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Had the party's economic theories been sound and had it succeeded in implementing its program, the inflation rate would have lessened considerably. But because the inflation rate actually increased, the party's economic theories were far off the mark.
Premise: If A AND B, then C.
Conclusion: if no C, then no A.

The reasoning is faulty. The key here is to pay attention to the 'and'. 'And' implies that BOTH things A and B MUST occur for C to occur. E.g. if only A but not B, then C can be or not be the case.
Thus, the correct statement would have been: "But because inflation rate actually increased, EITHER the party's economic theories were NOT sound OR it did NOT succeed in implementing the program, or BOTH." In other words: if no C, the only thing we can rule OUT is that A and B happened together. We can be SURE that A and B did not happen together.


The flawed reasoning in which one of the following arguments most closely resembles the flawed reasoning in the argument above?

(A) If the people who inhabited the valley for so long had been invaded, or if there had been a dramatic climatic change, there would have been changes in the valley's architecture. But architecture in the valley remained the same throughout their stay. Thus, the valley people must not have been invaded at any time during their stay.
FALSE. This statement uses OR, instead of AND. Logical rules are different for OR and AND.

(B) Many people fear that if the opposition party wins the election and keeps its promise to cut wages dramatically, workers in key industries will strike. But because the workers have promised not to strike, these workers must think the party will not keep its promise of a dramatic wage cut.
This answer might be correct but it introduces the 'think' component. Let's look at the other options.

(C) If the company had succeeded in selling its subsidiaries and used the cash to purchase the new patent, its stock price would have doubled in the last two years. But the price of the stock did not increase in that time. Thus, the company must have failed to sell its subsidiaries.
Correct. Same logic as outlined above.

(D) City residents were expected to show a great deal of support for the rebels if the battle was won and the jailed rebel leaders freed. Residents have shown a great deal of support for the rebels for the last three days. Therefore, the rebels must have won the battle.
This is faulty reasoning, but for different reasons than the original question.

(E) If the television station's new weather forecasting equipment had been worth the investment, the accuracy of its forecasts would have risen, along with its ratings. But the station's ratings actually decreased. Thus, the new equipment is no improvement on the old.
This statement has no 'AND'.

The correct answer is, IMO, C.
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