61. The recent decline in the value of the dollar was triggered by a prediction of slower economic growth in the coming year. But that prediction would not have adversely affected the dollar had it not been for the government’s huge budget deficit, which must 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? (A) The government has made little attempt to reduce the budget deficit. (B) The budget deficit has not caused a slowdown in economic growth. (C) The value of the dollar declined several times in the year prior to the recent prediction of slower economic growth. (D) Before there was a large budget deficit, predictions of slower economic growth frequently caused declines in the dollar’s value. D (E) When there is a large budget deficit, other events in addition to predictions of slower economic growth sometimes trigger declines in currency value.
61. The argument assumes that a particular predict can cause a currency decline only if accompanied by a large budget deficit. Since choice D states that this prediction can cause a currency decline without a large budget deficit, choice D is the best answer. That a method is not fully implemented does not imply that the method is ineffective. Thus, choice A is inappropriate. Since no slowdown in economic growth is asserted, what might cause such a slowdown is irrelevant. Thus, choice B is inappropriate. Since C supports the claim that a budget deficit is the underlying cause of the currency decline, C is inappropriate. Choice E is inappropriate because it supports the claim that a decrease in the budget deficit is necessary |