Twelve years ago and again five years ago, there were extended periods when the Darfir Republic's currency, the pundra, was...
GMAT Critical Reasoning : (CR) Questions
Twelve years ago and again five years ago, there were extended periods when the Darfir Republic's currency, the pundra, was weak: its value was unusually low relative to the world's most stable currencies. Both times a weak pundra made Darfir's manufactured products a bargain on world markets, and Darfir's exports were up substantially. Now some politicians are saying that, in order to cause another similarly sized increase in exports, the government should allow the pundra to become weak again.
Which of the following, if true, provides the government with the strongest grounds to doubt that the politicians' recommendation, if followed, will achieve its aim?
Passage Analysis:
| Text from Passage | Analysis |
| Twelve years ago and again five years ago, there were extended periods when the Darfir Republic's currency, the pundra, was weak: its value was unusually low relative to the world's most stable currencies. |
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| Both times a weak pundra made Darfir's manufactured products a bargain on world markets, and Darfir's exports were up substantially. |
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| Now some politicians are saying that, in order to cause another similarly sized increase in exports, the government should allow the pundra to become weak again. |
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Argument Flow:
The argument starts with historical facts about two periods of weak currency, then shows the positive results that followed (increased exports), and finally presents the politicians' recommendation to repeat this strategy. The flow moves from past evidence to current policy proposal.
Main Conclusion:
The politicians believe the government should deliberately weaken the pundra currency to achieve another substantial increase in exports, just like what happened 12 and 5 years ago.
Logical Structure:
The politicians are using a simple pattern-based logic: since weak currency led to higher exports twice before, deliberately weakening the currency again should produce the same result. They're assuming the past cause-and-effect relationship will repeat itself under current conditions.
Prethinking:
Question type:
Weaken - We need to find information that would make the government doubt that weakening the pundra will achieve the same export increase as before
Precision of Claims
The politicians claim that deliberately weakening the pundra will cause 'another similarly sized increase in exports' - this is a specific quantitative prediction based on historical patterns
Strategy
Look for reasons why the same cause (weak pundra) might not produce the same effect (substantial export increase) this time around. We need to identify what might have changed since those previous periods that would break the historical pattern
This tells us about the politicians' consistency in making recommendations, but it doesn't provide any reason to doubt whether their strategy will work. The fact that they made the same recommendation before doesn't tell us anything about whether the economic conditions have changed or whether the strategy will be effective now. This is irrelevant to whether the recommendation will achieve its aim.
This directly undermines the politicians' plan. If Darfir's manufacturing sector is now operating at near-peak levels, then even if a weak pundra makes their products cheaper and increases foreign demand, they won't be able to significantly increase production to meet that demand. The previous export increases happened when there was presumably more manufacturing capacity available. Now, production capacity would be the limiting factor, not currency strength, so we can't expect the same substantial export increase.
This discusses general economic health conditions but doesn't specifically address whether weakening the pundra will increase exports. The politicians' goal is specifically about increasing exports, not overall economic health. This choice introduces irrelevant criteria about what makes an economy 'healthier' rather than addressing export capacity.
This information about competitors having stable currencies might actually support the politicians' plan rather than provide grounds to doubt it. If competitors have stable currencies and Darfir weakens theirs, Darfir's products would become relatively cheaper, potentially giving them a competitive advantage. This doesn't provide grounds to doubt the recommendation.
This presents an alternative method for making products competitive, but it doesn't provide grounds to doubt that weakening the currency would also work. The existence of another potential solution doesn't mean the politicians' recommendation won't achieve its aim. Both strategies could potentially work.