LR Question 15 Explanation
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.
More Resources for Flaw Questions
- Flaw drills: Use these to practice making examples of abstract flaws.
- Intro Course lesson: This intro course lesson covers Flaw questions.
- Mastery Seminar lesson: This LR Mastery seminar lesson covers flaw questions.
Hi Graeme.
I’m confused about the apparent conflict between the wording in the stimulus and the wording in the answer. The answer says the economist “presumes” that a need to stimulate economic growth is the only possible reason to lower interest rates, and his critique of his colleagues is therefore ill founded. He believes his colleagues are wrong to want to lower the interest rate to stimulate economic growth since the economy is already growing. But in the stimulus the only reason given for his colleagues wanting to lower the interest rate is to stimulate economic growth. So to me he’s not merely assuming this is the only reason for lowering interest rates; his critique seems to be valid since stimulating economic growth is the only reason given by his colleagues to lower interest rates. Maybe I’m reading too much into it, but is this not contradictory?
If the first sentence of the stimulus had left out “in order to stimulate economic growth” then the answer would make perfect sense, but it does not so I’m left feeling indignant over the answer.
Suppose I say: “I want to earn money to buy clothes”
And you say: “You have enough clothes to last a lifetime. So you don’t need money”.
That’s what the economist did. They assumed that the reason mentioned is the *only* reason to lower rates. Hope that helps!
Note: This is an old comment but I wanted to clarify the point.
I see your point, but to LSATMan’s point, you at least have to assume in the case of answer choice C that there are in fact other reasons to lower interest rates. That in itself requires some unsupported assumptions in the analysis. In the case of your clothing example, it’s much more “duh” than interest rates, but even then you still have to presume a whole set of possibilities.
I went with answer E, because the economists objection is on grounds that there already is sustainable growth. Logically, if the economist thinks that is the “goal” it would make sense that the econmist concluded that the sustainability would be at jeopardy if interest rates were lowered.
However E now looks wrong to me because of the use of “no reason” in the answer key, which matches the use of the qualifier “only” in answer C.
As a result > I think your clothing example probably needs to be modified with the second sentence saying “Therefore, there is no reason for you to want to earn money”.
It amounts to the same thing though. You could change my analogy to this and get the same result. It’s not crazy to assume there could be other reasons to lower interest rates. The economist hasn’t claimed that there’s only a single reason to lower rates, and it’s not reasonable to assume that there’s only one reason. Most things in life have multiple reasons.
—-
Person A: “You should work extra hours to earn money for clothes.”
Person : “I have enough clothes already, so currently there’s no reason to work extra hours.”
—–
As for E, the thing is: the economist *didn’t* conclude that growth would be unsustainable. You have to look at what they actually say, not what they might believe. The economist might well believe further growth would be unsustainable, but they also could believe it simply isn’t needed, and that there would be a downside to lowering interest rates. On flaw questions you have to make sure the answer truly matches what was said.
Hope that helps!