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Difficulty: HardSufficient Assumption

Financial theorist: A financial market is robust only if it is capable of withstanding severe liquidity shocks and maintains transparent trading protocols. The novel commodities exchange, Aetherion, utilizes decentralized anonymous ledgers. Because this feature completely precludes the maintenance of transparent trading protocols, it follows that Aetherion's underlying economic model must be inherently unstable.

Which one of the following is an assumption that, if true, allows the financial theorist's conclusion to be properly drawn?

  1. A
    An economic model is inherently unstable only if the financial market it underlies fails to maintain transparent trading protocols.
  2. B
    Any financial market that is robust possesses an economic model that is not inherently unstable.
  3. Every financial market that is not robust has an inherently unstable economic model.Answer
  4. D
    At least some financial markets that are not robust have inherently unstable economic models.
  5. E
    The vast majority of financial markets that fail to maintain transparent trading protocols have inherently unstable economic models.

Answer

Every financial market that is not robust has an inherently unstable economic model.
The argument establishes that maintaining transparent trading protocols is a necessary condition for a market to be robust (Robust -> Transparent). It then tells us Aetherion cannot maintain transparent protocols. By the contrapositive, Aetherion is not robust. The author concludes that Aetherion's economic model is inherently unstable. To completely bridge the gap, we must link the established fact (Aetherion is not robust) to the conclusion (Aetherion is inherently unstable). The statement 'Every financial market that is not robust has an inherently unstable economic model' perfectly supplies this bridge.

Step-by-Step Solution

1
Map the formal logic of the first premise.
Robust -> Capable of withstanding shocks AND Maintains transparent protocols.
The phrase 'only if' introduces necessary conditions for a market to be considered robust.
2
Evaluate the facts provided about Aetherion.
Aetherion utilizes decentralized anonymous ledgers, which means it DOES NOT maintain transparent trading protocols (~Transparent).
The stimulus explicitly states that the ledgers completely preclude maintaining transparent protocols.
3
Draw an intermediate conclusion about Aetherion.
Because Aetherion fails a necessary condition for robustness (~Transparent), Aetherion is not robust (~Robust).
Applying the contrapositive of the first premise (~Transparent OR ~Capable of withstanding shocks -> ~Robust).
4
Identify the logical gap to the main conclusion.
The argument concludes Aetherion is inherently unstable. The gap is between the deduced fact '~Robust' (or '~Transparent') and the conclusion 'Inherently unstable'.
A sufficient assumption must provide a 100% guaranteed bridge from the premises to the final conclusion.
5
Formulate the required bridge and select the matching option.
The assumption 'If ~Robust, then Inherently unstable' (~Robust -> Unstable) perfectly completes the logical chain.
Combining the rule '~Robust -> Unstable' with the established fact 'Aetherion is ~Robust' deductively proves the conclusion.

Key Concept

Conditional Logic Bridges
Estimated Time:2m 0s
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Topics

Sufficient Assumption

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