If a country's manufacturing capacity is fully utilized, there can be no industrial growth without new capital invest...

jaberges December 10, 2020

Confused on video answer

Hello, even after watching the video, I am still confused about how the answer choice was chosen. The video seems to connect the statements "lower IR ---> NCI" "IG--->NCI" but I am still not sure how they can be connected because "NCI" is the necessary condition in both cases. I don't understand how lower interest rates might create industrial growth as lower interest rates only mean new capital investment and NCI is a necessary condition for IG, so we cannot assume it causes IG.

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ohanamgt January 3, 2021

How are we supposed to know that the "if" in the first sentence means it is an "overarching" principle? Because I tried to diagram MCFU and of course didn't know what to do with the second part of the sentence.

shunhe January 7, 2021

Hi @jaberges,

Thanks for the question! So the issue is that we’re not actually connecting the two statements. Remember, a “precondition” would be the necessary condition, since the necessary condition is “necessarily” true if the sufficient condition is true. So all (B) says is that RIR would lead to a necessary condition, which is true based on your diagram .

Hope this helps! Feel free to ask any other questions that you might have.