The media claim that the economy is entering a phase of

[chitrangada.maitra]

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.

Answer: C

My question is - How can we rule out option A?
The explanation says: This statement does not have to be true for the claim that the media are wrong about the economy to hold. Even if unemployment rates are useful indicators of growth and prosperity, the media could still be wrong about the economy (e.g., if there are other indicators that show problems in other areas).

However, if 'growth and prosperity' are not the true indicators, the argument collapses. On the other hand, we can rule out option C on the ground that bankruptcy is not an accurate indicator of growth and prosperity so an increased number of bankruptcy does not really mean that the economy is not doing well.

Can someone please shed some light on this.

[gokul_nair1984]

The argument is that since the number of people filing for bankruptcy has increased and the lawyers who deal with bankruptcy related cases are kept busy, the economists claim that the economy is prospering is false.

The author has to assume that somehow it is not any easier for people to file for bankruptcy.

My question is - How can we rule out option A?
The explanation says: This statement does not have to be true for the claim that the media are wrong about the economy to hold. Even if unemployment rates are useful indicators of growth and prosperity, the media could still be wrong about the economy (e.g., if there are other indicators that show problems in other areas).

First of all (A) is extreme in nature.
More conspicuously,let us assume for a moment that "Unemployment rates are not useful indicators of growth and prosperity", is not true . The claim(economy is entering a phase of growth and prosperity is false) still holds good if more people file for bankruptcy as the process of filing for bankruptcy were to be simplified). Hence the economy is going down.

(A) could definitely be an assumption( but not an absolute necessity for the argument to hold good) but this is already outweighed by the fact that the bankruptcy filing process should not be made simpler.

If (C) were to be false, ie; obtaining legal bankruptcy is easier now, this means that this could be the reason for increased bankruptcy filings.The media is judging that the economy is going down by observing the increase in the number of filings.If (C) were to be false then this is the reason more people are filing for bankruptcy and this has nothing to do with the economy whatsoever.
Therefore, (C) has to be true.

[mschwrtz]

Very nice use of the negation test.

A couple of friendly amendements:

1) You write A could definitely be an assumption( but not an absolute necessity for the argument to hold good). Your earlier analysis suggests otherwise. If you can deny the claim and do no vioelnce to the argument, then the claim is not an assumption of the argument.

2) Excellent job on C, and to boil it down into words of one syllable, since negating C undermines the argument, C is an assumption. OK, those weren't all one-syllable.

3) C is also a classic assumption type; it eliminates an alternative explantion of the evidence. Because the conclusion, the economy is not really entering a phase of growth and prosperity, explains the evidence, there are more bankruptcies, the argument assumes that there is no other explanation of the evidence.

[amiwilson7]

You are absolutely right. It is very important to get information about the attorney that you are concerning because a good attorney has good and experienced lawyers with them that can be very helpful in winning a case.

[tim]

please do not post irrelevant information on our forums..

[garryrother]

Thanks Experts for your perennial help !

I opine a bit differently on this question. I think that the question is not coined appropriately. In the past, MGMAT experts have admitted that constructing a challenging CR problem is very difficult. And I whole-heartily agree with them.
The problem in question requires us to know that some individuals hold on to their bankruptcy plan if the process requires a lot of rigmarole. Hence, if legislation makes it easier to obtain legal bankruptcy then more individuals would be willing to apply for it(bankruptcy). Unfortunately, I was not aware of it. When I came across option C, I ruled it out since I always thought bankruptcy is a natural resorts to an entity(firm/individual) whose personal savings has taken a deep plunge or consumer debt has skyrocketed. But then I googled and found that easing of law is also one of the reasons why bankruptcy has increase multi-folds in the past 3 decades.
Now, my concern is that is this reason assumed to be known to general public(other students, guests feel free to chime in)? Can we expect something similar in the actual exam?

Experts(MGMAT staff), real thanks for all the hard-work that you put in to help us out to prepare for the exam. This is a great service :)

[tim]

i don't think you need to know anything about bankruptcy at all to answer this question. context is enough to indicate that bankruptcy is a negative thing, and that's all you need. consider: replace "bankruptcy" with "bad stuff" everywhere in the problem and answer choices, and you should still get to the correct answer..

[jacobs8891]

Well this is like a boon for all the bankruptcy attorneys. No one wants to get bankrupt but if the situation occurs, then there is only the alternative to contact a good expert.

