Q15 - During the recent economic downturn,

[r1r200]

I got this question right, but now that I am looking it over why can't it be answer D?

[ManhattanPrepLSAT1]

I can see why answer choice (D) is tempting. But if you compare it to the first sentence. Isn't answer choice (D) the exact opposite of what is stated.

How could it be true that "no economic downturn is accompanied by a decrease in the amount of money loaned out by banks" and at the same time "during the recent economic downturn, banks contributed to the decline by loaning less money?"

I think you can see that answer choice (D) is not an assumption of the argument, but rather something that would challenge the argument.

The argument concludes that if the standards are relaxed, banks would lend more money. But that may only be true if they have the money to lend. Answer choice (A) is needed in order for the conclusion to follow. If we negate answer choice (A), it would state that the economic downturn did cause a significant decrease in the total amount of money on deposit with banks. If that were the case, maybe the banks wouldn't be able to lend more money, even if the standards were relaxed.

(B) is irrelevant. The conclusion is not what caused the downturn, but rather whether the banks will lend money if the standards are relaxed.
(C) is irrelevant. Arbitrary or not, what would happen if the standards were relaxed?
(D) contradicts the first sentence, so can't be an assumption of the argument.
(E) is irrelevant. The conclusion is not about the effects of the downturn, but rather whether banks will lend out more money if the standards are relaxed.

Does that clear this one up for you? I'm sure that answer choice (D) just looked relevant, whereas many of the other answer choices were not. And this probably led to the confusion. Let me know if you still need more help with this one!

[secretad22]

I am having trouble with this question.

If you negate choice (A) you get:

The downturn did cause a significant decrease in the total amount of money on deposit with banks which is the source of funds for banks to lend.

Does that destroy the conclusion of this argument?

The conclusion is: if standards are relaxed ---> banks will lend more money.

My thoughts: Even if the downturn caused a significant decrease in the total amount of money on deposit with banks, couldn't the banks still loan more money?

I think a necessary assumption is that the downturn did not cause a complete depletion of deposit bank money. However, a significant decrease of deposit money does not necessarily affect banks lending more money.

[ManhattanPrepLSAT1]

My thoughts: Even if the downturn caused a significant decrease in the total amount of money on deposit with banks, couldn't the banks still loan more money?

Sorry to just be getting to your question now... If there was a significant decrease in the total amount of money on deposit, you're correct, it's not impossible for there still to be an increase in lending on the part of the banks. But it does call into question the ability of the banks to be able to do so. There would be a dark cloud over the conclusion reached in the argument.

I know sometimes it feels like we have to be really strict with language sometimes and then very relaxed at others. And sometimes it feels hard to know when to be strict and when not to be. The rule of thumb I follow, is early in the LR section I stay relaxed with language, and only tighten up when I have more than one contending answer choice. Towards the end of the section, I start a bit tight with the language, and only relax if I end up eliminating all the answers.

Hope that helps!

[syousif3]

I got this question right by process of elimination. none of the other answers seem to be the assumption. However, I dont quite understand how it is the assumption.

Does the author mean that the recent economic downturn and the loaning less money happened at the same time and not the recent economic downturn causing a significant decrease in lending money?

And so if the standards are relaxed banks would be able to lend more money even if it's an economic downturn?

[sch6les]

The argument seems simple:
Tighter standards are correlated with less lending.
Therefore, relaxed standard are correlated with more lending.

I want to follow on secretad22's point. The conclusion can still follow even if (A) is negated - that is, even if there is a significant decrease in the total amount of money that the banks could lend out.

Let's say that, before the standard was tightened, the banks were loaning $50, out of $50 they had available to lend. After the standard was tightened, they were loaning $5 out of $50 they had available to lend. Then, there was a decrease in the total amount of money they had available to lend by 80%, to $10. When the standard is relaxed, the banks can now loan up to $10, which is more than the $5 they were lending previously, despite the fact that there was a 'significant' (I'd say an 80% cut is significant) decrease in the total amount of money that the banks could lend out.

I'd guess the way to make the question work is to note that the word 'significant' can vary quite widely in its definition.

[sukim764]

The argument seems simple:
Tighter standards are correlated with less lending.
Therefore, relaxed standard are correlated with more lending.

