SC - Capital Reserves

[Ben]

The recent decline in the employment rate was spurred by predictions of slow economic growth in the coming year. However, those predictions would not have affected the employment rate if it had not been for the lack of capital reserves of major industries. So if major industries increase their capital reserves, the employment rate will not decline in the future.

Which of the following, if true, casts the most doubt on the validity of the argument above?

A) Major industry foresaw the drop in employment.
B) Some major industries had appreciable capital reserves.
C) An increase in labor costs could adversely affect the employment rate.
D) The government could pass legislation mandating that major industries set aside a fixed amount as capital reserves every year.
E) The drop in the employment rate was more severe this year than last.

My answer: B
OA: C

Conclusion: "if major industries increase their capital reserves --> the employment rate will not decline in the future."

I view this as: Cause --> Effect.

How can GMAT ask to weaken the conclusion? Is it to:
1. Make the cause incorrect? (make me choose B)
2. alternative causes to create the effect, as choice C (similar to assumption type 3: using alternative paths)

Thank you,

[rfernandez]

It's true that the cause may be weakened by striking down an assumption upon which that cause is based. It's also true that new information can be provided that, as you put it, gives an alternate path to the same effect -- in other words it provides another cause for the effect.

Choice C clearly does the latter by introducing the effect of increased labor costs on the employment rate, making it a weakener.

Choice B, however, does not invalidate the conclusion's cause, as you put it. Even if *some* industries had some reserves, it could still be argued that an increase in capital reserves would prevent a decline in the employment rate.

It's a subtle point to make, and it would be fair to label B with a small "w" perhaps in your s-w-slash chart, but C's impact on the argument is stronger, meriting a big "W".

[cmtorres]

When I took the CAT I also answered B. Here is another explanation, in my own words:

B is incorrect because even if some major industries had appreciable capital reserves, that doesn't negate that an increase in their reserves would stop the fall in employment. Also, MOST of the major industries may still have zero capital reserves. Therefore, the argument still holds strongly.

C is correct because it identifies the possibility of another, alternative explanation for the decrease in employment. The argument does not consider any other factors in the decrease in employment. C states that increasing labor costs could also bring down employment. Therefore even if capital reserves are increased, labor costs could counteract any strengthening of employment.

[tim]

Thanks, cmtorres..