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V07-19

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Re: V07-19  [#permalink]

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New post 24 Mar 2017, 11:15
Bunuel wrote:
Official Solution:

Ten years ago and again five years ago, there were extended periods when the Bangladesh’s currency, the taka, was weak: its value was unusually low relative to the world’s most stable currencies. Both times a weak taka made Bangladesh’s manufactured products a bargain on world markets, and Bangladesh’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 taka 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 taka 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, Bangladesh’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 Bangladesh’s on the world market all currently have stable currencies.
E. A sharp improvement in the efficiency of Bangladesh’s manufacturing plants would make Bangladesh’s products a bargain on world markets even without any weakening of the taka relative to other currencies.


(A) Is irrelevant (politicians' stances / opinions don't have a direct bearing on any of the economic indicators in the argument).

(C) We cannot evaluate the effects of (c) until we know whether the purported rise in exports will be 'significant' (circular reasoning - we can't base advocacy for/against a policy on its uncertain results)

(D) Is irrelevant, as there's no material difference between this situation and the situation during the first two export booms: notice that, in those cases, the reference currencies were all stable as well

(E) Is irrelevant: the question asks us to undermine the politician's suggestion, not to suggest an alternative.


Answer: B



hey

i agree that all answer choices abde all are wrong but c is also not correct as

c in a way strengthens the claim to some extent saying that in case currency is made weak and export demand increases we can supply as much compared to previous years. please let me know if am wrong

otherwise even if we do not consider the above to be true still in no way it affects the argument by weakening it.
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Re: V07-19  [#permalink]

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New post 01 Jun 2017, 14:56
sayantanc2k wrote:
sathish.never@gmail.com wrote:
"Bangladesh’s manufacturing sector is now operating at near-peak levels."

Option B says the manufacturing sector is operating at near-peak levels but not at peak levels. We are assuming the effort is already maxed out. May be the difference in manufacturing effort (Peak - nearly peak) is enough to meet the export demand.

I think E was better fit until option B is rephrased.


Since the word "substantially" is used, it is alright to conclude that difference between near-peak and peak would not be able to cater to the substantial ("similarly sized") increase.

Option E is irrelevant altogether. The argument is about whether the plan to weaken taka would boost the export - the argument is not about whether some alternative plan could boost the export.


I disagree with you, this question combines both evaluation and weaken question. According to Kaplan method, one way to weaken the argument is to find another better explanation for the argument.
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New post 01 Jun 2017, 14:59
I believe E is enough to weaken the argument, unless the question asks us to find out what is the flaw that weakens the argument.
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New post 27 Oct 2017, 15:25
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True! My vote is for E.

If conclusion says X (weak currency) causes Y (increase exports), then any of the below ways would be sufficient to weaken it:

1. X not causing Y
2. Y causes X
3. Z causes Y

Option E is same as 3. We do not need to weaken taka (no need for X) because due to efficiency in manufacturing (Z), Bangladesh products would now be a better bargain on world mkts, which will increase exports (Y).

Option B is same as 1. It says "near-peak levels". Which means there isn't significant scope to increase production, which means "substantial export" (Y) may not be achieved. But this argument is not very strong.

I am not an economics expert. But taking the example that sayantanc2k gave earlier, if Bangladesh is producing 300 units for export, aren't we assuming that all 300 units are actually getting exported? If some other country is offering same product at reduced prices, then maybe Bangladesh is actually able to export only 50 units. So whether Bangladesh is able to OR not able to increase its manufacturing, it doesn't make an impact. But with a much weaker taka, Bangladesh's chances of exporting all 300 units will substantially increase. So option B is not really weakening the argument as strongly as E is.
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Re: V07-19  [#permalink]

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New post 22 Nov 2017, 01:17
Hi brunel
Can you please explain How B is weakening the politicians’ recommendation,??

what is the link that weakening politicians’ recommendation,?

Thanks
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Re: V07-19  [#permalink]

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New post 04 Mar 2018, 08:43
I think this is a poor-quality question and I don't agree with the explanation.
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Re: V07-19  [#permalink]

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New post 12 Mar 2018, 15:09
Very good question. E is the trap. It is giving an alternative to politician's recommendation and NOT undermining it B is the only possible answer as it is directly undermining the politician's recommendation

Lets re-read the question stem once 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?