I want to follow on secretad22's point. The conclusion can still follow even if (A) is negated - that is, even if there is a significant decrease in the total amount of money that the banks could lend out.

Let's say that, before the standard was tightened, the banks were loaning $50, out of $50 they had available to lend. After the standard was tightened, they were loaning $5 out of $50 they had available to lend. Then, there was a decrease in the total amount of money they had available to lend by 80%, to $10. When the standard is relaxed, the banks can now loan up to $10, which is more than the $5 they were lending previously, despite the fact that there was a 'significant' (I'd say an 80% cut is significant) decrease in the total amount of money that the banks could lend out.

I'd guess the way to make the question work is to note that the word 'significant' can vary quite widely in its definition.

I think you're overlooking a critical element within this question. Firstly, the language of the conclusion suggests a causal relationship, rather than a correlation, between regulatory standards and the amount of money banks were able to loan. So the argument assumes that it was the tightening of the regulatory standards, not the economic downturn, which caused the banks to minimize their loaning capacity. Answer choice A, as one of the moderators has mentioned, addresses this causal relationship and eliminates an alternative cause for reduction in loans. I'm not sure if I follow your detailed example regarding answer choice A, or see the relevance of it. Simply, this question boils down to implied causal relationship.

[everythinginitsrightplace23]

could you explain how answer D is irrelevant to the argument? I can see how if it is assumed, then it contradicts the argument, but I am confused as to why it wouldn't weaken it as opposed to being irrelevant, which I take to mean out of scope?

[jaf51200]

The Manhattan 3rd edition logical reasoning book states that A is the correct answer choice b/c "it rules out a different explanation for why banks could not lend money during the economic downturn. Ruling out this reason makes it more likely that the reason was the tightened regulations."

I also choose A as my answer but for a different reason. My thought process was as follows:

Premise:Regulators standars for loan making by banks tightened before economic downturn, so banks loaned less money.

Conclusion: If regulatory standards are on loans are relaxed, then banks will loan more money.

Assumptions: 1) Banks have enough capital to loan more money
2) Banks want to loan more money
3) There are enough people who want these loans

So answer choice A, like one of the instructors above i think noted, removes the possibility that banks will be depleted of capital and therefore don't have a lot money to loan if the standards are relaxed.

I'm confused b/c there are two different explanations for why A is correct. The Manhattan book seems to use answer choice A as an assumption thats necessary for the arguments premise. That the argument assumes the loan regulations caused the banks to loan less money. And answer choice A eliminates one alternate possibility for why banks loaned less money. But doesn't mainly this strengthen the premise? Also which explanation is the correct one?

[WaltGrace1983]

I think you're overlooking a critical element within this question. Firstly, the language of the conclusion suggests a causal relationship, rather than a correlation, between regulatory standards and the amount of money banks were able to loan.

I think it is important to note here that no causal relationship is directly stated. Maybe the conclusion implies it but so what? The conclusion doesn't follow from the premises so this is kind of counterintuitive to our mission. We cannot ever use what the conclusion says as a logical reason to believe one thing or another. The conclusion of all assumption family questions is inherently flawed - that's the point!

Here is the way I saw this necessary assumption question.

Prior to the downturn, regulatory standards were tightened perhaps causing the banks to loan less money.
→
If those standards are relaxed, banks will lend more money

Let's analyze what this argument is saying. It is saying that banks loaned less money in the past but, now that a potential reason for them loaning less money will no longer be present, there is "clearly" a reason to believe that "banks will lend more money." That makes sense but there are some gaps.

1) Banks have enough capital to loan more money
2) Banks want to loan more money
3) There are enough people who want these loans

I really like the assumptions that you pointed out here. I think that these thought processes are pretty adequate for attacking this question. Namely though, this argument is assuming that the banks are in the financial position to be able to lend more money. If they are not in the financial position, then how could it be possible that they lend more money? It cannot. Thus, we need to assume that they have that money.

(A) is the answer that most adequately speaks to this assumption. Look at this negated:

"The downturn did cause a significant decrease in the total amount of money [in] the source of funds for banks to lend."

