Economist: Many of my colleagues are arguing that interest rates should be further lowered in order to stimulate econ...

Ravi on December 31, 2018

@GLEE,

Great question. Before looking at why C is correct and why B is wrong,
let's take a look at the stimulus to make sure we have a firm grasp on
the argument and conclusion.

The economist begins by presenting his colleagues' argument: in order
to stimulate economic growth, interest rates should be further
lowered.

She then introduces her argument, stating that no such stimulation is
needed. Why? She supports this conclusion with the premise that the
economy is already growing at a sustainable rate.

She then adds that currently there is no other reason to lower
interest rates further, which is her main conclusion. (The other
conclusion in her argument is the subsidiary conclusion, which
supports her main conclusion).

That doesn't sound like a reasonable conclusion. She's told us that
lowering interest rates isn't needed to stimulate economic growth. In
telling us this, she has eliminated a single possible reason for
reducing interest rates. However, she then makes the conclusion that
there is no other reason to lower interest rates, which is far too
sweeping of a conclusion when she only eliminated one possible reason
for reducing interest rates. In order for this argument to make sense,
she must be assuming that there is no other reason for reducing
interest rates further. But what if there are other reasons for
reducing interest rates further? This is the flaw with her argument.

Now that we have a firm grasp of the argument, let's look at the answer choices.

Answer B is incorrect because the economist does not confuse economic
growth with what stimulates it. The economist's colleagues are arguing
for a further reduction in interest rates to stimulate the economy
more, but the economist is saying that no stimulation is needed
because the economy is growing at a sustainable rate. The economist is
not confusing economic growth with what stimulates it in stating this.
We can get rid of this answer.

Answer C says that the economist presumes that a need to stimulate
economic growth is the only possible reason to lower the interest
rates further. This is exactly what we identified as the flaw in the
economist's argument. The economist eliminates one possible reason for
reducing interest rates and concludes from the elimination of this
single reason that there is no reason at all for lowering interest
rates further. This is too far of a reach, which is why the argument
is flawed. C is our answer.

Does this make sense? Let us know if you have more questions!