[tim]

keep your spam off our boards!

[rte.sushil]

I have a question with option D, Please let me know what went wrong with my thinking:(

There has not been an increase in the number of bankruptcy lawyers.


Suppose the no. of lawyers have increased and it is mentioned that lawyers are busy than before , so all lawyers are busy in filling the bankruptcy which means that no. of fillings have increased indeed due to some factor.
or even if we assume that same lawyers are getting more filling of bankruptcy than before so it means that filling have increased in no. due to some factor.
Now filling have increased due to some factor and we don't know whether it is because of economic state (it may or may not be). After this , i am lost:(

so should i say that no. of fillings have increased and we cant conclude on what basis it increased. and we need to find out an option why the filling was increased ? and whether it was related with economy or some other factor,,,i am looking for an option in which i can say that filling was increased because of economy state not other factor.
please correct me.
i understood in parts but still didnt get it 100%


2.)
Is my understanding correct on negate technique for assumption questions?
We are looking for some option in which if we negate that option the conclusion will be fall apart and if will no longer be valid on the premises on which it was concluded.

[jnelson0612]

I have a question with option D, Please let me know what went wrong with my thinking:(

There has not been an increase in the number of bankruptcy lawyers.


Suppose the no. of lawyers have increased and it is mentioned that lawyers are busy than before , so all lawyers are busy in filling the bankruptcy which means that no. of fillings have increased indeed due to some factor.
or even if we assume that same lawyers are getting more filling of bankruptcy than before so it means that filling have increased in no. due to some factor.
Now filling have increased due to some factor and we don't know whether it is because of economic state (it may or may not be). After this , i am lost:(

so should i say that no. of fillings have increased and we cant conclude on what basis it increased. and we need to find out an option why the filling was increased ? and whether it was related with economy or some other factor,,,i am looking for an option in which i can say that filling was increased because of economy state not other factor.
please correct me.
i understood in parts but still didnt get it 100%


2.)
Is my understanding correct on negate technique for assumption questions?
We are looking for some option in which if we negate that option the conclusion will be fall apart and if will no longer be valid on the premises on which it was concluded.

Hi Sushil,
Let me address question 2 first. You are absolutely correct. :-)

Okay, for question 1, let's review the argument again:

Conclusion: The economy is NOT entering a phrase of growth and prosperity.
WHY?
Premise: The number of people filing for bankruptcy has increased and bankruptcy lawyers are busier than they have been in years.

What do we have to assume to get from the premise to the conclusion? That the increase in the number of people filing for bankruptcy is an accurate reflection of the economy and that there is not some other reason for this increase. You can see that answer choice C), if negated, gives us another reason why there is an increase in filings. This harms the conclusion.

With answer choice D, then yes, there is clearly a lot of bankruptcy activity. But this answer is not necessary to help us conclude that the economy is weak. This answer is compatible with the idea of an alternate explanation for the filings: people are filing not because of the economy but because the laws have changed. We need to show that this increase in bankruptcies is a meaningful indicator that the economy is not good. Answer C is superior because it takes away an alternate explanation for the bankruptcy activity.

Please let us know if we can help further. :-)

[rte.sushil]

wow great explanation!!you helped in forgathering my hither-thither understanding!!!

[tim]

:)

[Khush]

I marked the right answer C in the test. But, i am not able to understand the casual link in the argument.

The author concludes that " It is NOT true that the economy is entering a phase of growth and prosperity"

The author is basing this on the Evidence that "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"

Then why does the official explanation says "the author has to assume that the increase in the number of bankruptcies is a result of the state of the economy and not the result of something unrelated."

Does not this mean "the state of economy causes people to file bankruptcies in greater numbers" i.e. the conclusion causes the evidence?
However, in reality the conclusion follows from the cited evidence.

confused here.

[RonPurewal]

I marked the right answer C in the test. But, i am not able to understand the casual link in the argument.

The author concludes that " It is NOT true that the economy is entering a phase of growth and prosperity"

This is not "Bankruptcy filings cause a bad economy".
It's "Bankruptcy filings indicate a bad economy". You're taking a measurement of bankruptcy filings, and then using that as a proxy of whether the economy is bad.
If you can use X as a proxy of Y, then it's virtually always the case that the causation is the other way around"”i.e., that Y causes X.

I.e., I can use low T-cell count measurements as a way to indicate that a patient has AIDS... because AIDS causes low T-cell counts.