.
B. If the automobile industry in Country A continues to innovate, it will benefit from the free trade agreement.
C. If there is a global recession, the automobile industry in Country A will cease to innovate.
D. The automobile industry in Country A will receive sufficient investment indefinitely.
E. Country A's economy will become the most dominant in the automobile sector globally.
Correct Answer: B. If the automobile industry in Country A continues to innovate, it will benefit from the free trade agreement. (B) Correctly connects the conditions laid out: innovation leads to competitiveness, and competitiveness under a free trade agreement leads to benefits. Hence, if innovation continues, then the benefits from the free trade agreement will follow because competitiveness is maintained as a result of innovation.
(A) If the automobile industry in Country A does not receive sufficient investment, it will not continue to innovate. (A) We only know that sufficient investment guarantees innovation but we don't know if insufficient investment guarantees no innovation. We cannot assume that they are mutually exclusive. Even without continuous investment some innovation may take place, perhaps at a smaller scale. However, based on the argument, we only know that innovation will be guaranteed as long as the auto industry receives sufficient investment. Eliminate.
Additional comments on A): We only know that if a condition is met, a positive result is guaranteed.
Thus the proper logical application would be to say that if the condition is NOT met, then a positive result is NOT guaranteed.
Which is different from "A" which says that if the condition is NOT met, the result is GUARANTEED to be negative.
Illustration of the Application: if you take care of your garden, you will have beautiful flowers. But we can't quite translate it to say that if you don't take care of your garden, you will certainly NOT have beautiful flowers. You still may, perhaps it is an unlikely outcome, but it is guaranteed to not happen, it is just not guaranteed to happen. Another take would be - You are not guaranteed to fail, just not guaranteed to succeed. Hope it helps.
(C) If there is a global recession, the automobile industry in Country A will cease to innovate. (C) introduces an external factor (global recession) that is not covered by the economist’s assertions. There is no direct connection between a recession and innovation. Perhaps during the recession there will be less investment but maybe there will be even more - we do not know and we cannot assume anything else. This statement is insufficient by itself and irrelevant. Eliminate.
(D) The automobile industry in Country A will receive sufficient investment indefinitely. This answer choice makes a prediction that is not based on any of the stated facts. We do not know or have any reason to believe that investments will continue in the future. Eliminate
(E) Country A's economy will become the most dominant in the automobile sector globally. This choice goes way beyond the provided facts. There are many conditions that have to happen for this to be true and we do not have any evidence that it will indeed happen. Eliminate
Answer: B