#7 - Economist: Owing to global economic forces since 1945

[Jeremy Press]

Complete Question Explanation

Strengthen, CE. The correct answer choice is C.

Although the question stem asks the test-taker to "explain" something in the stimulus, this question is best understood as a Strengthen question, rather than a Resolve the Paradox question. That is in part because the claim we're being asked to "explain" is the conclusion of an (economist's) argument in the stimulus, thus the answer will provide additional support for (i.e. strengthen) that conclusion. It is also because there is no true "paradox" in the situation described in the stimulus.

The stimulus exhibits the "missing link" form of argument often seen in Strengthen, Justify, and Assumption questions. The conclusion of the economist's argument introduces (for the first time in the argument) the issue of international trade. This "new information" must be tied back to the premises. In other words, we're looking for a causal link between there being a greater amount of "service" work in the economist's country's economy, and the reduction in international trade in that economy. An answer choice that supplies such a link will help to explain the conclusion. Alternately, an answer that supplies a causal link between reduction in manufacturing employment (also mentioned in the premises) and reduction in international trade could also suffice.

Answer Choice (A): This is a Weaken answer. If international trade agreements normally include a service component, then it's harder to understand why an increase in a country's service economy would lead to a decrease in that country's level of international trade.

Answer Choice (B): In this "missing link" question, we need a connection between the premises and the "new information" about international trade in the conclusion. Answer choice B provides no connection between the "specialized skills" it refers to and the level of international trade. Hence, it is irrelevant to explaining the conclusion, and incorrect.

Answer Choice (C): This is the correct answer choice. Answer choice C shows how a rise in a country's service economy could lead to a decline in international trade, thus supplying the "missing link" we're search for between the premises and the conclusion. If the services rendered in a service economy are provided in person, and thus "tend to be local," there is no need for international trade to supply such services, explaining why the country's service-oriented economy has resulted in less international trade.

Answer Choice (D): In this "missing link" question, we need a connection between the premises and the "new information" about international trade in the conclusion. Answer choice D provides no connection between the "factory automation" it refers to and the level of international trade. We would need additional information that automation somehow affects international trade in order for this answer to be relevant to explain the economist's conclusion.

Answer Choice (E): This is a subtle form of Weaken answer. Remember that we're trying to explain why international trade decreased specifically in the economist's country. If the economist's country could procure some services more cheaply from other countries, that would give a reason for that country to increase its level of international trade (going to those countries for such services, rather than itself).

[mcioci]

Hello Powerscore,

I was wondering if someone could provide some clarification regarding this question. I think I may not be completely understanding the stimulus but how are we supposed to know that the country the economist is talking about engaged in trade of manufactured goods to begin with or any trade of that matter? I went with A because that filled in the gap that I was looking for. If this country did in fact engage in trade of manufactured goods as A says and combined with the premise that manufacturing employs an ever smaller fraction of the workforce, I think this definitely strengthens the argument.

I had C as a contender but if this particular country did not trade with other countries, then how could C have any impact on the argument? Had the stimulus provided that this country did trade manufactured goods, then I definitely see how this strengthens the argument. I must be attacking this stimulus incorrectly so I would greatly appreciate if someone could show me where I went wrong.

Thanks,
Michael

[Francis O'Rourke]

We know that the country once engaged in trade when the author states "Hence, we are engaged in less and less international trade." In order to be engaged in less trade today, we must have been engaged in (more) trade in the past. The economist never explains how much of that trade was in manufactured goods and how much was in service industries.

Answer choice (A) discusses the effects of trade agreements. The stimulus does not tell us whether the country in question has signed any trade agreements at any point, so this topic is out of scope.

Answer choice (C) helps explain the decreasing international trade. If our economy is abandoning manufacturing in favor of service business, and service businesses are more local than manufacturing, then we can expect a lower proportion of businesses in the country to engage in international trade.

Let me know if this helps!

[pardis]

I'm having an unusually hard time with this problem and it may be stemming from my (mis)understanding of the stimulus.

Here's what I understand:

The ratio of service to manufacturing economy of a certain country has increased

The fraction of the workforce within the manufacturing sector of this economy has decreased

Therefore this country is engaged in less international trade

I don't understand why (C) is correct because although it accounts for why less manufactured goods are exported, it does not explain why the country can get away with not importing goods from other countries. If a country is manufacturing less, then it must import the items it is not manufacturing!

In my opinion, (D) does a better job of answering the question "why less is imported and also less is exported". Since (D) does not state that factory automation is unique to this country alone, and so if all of the countries can now take advantage of factory automation the need for international trade (both import and export) is diminished.

[James Finch]

Hi Pardis,

It sounds like you understand the stimulus correctly. This is a Strengthen question, but because of the way the stimulus is setup with new information in the conclusion that doesn't directly relate back to the premises, we can use the same mechanistic method as if it were a Justify question: we link the new information in the conclusion back to one or more of the premises.

Here, we have causal reasoning, with an effect (less int'l trade) and two potential causes as premises (more service work or less manufacturing), with nothing to explicitly tie them together. So our job will be find the answer choice that makes either having an increasingly service oriented economy or less of a manufacturing the cause of engaging in less international trade.

Answer choice (C) does this by tying service work to local markets, as opposed to international ones. This allows us to infer that most of the new service work is local and that local service work is displacing other economic activities that might be more internationally oriented. As far as Strengthen answers go, this isn't particularly strong, but it does make it more likely that the country in question is engaging in less international trade.

Answer choice (D) is irrelevant to the argument, as it doesn't tie service work or manufacturing to international trade, which is what we have to do to strengthen the argument. It sounds like you made an assumption that automation changes the proportion of manufacturing output that is exported, but this isn't an inference that follows logically from what we've been given in either the stimulus or the answer choice.

Hope this helps!

[pardis]

Hi James,

I'm a bit confused. I thought question is to be treated as a resolve the paradox type of question. Why are we treating it like a strengthen question? am I missing something?

thanks! and sorry in advance if this is a dumb question!

[Jonathan Evans]

Hi, Pardis!

Great question! The question stem is formulated like a Resolve the Paradox question, but notice what's happening in the question stem. Instead of asking what would "resolve the apparent paradox above" or something to that effect, the question asks what would explain the "decreasing engagement in trade." In other words, the question as formulated gives you a situation to explain, one that is only partially explained by the premises contained in the stimulus. There is no paradox here in particular, only a set of premises (shift from manufacturing to service) that don't really connect with the conclusion ("hence, there's a decrease in trade"). Despite the funky wording, this question operates as a Strengthen question: you have to find some additional evidence to connect the premises with the conclusion.

I hope this helps!

[mallie]

Hi,

I understand why the answer is C, but I just wanted to go over why E is wrong. This is how I understood the argument:

Conclusion: Economist's country has engaged in less and less international trade.
Premise: the economy is increasingly service based, meaning manufacturing is taking up a smaller portion of the workforce.

I actually thought that this was a resolve question when I first did this question, but I saw in previous posts that is a strength question. My prephrase regardless would be something along the lines of services don't translate to international trade/they typically operate locally.

Again, I see why C is right - when I first read it I thought it was the answer - but E threw me for a loop because I see them as being pretty similar. E talks about costs of services in an attempt to explain how having a service based economy would lead to a decrease in international trade i.e., if a country can get the same service for less money, that would be incentive to ditch the Economist's country and go with the cheaper option. Because this is a family 2 question and outside information is allowed, I am struggling to see why we can't use E.

Thanks!

[Jeremy Press]

Hi mallie,

Check out the question explanation I have posted at the top of this thread, and let us know if that resolves your question about answer choice E--thanks!

Jeremy