QUESTION TEXT: Economist: No economic system that is centrally…
QUESTION TYPE: Flawed Parallel Reasoning
CONCLUSION: Centrally planned economies have debt that amounts to at least 5% of their GDP.
REASONING: Central planning leads to inefficient allocation of resources. Getting a low debt requires efficient allocation of resources.
ANALYSIS: This is one of the rare logical reasoning questions that’s useful to diagram.
Low debt ➞ efficient allocation ➞ no central planning
central planning ➞ inefficient planning ➞ higher debt
It’s a good argument. It takes the first premise and combines it with the contrapositive of the second premise (low debt ➞ efficient allocation becomes “inefficient allocation ➞ higher debt”)
___________
- This is a good argument, but it doesn’t take the contrapositive of one of the premises.
- CORRECT. We get: rural districts ➞ no large concentration of automobiles ➞ no pollution.
I had to take the contrapositive of this statement to make that connection: “pollution ➞ large concentration of automobiles”
- This is a bad argument. Maybe ungulates are among the rare herbivores that often attack humans.
- All rock stars that own companies get company pay, but the stimulus doesn’t say they get larger royalties for owning a company. They seem to only get regular royalties.
- This is a bad argument. It’s the people who trade on inside information who can’t be unknown. But maybe some mutual fund managers are unknown.
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