Logical Reasoning

PT122 · S1 · Q13 Robin: When a region’s economy

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Robin: When a region’s economy is faltering, many people lose their jobs.

Terry's Conclusion (so)

Price collapses cannot trigger economic recovery by increasing consumer spending.

Terry's Evidence

If people have no jobs and no money for anything but basic necessities, they can't increase their spending.

Evaluate

Since we're supposed to logically counter Terry's objection, we need a way to respond to Terry's objection, while defending Robin's view.

Robin's view was that when prices collapse from a bad economy, it encourages an uptick in spending on consumer goods, which leads to economic improvement.

Goal

So, GIVEN THAT people with no jobs and money only for basic necessities can't increase their spending, HOW CAN WE ARGUE that price collapses do lead to more consumer spending and then economic improvement?

13.

Which one of the following, if true, most undermines Terry's objection to Robin's analysis?

  1. Companies hire more workers after

    No Impact

    This states that companies hire more workers after the economy improves, but we need a way to explain how how spending initially increases when prices drop, which then leads to the improvement.

    12% picked this

  2. Even when economic conditions are

    No Impact

    This suggests that even during economic decline, consumers anticipate future improvement, which doesn't address how immediate price collapses lead to increased spending despite high unemployment rates.

    4% picked this

  3. Correct

    Even people who do not

    Why this is right

    This indicates that those who retain their jobs during economic downturns tend to save money, providing them with savings to spend when prices drop, thus supporting Robin’s argument by explaining how spending might increase despite unemployment. We can say, "you're right Terry. People without jobs can't increase their spending. But people with jobs sure can!"

    Skill tested: Weaken · how this choice captures the argument's function is the move to repeat next time.

    68% picked this

  4. People who have lost their

    Irrelevant

    This mentions continued purchase of essential items by the unemployed, which agrees with Terry’s view that essentials don’t influence spending on non-essentials like flat screens, leaving Robin's argument unsupported.

    14% picked this

  5. The prices of some consumer

    Irrelevant

    This discusses stable prices on some goods during a price collapse, not addressing the context of increased spending on reduced-priced items leading to recovery, which is Robin’s focal point.

    2% picked this

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