Logical Reasoning

PT157 · S2 · Q4 Economist: Our country needs

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Economist: Our country needs as much capital as possible from overseas investors in order to sustain our economy.

Evidence

Our country needs as much capital as possible from overseas investors in order to sustain our economy.

Intermediate Conclusion (Hence)

We cannot afford any reduction in the amount of capital that these investors have invested here.

Main Conclusion (Therefore)

To sustain our economy, we should pass laws making it much more difficult for overseas investors to remove their capital.

Evaluate

There isn't a huge gap in logic between needing as much capital as possible (the evidence) and not wanting any reduction in the existing amount of capital (the intermediate conclusion).

But there is a significant gap between the intermediate conclusion and the main conclusion. Wanting to avoid any reduction in investments does not automatically support the idea that we should pass laws making it more difficult for investors to remove their capital.

This main conclusion is a recommendation. Plans and recommendations tend to be vulnerable to a variety of objections, and the correct answer to a Weaken question might focus on any one of them. It helps to think about the kinds of objections that this argument is particularly vulnerable to.

For example, a recommendation might have the opposite effect. Maybe these laws would discourage investors from making future investments, which would prevent us from acquiring "as much capital as possible." Or there might be some reason why this particular recommendation can't be implemented, or won't be effective. Maybe these types of laws are almost impossible to enforce, and therefore tend to be ineffective.

Goal

Look for an answer that suggests the recommendation might backfire or be impossible to implement correctly. But, since objections can take many forms, read answers with an open mind. We want to notice if one attacks the recommendation in another way.

4.

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

  1. To sustain its economy, the

    Out of Scope: diversify

    This answer discusses diversifying investments across the country's industries. The argument is about attracting and retaining overseas investment capital, not about how that capital is distributed across industries. Whether the country needs to diversify its own investments is a separate issue from whether it should restrict overseas investors' ability to remove their capital. This answer addresses a different economic question entirely.

    2% picked this

  2. Correct

    Laws that would make it

    Why this is right

    This is a classic "the recommendation backfires" weakener. The economist argues for laws that would make it harder for overseas investors to remove their capital, in order to retain as much overseas capital as possible. But this answer reveals a devastating unintended consequence: such laws would strongly discourage overseas investors from investing any additional capital. If investors know that once they put money in, they cannot get it out, they will simply not invest in the first place. The country needs "as much capital as possible" from overseas investors, but the restrictive laws would reduce the total pool of overseas capital by deterring new investment — directly undermining the stated goal of the policy.

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

    83% picked this

  3. The historical periods during which

    Premise Support

    This answer provides historical evidence that overseas investment is correlated with economic growth. But this merely supports the premise that the country needs overseas capital to sustain its economy — something we are already given as evidence. Reinforcing a premise that is not in dispute does not weaken the argument. If anything, this makes the economist's concern about capital flight seem more justified, which would tend to strengthen rather than weaken the recommendation.

    1% picked this

  4. In countries other than the

    Weaker Impact

    This answer notes that similar laws in other countries have not "entirely prevented" the removal of overseas capital. While this suggests the laws might not be fully effective, it does not tell us they were wholly ineffective either. The laws might have prevented most capital removal while failing to stop all of it, which would still make them a useful policy. "Not entirely prevented" leaves open the possibility that the laws prevented a significant amount of capital removal. The correct answer provides a much stronger and clearer reason to reject the policy — it does not merely suggest partial ineffectiveness but shows the policy would actively backfire.

    14% picked this

  5. Two years ago, the country

    Unclear Impact

    This answer states that two years ago, the country enacted some restrictions on overseas capital removal. But we have no information about the effects of those laws. Were they helpful? Harmful? Neutral? Did they deter new investment? Did they prevent capital flight? This answer provides a bare fact without any indication of its consequences. It could potentially strengthen the argument (if the existing restrictions helped), weaken it (if they backfired), or have no effect at all (if they were insignificant). Without knowing the outcome, this answer's directional impact is completely indeterminate.

    1% picked this

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