Economist: Our country needs

Answer choices

1. A

   Out of Scope: diversify2% picked this

   To sustain its economy, the country needs to diversify its investments more evenly across

   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%
2. B

   Correct83% picked this

   Laws that would make it more difficult for overseas investors to remove their capital would strongly discourage them

   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%
3. C

   Premise Support1% picked this

   The historical periods during which the country’s economy had the highest rate of growth were those periods during which the amount of capital

   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%
4. D

   Weaker Impact14% picked this

   In countries other than the economist’s, passage of laws that made it very difficult for overseas investors to remove their capital have not entirely

   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%
5. E

   Unclear Impact1% picked this

   Two years ago, the country enacted laws that place some restrictions on the removal of

   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%