Logical Reasoning

PT127 · S3 · Q8 Economist: During a recession

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Economist: During a recession, a company can cut personnel costs either by laying off some employees without reducing the wages of remaining employees or by reducing the wages of all employees without laying off anyone.

Evidence

During a recession, a company can cut personnel costs either by laying off some employees without reducing the wages of remaining employees or by reducing the wages of all employees without laying off anyone.

Both damage morale, but layoffs damage it less, since the aggrieved have, after all, left.

Conclusion (thus)

When companies must reduce personnel costs during recessions, they are likely to lay off employees.

Evaluate

Morale may only be one of many factors that companies consider when deciding whether to reduce wages for all employees or lay some employees off.

They may also consider like the expected duration of the recession as well as the difficulty recruiting new employees once the recession ends.

8.

Which one of the following, if true, most strengthens the economist's reasoning?

  1. Correct

    Employee morale is usually the

    Why this is right

    This makes the morale of the company’s employees more likely to be the deciding factor and thereby more likely that the company will decide to layoff employees during a recession.

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

    87% picked this

  2. In general, companies increase wages

    Out of Scope

    Increasing wages is not relevant to the argument about how to cut personnel costs during a recession.

    0% picked this

  3. Some companies will be unable

    Out of scope

    Whether companies can make a profit during a recession is not relevant to the argument about how to cut personnel costs during a recession.

    1% picked this

  4. When companies cut personnel costs

    Too Weak

    This is only true for some employees.

    11% picked this

  5. Some companies that have laid

    Too Weak

    Although this is a tempting answer as it appears to provide a drawback of the plan to layoff employees, it is too weak to affect the argument since it is only true for some companies.

    0% picked this

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