QUESTION TEXT: Economist: Our country needs as much capital…
QUESTION TYPE: Weaken
CONCLUSION: We should pass laws that make it more difficult for overseas investors to remove their capital.
REASONING: Our country needs as much capital as possible from overseas investors, and can’t afford any reduction in the capital they have already invested.
ANALYSIS: Here, the question has assumed that making it difficult for overseas investors to remove their capital will maintain or increase the amount of capital our country has. However, maybe investors don’t like being unable to remove their capital! If that’s true, then they will be less likely to invest further capital in our country. Because we need as much capital as possible, we should be incentivizing investing, not causing problems for people who invest. The likely answer is one that takes advantage of this problem in the reasoning.
___________
- Diversifying our investments sounds good, but the conclusion of the stimulus isn’t about our investments – it’s about investments in us!
- CORRECT. This weakens the conclusion by showing the unintended consequences. The proposed action would make investors less likely to invest their capital in us and ultimately might reduce our capital!
- This doesn’t weaken the argument. It only tells us about a correlation between prosperity and capital investments, but we already know that our country needs as much capital as we can get.
- You may have picked this thinking that it undermines the conclusion. If so, you are on the right track but took a wrong turn. The author’s goal isn’t to entirely prevent removal of capital. They want to increase the available capital by making it harder to remove. The correct answer shows that this isn’t the likely outcome.
- The author never claimed it was easy to remove invested capital, or that no laws already existed to make it harder. They want to make it comparatively more difficult than it currently is.
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