Reading Comprehension

PT106 · S4 · P3 · Q20 Steady-State vs. Neoclassical Economics

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Recently, a new school of economics called steady-state economics has seriously challenged neoclassical economics, the reigning school in Western economic decision making.

Topic

The debate between steady-state economics and neoclassical economics regarding economic growth and environmental limits.

Framework

Present Debate

Main Point

The passage presents a debate: Neoclassical economists see no environmental limits to economic growth, while steady-state economists argue that unlimited growth is unsustainable and propose alternatives such as conservation to keep the economy in balance with nature. *The "Most Valuable Sentence" appears at the beginning of paragraph 2: *

P1: Introduction to the Competing Economic Models

This paragraph introduces the two schools: neoclassical economics, which dominates Western economic thinking and claims there are no limits to growth, and steady-state economics, which challenges that idea by raising concerns about non-economic constraints (like the environment).

P2: Explaining the Debate—Nature’s Limits vs. Unlimited Growth

Here, the author details the steady-state view that the economy depends on natural resources, which are limited and can't support endless growth. Steady-state economists argue for an optimal size for the economy and warn that exceeding it would cause more harm than good. In contrast, neoclassical economists believe resources can be replaced and growth can continue indefinitely.

P3: The Case for Steady-State—Alternatives to Growth

This paragraph discusses how some steady-state economists believe the Western world has already grown past optimal levels. They propose that checking economic growth doesn't mean stagnation—it's possible to satisfy human needs through better resource management (like conservation and recycling), rather than just by expanding the economy.

20.

Which one of the following most accurately describes what the last paragraph does in the passage?

It contradicts the ways in
Out of Scope: judging between
The verb "contradicts" is very strong. There aren't any contradictions in the last paragraph. There is some data mentioned in the first sentence, and steady-state interprets that certain data to mean that Western economies have already exceeded their optimal size. The author doesn't provide any criterion for judging between steady-state and neoclassical. The final sentence provides criterion for judging the success of a steady-state economy.
3% picked this
It gives an example that
Out of Scope: recommends
The author doesn't insert her opinion into this passage at all, so the last paragraph definitely doesn't recommend any economic policy. If anything, the last paragraph seems to have a charitable, sympathetic view towards steady-state (the new economic school), so it also seems opposite to say that the final paragraph illustrates the weakness of steady-state.
4% picked this
It introduces an objection to
Out of Scope: less successful
There is an objection to the new school (neoclassical economists warn "checking economic growth will lead to economic stagnation") But the author doesn't insert her opinion into this passage at all, so the last paragraph does not argue that steady-state (the new school) will be less successful at achieving the basic goal of "satisfying human wants".
1% picked this
Correct
It notes an objection to
Why this is right
There is an objection to implementing the policies of the new steady-state economic school: neoclassical economists object that "checking economic growth will lead to economic stagnation". And then steady-state says, "there are alternatives (an additional policy) to growth that still accomplish what is required of any economy." One additional policy identified is "conservation". By making better use of existing resources (for instance through recycling), an economy could "implement alternatives to growth without sacrificing the ability to satisfy the wants of producers of consumers", which is identified as the goal that is required of any economy.
Skill tested: Paragraph Purpose · how this choice captures the passage's function is the move to repeat next time.
71% picked this
It contrasts the policy of
Out of Scope: differing views
The last paragraph identifies the basic goal of any economy as "the satisfaction of human wants". The two economic schools don't differ on the idea that this is the basic goal of an economy. They only differ in terms of how they want to pursue the goal. Neoclassical wants to pursue it through never-ending growth, whereas steady-state wants to pursue it through means like conservation.
21% picked this

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