The media claim that the economy is entering a phase

by **barlie** Tue Aug 28, 2007 2:39 pm

Code: Select All Code: The media claim that the economy is entering a phase of growth and prosperity. They point to lower unemployment rates and increased productivity. This 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? Unemployment rates are not useful indicators of growth and prosperity. Economic growth cannot be measured in terms of productivity. Legislation has not been recently passed to make legal bankruptcy easier to obtain. There has not been an increase in the number of bankruptcy lawyers. The media often misrepresent the current state of economic affairs.

The correct answer listed is (C) CORRECT. This has to be true for the conclusion to hold. If legislation has recently been passed that makes it easier to obtain bankruptcy, then the evidence cited would be less relevant. The increased number of bankruptcies could have been the result of the easier process rather than of a poor economy.

What ? :?:

Let me see if I understand this.
Premise : economy is entering a phase of growth and prosperity .... as demonstrated by lower unemployment rates and increased productivity
Conclusion : its false because..
Premise : number of people filing for bankruptcy has increased every month for the last six months,
premise : bankruptcy lawyers report that they are busier than they have been in years.

The author is refuting the original premise by pointing to bankrputcy filings as the indicators of the economic condition. The basis for the argument is that (A) Unemployment rates are not useful indicators of growth and prosperity. Further there is no indication of (c) as being the assumption for the argument.

:?: Why am I wrong here ?

by **StaceyKoprince** Tue Aug 28, 2007 10:13 pm

Hi, again, please remember to cite the source / author; we need this info posted for copyright reasons before we can respond!

by **barlie** Tue Aug 28, 2007 10:19 pm

source : manhattan gmat cat test

by **StaceyKoprince** Wed Aug 29, 2007 12:17 am

Watch out for extreme answers. One valid assumption might be that bankruptcy filings are a more useful indicator than unemployment rates, given that the author clearly weighs the bankruptcy evidence more heavily than the unemployment evidence. The author doesn't have to assume that unemployment rates are not useful at all - just that they are not as useful / relevant as the bankruptcy data.

by **selvakumar.jeyakumar** Sat Sep 26, 2009 6:22 pm

Agreed it is "C"

by **RonPurewal** Wed Nov 04, 2009 8:59 pm

selvakumar.jeyakumar Wrote:I think this one is wrong..the reason is if "C" is true then it is weakning the argument..

are you sure you didn't miss the "not" in choice (c)?

choice (c) says that legislation making it easier to declare bankruptcy has NOT been passed.

the OPPOSITE of this statement - the legislation HAS been passed - would weaken the argument, by providing an alternate explanation for the increased filings (independent of the economy).

--

by the way, this is another useful technique for detecting correct assumptions (called the "least extreme negation method" in our strategy guide): if you REVERSE the assumption, the argument should be DESTROYED.
that is precisely what happens with (c).

by **akhpad** Thu Oct 06, 2011 3:16 am

I convinced from answer option C but I could not understand why A and B are wrong.

I confused about A and B.

Please explain something different from OE.

by **jnelson0612** Sat Oct 29, 2011 11:33 pm

akhpad Wrote:I convinced from answer option C but I could not understand why A and B are wrong.

I confused about A and B.

Please explain something different from OE.

Please see this link for an explanation about answer A: the-media-claim-that-the-economy-is-entering-a-phase-of-t10898.html

Let me ask you to tell me more about what attracts you to answer choice B. What about that answer makes you think that it MUST be true for the conclusion to stand? Remember, assumptions are necessary parts of the argument and must be true for the conclusion to be drawn. Here the conclusion is that the economy is not necessarily growing and the belief that it is growing is incorrect. How does knowing that economic growth cannot be measured in productivity help us know that the economy is not growing? Just curious about your thought process so I can help you further.

by **unspokenhermit** Fri Dec 09, 2011 6:33 am

Answer option C seems to be correct. As someone said C definitely weakens the argument if true.

Well someone else was concerned about the copyright of the info posted therefore have to think before replying something.
___________________
Curtain Rods Hardware

by **jnelson0612** Fri Dec 16, 2011 11:14 pm

C is in fact correct.

by **johnnyman2386** Sun Jan 22, 2012 6:51 pm

You know, the media claims a lot of things. I think it's just a way to manipulate the Real Estate market and control people's investments on property or housing.

Whether you want to buy a home to live in or invest, what really matters is your own search and data. For example, I know people who buy a lot of property and buildings during hard economic times.

But they rent out the properties they rent. Although, it might be a market not good for buying, there is always a group of people in need of housing.

After all, the people who go on bankruptcy and move out a house because they can't afford it have to move in somewhere else anyway, right?

And that's were real estate investors come in. They buy in rough times and rent to people (who always need place to live) and earn great income even during hard times.

by **tim** Thu Feb 02, 2012 8:17 pm

okay....

by **hafiz.karim** Tue Nov 13, 2012 3:01 am

I was reading explanations of this problem. While (C) made sense, something about (C) wasn't write. I couldnt put a finger to it until now.

Let me summarize the argument

Tom : Dude, the economy is entering a phase of growth and prosperity.Just Look at the lower unemployment
rates and increased productivity.

Jake : You know what, i dont care about lower unemployment and increased productivity. What i do care is about is the bankruptcy indicator. Now this indicator is da bomb.

The assumption that Jake has made is that bankruptcy indicator is a more important indicator than lower unemployment rates and increased productivity.

Now if the unemployment and increased productivity indicators were accurate measure of growth, then it would matter if the bankruptcy rates were rising or falling.

I invite the MGMAT experts to comment on my views

by **tim** Wed Nov 14, 2012 12:22 am

you have offered a second assumption that doesn't appear in one of the answer choices. you have done nothing to explain why C is wrong..

by **harika.apu** Thu Aug 27, 2015 2:02 pm

tim Wrote:you have offered a second assumption that doesn't appear in one of the answer choices. you have done nothing to explain why C is wrong..

Hello Tim ,
As far as option A and B are considered.
the argument shows some evidence about bankruptcies to get to the conclusion that "economy is not entering growth phase".
So assumption must tie something from evidence about bankruptcies to conclusion drawn .
However , if just the conclusion is giving without evidence regarding bankruptcies may be some assumption that "unemployment rates are not reliable indicators " would be true.
Am i correct in this interpretation?