OG 11 CR #39 Inflation question

[Auzbee]

Last year the rate of inflation was 1.2 percent, but during the current year it has been 4 percent. We can conclude that inflation is on an upward trend and the rate will be still higher next year.

Which of the following, if true most seriously weakens the conclusion above?

A. The inflation figures were computed on the basis of a representative sample of economic data rather than all of the available data.
B. Last year a dip in oil prices brought inflation temporarily below its recent stable annual level of 4 percent.
C. Increases in the pay of some workers are tied to the level of inflation, and at an inflaction rate of 4 percent or above, these pay raises constitute a force causing further inflation.
D. The 1.2 percent rate of inflation last year represented a 10 year low.
E. Government intervention cannot affect the rate of inflation to any significant degree.

I would like to know what you guys think could be the right option and why? I have gone through the OG reasoning and it does not make sense to me (if you know the right answer).

[samirpandeyit62]

Auzbee,
I think it should be A

Conclusion: inflation is on an upward trend and the rate will be still higher next year.

Premise : Last year the rate of inflation was 1.2 percent, but during the current year it has been 4 percent.

Reasoning :

A. The inflation figures were computed on the basis of a representative sample of economic data rather than all of the available data.

If " inflation figures were computed on the basis of a representative sample of economic data rather than all of the available data" then this will apply to both the rates quoted i.e last yr & this yr (yr is not mentioned) so this directly questions the method to calculate the inflation rate which strongly weakens the only premise i.e now we cannot say that the premise is a fact i.e. 1.2% & 4% doesn't represent the entire economy, intetead a small sample of it.

B. Last year a dip in oil prices brought inflation temporarily below its recent stable annual level of 4 percent.

This supports the conclusion quoting that inflation has increased from last year.

C. Increases in the pay of some workers are tied to the level of inflation, and at an inflaction rate of 4 percent or above, these pay raises constitute a force causing further inflation.

This highlights one of the factor depending & subsequently resposible for increasing inflation, justify that inflation will increase and hence support the conclusion.

D. The 1.2 percent rate of inflation last year represented a 10 year low.

This says that last year the inflation was lowest in the last decade i.e 10 yrs before the current year, from this we cannot conclude abt current yr

E. Government intervention cannot affect the rate of inflation to any significant degree.

If this is true we can only interpret that increase/decrease in the inflation rate is independent of any Government intervention which is OS (and anyway it doest affect the conclusion).

[mayonnai5e]

Do you not have the OG11 book? Why not look at the official explanation?

A. Incorrect - the data set is representative so it does not need all available data and should represent the inflation trends
B. Correct - Inflation was recently stable. A dip last year caused it to go under that stable rate. If we were at the valley of that dip then the inflation rate may simply have moved upwards to return to the stable rate of 4%. If this is the case, then the current 4% is actually the stable rate so this weakens the conclusion by showing that the rate may no longer increase.
C. Strengthens the argument instead of weakens.
D. Irrelevant. A 10-year low is just that: a low point. Provides no info about future changes in inflation.
E. Irrelevant.

OA is B if I remember correctly.

[samirpandeyit62]

mayonnai5e,
If you quoted the OG explanation or othewise also, it looks quiet convincing, I dont know how I overlooked "representative" in the first choice. This lone is sufficient to eliminate ch 1.

[Auzbee]

I did say that I have looked at the OG explanation, but it still does not make sense to me. But after thinking hard about it, and using the method of elimination, I feel that it is right answer.
Sometimes these kind of questions really shake your confidence in solving CR questions. They are tricky yet they look simple.

[samirpandeyit62]

I agree with u Auzbee, In this question one can conclude on B by POE, as all the other choices cannot be true, but I dont think one can easily reason for B at the first glance.

[mayonnai5e]

Often, the easiest way to approach problems with statistics, data and/or number is too visualize it mentally:

"We can conclude that inflation is on an upward trend and the rate will be still higher next year. "

What picture do you imagine from this? A graph with some line with an upward slope. If "now" is a point near the bottom, next year should be a point higher up on the line since "the rate will be still higher next year."

If you focus on the conclusion and visualize this, you can see that to weaken the conclusion, you can simply find some data that indicates either the next year's point will not be higher than the "now" point or that the line is in fact not what the author states that it will (that it will be a line with an upward slope." B does the former by showing us that the line is actually flat with no upward slope.

[samirpandeyit62]

Thanks again mayonnai5e,
I really appreciate the way you inculcate your ideas, will definitely use this, actually when I solved it, I somehow managed to conclude that the 1st chioce (I think I was hasty) would be the answer, I presume after that I got a little baised towards the other choices, the last three we though clearly wrong but the second one deserved some analysis which I didn't give it, anyway thanks again.

[vanessa.m]

I would go with option A as the correct option