QUESTION TEXT: Economist: Many of my colleagues are arguing…
QUESTION TYPE: Flawed Reasoning
CONCLUSION: There’s no argument for lowering interest rates.
REASONING: One reason for lowering interest rates isn’t valid.
ANALYSIS: The economist has shown that we don’t need to lower interest rates in order to stimulate economic growth. The flaw is that the economist ignores other possible reasons for lowering interest rates.
For this argument to have been correct, the economist would have had to say “and there are no other reasons for lowering interest rates”.
- The economist didn’t cite any experts to support her argument. Instead, she disagreed with other expert economists.
- This didn’t happen.
Example of flaw: Lower interest rates can stimulate economic growth. Therefore, lower interest rates are economic growth. Any lowering of interest rates will always make us richer, and the country with the lowest rates will grow richest fastest.
- CORRECT. If there are other reasons to lower interest rates, then the economist’s argument is badly incomplete.
- The economist didn’t say that lower interest rates are the only way to stimulate economic growth.
- This is a tempting answer. But the economist didn’t say that lowering interest rates will push the economy into unsustainable growth. Instead, the economist merely argued that lower interest rates aren’t needed. They might believe that a further lowering of interest rates would have no effect, since the economy is already growing.
Free Logical Reasoning lesson
Get a free sample of the Logical Reasoning Mastery Seminar. Learn tips for solving LR questions