Economist: Our economy's weakness is the direct result of consumers' continued reluctance to spend, which in turn is...

Deniann on November 11, 2013

Question

Can someone please explain this?

1 Reply

Mehran on November 16, 2013

The conclusion of this argument is the last sentence, i.e. "Thus, even though it is not a perfect solution, if the government were to lower income taxes, the economy would improve." And how do we know this? Well the economy's weakness is the direct result of consumers' continued reluctance to spend, which is exacerbated by the fact that the average income is significantly lower than it was five years ago.

Here we are presented with a Strengthen with a Necessary Premise question. Remember that a premise is said to be necessary for a conclusion if the non-existence of the premise guarantees the non-existence of the conclusion. That means when our correct answer is negated, it will make our argument fall apart.

(A) is not the correct answer because while it seems to somewhat strengthen the argument, it does not make the argument fall apart when negated. Let's negate: "Increasing consumer spending will not cause prices for goods and services to decrease." Notice that this does not make our conclusion, i.e. "if the government were to lower income taxes, the economy would improve," fall apart.

(B) is incorrect because it does not strengthen the argument. We do not know if consumer spending is actually going to increase if the government were to lower income taxes. When it is negated it also does not make the argument fall apart. Let's negate: "If consumer spending increases, the average income will not increase."

(C) is not the correct answer because while it seems to strengthen the argument by pointing out that if the government were not to lower taxes, consumers' wages would decline even further, it is not necessary to the argument. To see, let's negate the statement: "If income taxes are not lowered, consumers' wages will not decline even further." So what? As long as consumer spending still increased, the argument would still be valid.

(D) is CORRECT because it clearly strengthens the argument by tying the idea of lowering income taxes with consumers spending more money. As long as this answer choice is necessary to the argument, it would be the correct answer. So let's negate to make sure: "Consumers will not be less reluctant to spend money if income taxes are lowered." If consumers will not be less reluctant to spend money if income taxes are lowered, then lowering income taxes will not help the economy improve since consumers will not be less reluctant to spend. Thus, the negation of (D) causes the entire argument to fall apart. That means that this assumption is required by the economist's argument so it would be the correct answer.

(E) is incorrect because it is completely irrelevant. We do not care about government spending. We care about what is causing our economy's weakness, which is "the direct result of consumers' reluctance to spend." Let's negate anyway just for practice: "Lowering income taxes will have an effect on government spending." Great...so what?

Please keep in mind that Strengthen with Necessary questions are a type of Strengthen question so the first step is to ask yourself whether the answer choice strengthens the argument. If it doesn't, there is no need to negate it. Only when an answer choice strengthens, would you negate it to make sure that it is also necessary to the argument.

I hope this was helpful! Please let us know if you have any other questions.