So does this completely destroy the argument? No. However, the negation test is often misunderstood. We are not trying to destroy the conclusion and make it completely impossible. We are trying to weaken the link between the premises and the conclusion, ultimately making it so that the conclusion doesn't follow from the premises. I also think that the word "significant" is meaningful here. No, "significant" does not mean "sufficient," but it surely means that it is something that has particular consequences.

(B) is, in my opinion, the tricky answer. However, one may to eliminate it is to simply revisit the scope. We are not concerned with the causes of the economic downturn. In fact, the economic downturn is not even that relevant to the argument other than putting it into a particular context. The important parts are talking about the regulatory standards.

(C) Similar to (B), we don't care why the regulatory standards were tightened. The point is that they were and we are using that as the basis of our conclusion.

could you explain how answer D is irrelevant to the argument? I can see how if it is assumed, then it contradicts the argument, but I am confused as to why it wouldn't weaken it as opposed to being irrelevant, which I take to mean out of scope?

I don't know if I would go as far to say that it is irrelevant to the argument but it certainly is not a necessary assumption. Look at how strong that language is: "no economic downturn..." This is way out of of the scope of the argument, which is talking about one specific economic downturn. In addition, as Matt has stated above, the premise clearly says that "during the recent economic downturn...banks loaned less money." This answer choice is saying that "There is not even one economic downturn that was accompanied by banks loaning less money." This is directly contradictory.

However, the economic downturn itself is not relevant to the core, and I think that is what people are saying when they deem it "irrelevant." The economic downturn doesn't matter for the premise-conclusion link.

(E) We don't care about the "effects of the downturn" and this is not remotely relevant to the core.

[cyt5015]

The stimulus states that "banks contributed to the decline by loaning less money." Would that be a causation statement? My understanding of this argument is that:
context: loaning less money helps to cause decline;
P1: before decline, regulatory standards were tightened.
P2: author assumes that tightening standards causes loaning less money.
The causation chain of this argument will be:
tightening standards-->loan less money-->decline
The argument focuses only on the first half chain by concluding that if no cause (tightening standard), then no result (loan less money).
Based on the above reasoning, I eliminated the wrong answers:
(B) irrelevant to the first half chain (core of the argument), and contradicts to the author's assumption that tightening causes decline (downturn).
(C) whether the reason is arbitrary is irrelevant
(D) irrelevant to the first half chain, and contradicts to the author's assumption that economic decline was accompanied by lending less money.
(E) irrelevant to the first half chain, and contradicts to the author's assumption that tightening causes decline, therefore if relaxation, the effect of decline would be compensated.

Can any expert examine my reasoning and let me know if it is reasonable? Thank you.

[maryadkins]

Your breakdown of the stimulus and identification of the assumption is very good!

As for your breakdown of the answer choices, I would not say that (B), (D) or (E) are "irrelevant" to the core. (B) and (E) are still talking about standards and causation so "irrelevant" isn't really applicable; they're just not saying the right thing ABOUT standards and the downturn. You're right that (D) contradicts, but when you say "the author's assumption that economic decline was accompanied by lending less money," that isn't an assumption, since we're actually told it. But yes, it DOES contradict what we're told!

[contropositive]

ugh I got this one wrong twice! First I picked D which during review I realized is contradicting the argument and then I picked B when I was stuck between B and A. Before hitting the answer choices, I realized the assumption here was that it was the tightening of the regulatory standards, not the economic downturn, which caused the banks to minimize their loaning capacity because without the strict standards they would loan more money. That's what I was looking for when I went into the answer choices. Now that I look at B it seems to me like its confusing what triggered loaning less money with downturn. It would have been correct if it said "loaning less money was not the cause of economic downturn?" which is what A is saying right?

when they confused the sentences together, which the sometimes do. it gets so tricky.

[maryadkins]

Yep.

[JimW371]

The conclusion is "if -tightened, then more money."

(D) is wrong, firstly, by introducing the concept of individual borrowers and businesses. Can they represent the whole borrowers? What about local governments? Thus, we know it is not necessary.

Then, even if individual borrowers and businesses are all the borrowers, (D) is still wrong because it means "if downturn, then no less money." Is it necessary? By negating it, we know some downturns have less money. So what? We care about this downturn, not other downturns. It weakens the argument but cannot negate the argument. Thus, it is not necessary.

Unlike (D), the negation of (A) means an absolute less money in this downturn, thus it is necessary.