LSAT 17 | Section 3 | Logical Reasoning: Q1

LR Question 1 Explanation

QUESTION TEXT: If a country’s manufacturing capacity is fully utilized…

QUESTION TYPE: Must be True

FACTS:

1. If a country has utilized all of its manufacturing capacity there will be no growth unless
2. That country has new capital investment.
3. A reduction in interest rates will cause new capital investment.

ANALYSIS: New capital investment is a necessary condition for economic growth when capacity is used. It is not a sufficient condition.

___________

1. No. The stimulus clearly says that any reduction in rates will lead to capital investment.
2. CORRECT. Yes. The decline in rates will cause new capital investment. That is a precondition for industrial growth (a necessary condition) if manufacturing capacity is all used.
3. We have no idea what effect interest rates have when capacity is underutilized. It’s hard to say what we should do with them.
4. This isn’t necessarily true. We have no idea what effect rising interest rates has on capital investment. We only know what happens when rates are lowered.
5. We have no idea about this. Maybe even 50% utilization would be enough. We only know there can be no growth if all capacity is utilized.

Recap: The question begins with “If a country’s manufacturing capacity is fully utilized”. It is a Must be True question. Learn how to master LSAT MBT questions on the LSAT Logical Reasoning question types page.