If a country's manufacturing capacity is fully utilized, there can be no industrial growth without new capital invest...
Maxzorn2September 8, 2020
Question about answer choice (C)
Even after watching the video explanation for this question, I am still confused as to the explanation why answer choice (C) is incorrect. Couldn't "underutilized" simply be a reversal of the first condition mentioned: "fully utilized"? Please advise.
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We know that if a country's manufacturing capacity is fully utilized, there can be no industrial growth without new capital investment.
Manufacturing capacity fully utilized AND No new capital investment --> No industrial growth Industrial growth --> Manufacturing capacity not fully utilized OR New capital investment
There are two issues with the way you've conceptualized this above:
1) Underutilized is not necessarily the reversal of fully utilized. Just because something is not fully utilized does not necessarily mean that it is underutilized.
2) We know nothing about the conditions in a country whose manufacturing capacity is underutilized.
Even if we take underutilized to be the reversal of fully utilized, this is the necessary condition in our contrapositive. We can't draw any conclusions based on the existence of the necessary condition alone.
This conclusion still does not work even if we try to combine it with the second conditional.
Reduction in interest rates --> New capital investment No new capital investment --> No reduction in interest rates
We can't draw any conclusions because we cannot make any transitive chains.
Therefore, we can't conclude anything about a country whose manufacturing capacity is underutilized.
Hope this helps clear things up a bit! Please let us know if you have any further questions.
