Logical Reasoning

PT130 · S1 · Q19 Economist: Our economy's weakness

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Economist: Our economy’s weakness is the direct result of consumers’ continued reluctance to spend, which in turn is caused by factors such as high-priced goods and services.

Evidence

Our economy’s weakness is the direct result of consumers’ continued reluctance to spend, which in turn is caused by factors such as high-priced goods and services.

This reluctance is exacerbated by the fact that the average income is significantly lower than it was five years ago.

Conclusion

Thus, even though it is not a perfect solution, if the government were to lower income taxes, the economy would improve.

Evaluate

Lower income taxes is a new term. The argument assumes that lowering income taxes will reduce consumers’ reluctance to spend.

19.

Which one of the following is an assumption required by the economist's argument?

  1. Increasing consumer spending will cause

    Contradiction

    Increasing consumer spending will cause prices for goods and services to increase.

    4% picked this

  2. If consumer spending increases, the

    Out of Scope

    The reason why average incomes are lower is not relevant to the argument.

    2% picked this

  3. If income taxes are not

    Speculation

    The argument concludes that the economy will improve if taxes are lowered. But it does not say what would happen if taxes are not lowered.

    5% picked this

  4. Correct

    Consumers will be less reluctant

    Why this is right

    This connects lowering taxes with consumers being less reluctant to spend, thereby improving the economy.

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

    89% picked this

  5. Lowering income taxes will have

    Out of Scope

    Government spending is not relevant to the argument.

    1% picked this

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