Multiple choice

Directions: The following passage is followed by a question with five options. Choose the best option.

The recent decline in the value of rupee was triggered by a prediction of slower economic growth in the coming year. This prediction would not have adversely affected the rupee but for the government's huge budget deficit. Budget deficit should, therefore, be decreased to prevent future currency declines.

Which of the following, if true, would most seriously weaken the conclusion about how to prevent future currency declines?

  1. The government has made little attempt to reduce the budget deficit.

  2. The budget deficit has not caused a slowdown in economic growth.

  3. The value of rupee declined several times in the year prior to the recent prediction of slower economic growth.

  4. Before there was a large budget deficit, predictions of slower economic growth had frequently caused decline in rupee value.

  5. Similar predictions of slower economic growth in a previous year did not result in currency decline.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The argument assumes that a particular prediction can cause a currency decline only if accompanied by a large budget deficit. Since (4) states that this prediction can cause a currency decline without a large budget deficit, it is the best answer.

Keep practicing — related questions