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Difficulty: MediumStatement and Conclusions or Inferences

Read the given statements and determine which of the conclusions can be logically drawn from them.

Statements:
1. Every sovereign debt restructuring program initiated by the Apex Bank mandates the implementation of strict fiscal austerity measures.
2. No nation currently implementing strict fiscal austerity measures has recorded a short-term expansion in social welfare expenditure.

Conclusions:
I. A nation that records a short-term expansion in social welfare expenditure is not undergoing a sovereign debt restructuring program initiated by the Apex Bank.
II. The Apex Bank's restructuring programs are the primary reason why nations adopt strict fiscal austerity measures.

Which of the following options is correct?

  1. Only conclusion I followsAnswer
  2. B
    Only conclusion II follows
  3. C
    Both conclusion I and conclusion II follow
  4. D
    Neither conclusion I nor conclusion II follows

Answer

Only conclusion I follows.
The correct answer identifies that only the first conclusion is a valid logical deduction. The premises form a logical chain: 'Restructuring' requires 'Austerity', and 'Austerity' ensures 'No Expansion'. Through the contrapositive rule, if a nation has an 'Expansion', it cannot be under 'Austerity', and therefore cannot be undergoing 'Restructuring'. The second conclusion introduces the phrase 'primary reason', which is an unwarranted assumption not supported by the strict text of the statements.

Step-by-Step Solution

1
Analyze the first statement as a conditional relationship.
Restructuring program -> Strict fiscal austerity.
The statement uses 'Every', establishing a direct logical necessity.
2
Analyze the second statement and link it to the first.
Strict fiscal austerity -> No short-term expansion in social welfare expenditure.
The word 'No' establishes that austerity mutually excludes welfare expansion.
3
Evaluate Conclusion I using the combined logic.
Conclusion I is logically valid.
Since Restructuring -> Austerity -> No Expansion, the contrapositive is mathematically true: Expansion -> No Restructuring.
4
Evaluate Conclusion II based solely on the text.
Conclusion II is invalid.
The text states restructuring requires austerity, but never claims it is the 'primary reason' for it. Austerity could be adopted for many other unstated reasons.

Key Concept

Syllogistic logic and contrapositive deduction
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Topics

Statement and Conclusions or Inferences

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