LSAT 118 | Section 1 | Logical Reasoning: Q4

LR Question 4 Explanation

QUESTION TEXT: Columnist: Analysts argue that as baby boomers reach …

QUESTION TYPE: Method of Reasoning

CONCLUSION: The analysts are overly optimistic; boomers’ money is more likely to flow into investments other than stocks.

REASONING: If boomers consume less, corporate earnings will fall. If earnings fall, high stock prices won’t be justified.

ANALYSIS: There’s a lot going on here. The two things to keep track of are the analysts’ argument and the columnist’s argument.

The analysts argue: Boomers will save more. More money will flow into stocks. Stock prices will keep rising.

The columnist thinks they’re optimistic. If boomers consume less, corporate earnings will fall. If earnings fall, high stock prices won’t be justified. So boomers probably won’t put their money into stocks.

The columnist isn’t attacking the analysts’ premises. In fact, they seem willing to accept their starting point (that boomers will shift from consuming to saving).

The disagreement is what follows from that. They draw different conclusions about what more saving means.

___________

1. The columnist doesn’t dispute that boomers may start saving more. They disagree about the consequences.
2. It does say that analysts would benefit if their prediction were true, but that’s not the basis of the columnist’s argument. The “self-interest” comment is just a side remark.
3. CORRECT. The columnist largely accepts the analysts’ scenario but argues that it leads somewhere different.
4. The columnist does not think the analysts are basically right. Instead, they predict money will flow away from stocks. That’s a different conclusion.
5. They’re arguing for different conclusions, not the same one.