I guess the author has purposely made it so complicated.

Let's rephrase the question stem and make it a little less complicate. The question stem is asking:
Which option will undermine the politician's recommendation the most?

Option A = Several of the politicians now recommending that the taka be allowed to become weak made that same recommendation before each of the last two periods of currency weakness. = Irrelevant

Option B = After several decades of operating well below peak capacity, Bangladesh’s manufacturing sector is now operating at near-peak levels.
If we see the colored part, it shows that previously increase in exports was possible as there was capacity to manufacture more. But currently it is already operating at near-peak capacity leaving little scope for the exports to increase.
Let's re-read the Politicians recommendation:
Now some politicians are saying that, in order to cause another similarly sized increase in exports, the government should allow the taka to become weak again.
Well you clearly see the recommendation is to cause another similar sized increase.
Clearly we do not have the capacity to do so because in past we were running under-capacity and currently we are running near-peak capacity.
So the Delta i.e. difference will never be the same and currently it will be minuscule versus the past delta.
Thus it clearly undermines the politician's suggestion and will never achieve its objective.

Option 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.
Are we discussing economics here? LOL. If you think otherwise, show me the word 'economy' in the question set. Irrelevant - Probably to woo Economists and wanna be economists into a sweet trap

Option D = Those countries whose manufactured products compete with Bangladesh’s on the world market all currently have stable currencies.
Irrelevant

Option E = A sharp improvement in the efficiency of Bangladesh’s manufacturing plants would make Bangladesh’s products a bargain on world markets even without any weakening of the taka relative to other currencies.
Extremely strong contender to B but it can be the OA IF the question stem would have asked for AN ALTERNATIVE to the politicians recommendation.
Since the question stem talks about weaking the recommendation and not an alternative to the recommendation, we eliminate this option with no regret.
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Re: V07-19  [#permalink]

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New post 28 Apr 2018, 05:44
sayantanc2k wrote:
ravitejuppu wrote:
Thanks for the response, but one thing which I still don't understand is, even if the manufacturing is at its peak and if the taka value is relatively high, then the other countries might be hesitant to import the products from Bangladesh right?

Besides, in your explanation you are emphasizing on exports getting maxed out due to the already high manufacturing, but nothing in the question stem states that these products manufactured in Bangladesh are primarily for exports, what if they are marketed with in Bangladesh and if that's the case, the Politicians idea would attract other countries to import if the taka value is lowered and thus increase exports.

Also, I don't understand why OE is irrelevant here, because this option is directly emphasizing on the facts that exports can be increased without lowering the taka value. Again, I might be skewed in my thought process. So any suggestion will be of great value not just in this question but my approach in CR in general.

E. A sharp improvement in the efficiency of Bangladesh’s manufacturing plants would make Bangladesh’s products a bargain on world markets even without any weakening of the taka relative to other currencies.

(E) Is irrelevant: the question asks us to undermine the politician's suggestion, not to suggest an alternative.


Ok, I shall try to explain once again. No, I am not indicating that export is maxed out. My point is that the manufacturing capacity is maxed out:
Let us say Bangladesh is currently manufacturing 1000 units of items - some of which (say 700 units) is used within Bangladesh and some (say 300 units) are exported (the distribution does not matter).

Bangladesh CANNOT produce more than 1000 units. Now suppose the Bangladesh currency is weakened. Foreign countries will now want to buy 600 units ( instead of 300 they were buying previously). However Bangladesh does not have the capacity to produce this excess demand of 600-300 = 300 units. Bangladesh is now required to produce 1300 units (700 for domestic use and 600 for export), but it has capacity to produce only 1000 units. Therefore weakening the currency does not help boost export (it boosted export demand, but could not boost export supply because of manufacturing constraint).

The conclusion is that weakening taka will boost export. There are two parts: weakening taka and boost export. The weakening statement must point out why weakening taka will NOT boost export. Option E does not address the weakening taka part.

Just the fact that 1000 units are being produced doesn't mean that 1000 units are being consumed.
Please clarify
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Re: V07-19  [#permalink]

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New post 04 May 2018, 22:07
A,C,D,E irrelevant
Answer B

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Re: V07-19 &nbs [#permalink] 04 May 2018, 22:07

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