Question #1037

Confused on video answer

Started by jaberges · started 2020-12-10 07:03 · last activity 2021-01-07 13:58 · 2 replies

Hello, even after watching the video, I am still confused about how the answer choice was chosen. The video seems to connect the statements "lower IR ---> NCI" "IG--->NCI" but I am still not sure how they can be connected because "NCI" is the necessary condition in both cases. I don't understand how lower interest rates might create industrial growth as lower interest rates only mean new capital investment and NCI is a necessary condition for IG, so we cannot assume it causes IG.

Replies

  1. ohanamgt · 2021-01-03 22:07

    How are we supposed to know that the "if" in the first sentence means it is an "overarching" principle? Because I tried to diagram MCFU and of course didn't know what to do with the second part of the sentence.

  2. shunhe · 2021-01-07 13:58

    Hi @jaberges, Thanks for the question! So the issue is that we’re not actually connecting the two statements. Remember, a “precondition” would be the necessary condition, since the necessary condition is “necessarily” true if the sufficient condition is true. So all (B) says is that RIR would lead to a necessary condition, which is true based on your diagram . Hope this helps! Feel free to ask any other questions that you might have.

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