Friday, March 2, 2007

CR Question - 39

39). The media claim that the economy is entering a phase of growth and prosperity. They point to lower unemployment rates and increased productivity. Their analysis is false, though. The number of people filing for bankruptcy has increased every month for the last six months and bankruptcy lawyers report that they are busier than they have been in years.

Which of the following is an assumption on which the argument depends?

A. Unemployment rates are not useful indicators of growth and prosperity.
B. Economic growth cannot be measured in terms of productivity.
C. Legislation has not been recently passed to make legal bankruptcy easier to obtain.
D. There has not been an increase in the number of bankruptcy lawyers.
E. The media often misrepresent the current state of economic affairs.

OA and OE : From MGMAT CAT1

OE: The conclusion of the argument is that the media are wrong in saying that the economy is entering a phase of growth and prosperity. The basis for that claim is that the number of people filing for bankruptcy has increased every month for the last six months and that bankruptcy lawyers are busier than they have been in years. In order for this argument to be valid, however, the author has to assume that the increase in the number of bankruptcies is a result of the state of the economy and not the result of something unrelated.

(A) This does not have to be true for the claim that the media are wrong about the economy to hold. It is possible that unemployment rates are useful indicators of growth and prosperity and that media is still wrong about the economy (i.e. if there are other indicators that show problems in other areas).

(B) This does not have to be true for the claim that the media are wrong about the economy to hold. It is possible that productivity is a good measure of economic growth and that media is still wrong about the economy (i.e. if there are other indicators that show problems in other areas).

(C) CORRECT. This has to be true for the claim that the media are wrong about the economy to hold. If legislation has recently been passed that makes it easier to obtain bankruptcy, this would explain away the counterevidence to the media's argument. The increased number of bankruptcies could have been the result of the easier process rather than of a poor economy.

(D) This does not have to be true for the claim that the media are wrong about the economy to hold. An increase in the number of bankruptcy lawyers would not explain the increase in the number of bankruptcy filings.

(E) This does not have to be true for the claim that the media are wrong about the economy to hold. Even if the media did not often misrepresent the current state of economic affairs, the argument that the media are wrong might still hold.

The correct answer is C.