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interest rates

Expert replies

by yvichman » Sat Jan 24, 2009 1:58 am
Ronald: According to my analysis of the national economy, housing prices should not increase during the next six months unless interest rates drop significantly.
Mark: I disagree. One year ago, when interest rates last fell significantly, housing prices did not increase at all.
It can be inferred from the conversation above that Mark has interpreted Ronald’s statement to mean that
(A) housing prices will rise only if interest rates fall
(B) if interest rates fall, housing prices must rise
(C) interest rates and housing prices tend to rise and fall together
(D) interest rates are the only significant economic factor affecting housing prices
(E) interest rates are likely to fall significantly in the next six months

If the question said CAN'T increase it would be clear that B is the answer, however I'm not convinced and don't like this question :)
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by 4meonly » Mon Jan 26, 2009 12:25 pm
Ronald: According to my analysis of the national economy, housing prices should not increase during the next six months unless interest rates drop significantly.
Mark: I disagree. One year ago, when interest rates last fell significantly, housing prices did not increase at all.
It can be inferred from the conversation above that Mark has interpreted Ronald’s statement to mean that
(A) housing prices will rise only if interest rates fall
(B) if interest rates fall, housing prices must rise
(C) interest rates and housing prices tend to rise and fall together
(D) interest rates are the only significant economic factor affecting housing prices
(E) interest rates are likely to fall significantly in the next six months
Analyse the logic of the argument first.

Ronald: housing prices should not increase unless interest rates drop.
A should not happen unless B happens

Mark: I disagree. One year ago, when interest rates last fell significantly, housing prices did not increase at all.
B happened but A did not.

Ronald said that B is just one factor on triggering A but Mark thought that actually B causes A.

B clearly states this:
if interest rates fall, housing prices must rise
If B than A. Inverted logic doesnot work


Her is also one reasoning I found in internet:
(A) housing prices will rise only if interest rates fall : Mark does not counter Ronald by claiming that housing prices will increase only if interest rates fall : INCORRECT
(B) if interest rates fall, housing prices must rise : Ronald's claim for effect of interest rates on housing prices is valid on this particular occasion. Mark has generalized it to mean that it is valid for each occassion (in past or future): CORRECT
(C) interest rates and housing prices tend to rise and fall together : Ronald has not claimed any such thing. : INCORRECT
(D) interest rates are the only significant economic factor affecting housing prices : Again Ronald does not claim anything like this. : INCORRECT
(E) interest rates are likely to fall significantly in the next six months
: Not mentioned in argument. : INCORRECT
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by mason77 » Sat May 14, 2016 12:25 am
B looks better
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