24-14: In 1983 Argonia’s currency, the argon, underwent a reduction in value relative to the world’s strongest currencies. This reduction resulted in a significant increase in Argonia’s exports over 1982 levels. In 1987 a similar reduction in the value of the argon led to another increase in Argonia’s exports. Faced with the need to increase exports yet again, Argonia’s finance minister has proposed another reduction in the value of the argon.
Which of the following, if true, most strongly supports the prediction that the finance minister’s plan will not result in a significant increase in Argonia’s exports next year?
A) The value of the argon rose sharply last year against the world’s strongest currencies.
B) In 1988 the argon lost a small amount of its value, and Argonians exports rose slightly in 1989.
C) The value of Argonia’s exports was lower last year than it was the year before.
D) All of Argonia’s export products are made by factories that were operating at full capacity last year, and new factories would take years to build.
E) Reductions in the value of the argon have almost always led to significant reductions in the amount of goods and services that Argonians purchase from abroad.
answer is D, however obviously there is a gap between the statements of option D and the argument of the question. No evidence establishes that all of Argonia’s export has already reach its peak so that no additional marginal export can be gained through the currency reduction.
Let us consider this case, there are many export productions in the stocks of the factories which operate at the full capacity. Therefore the currency reduction truely can increase the export.
Please give me some help, I really can not figure out the correct answer.
In my opinion, the Best choice should be A. If the currency has already reached such a high level that a little reduction may not eventually stimulate the export.
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