This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: 4....L.+ n n +L . . . r r . n r l i . r - ~ r ~ n r l r , u , n n h r n , n 8.4 Critical Reasoning Sample Questions For these questions, select the best of the answer choices given. 1. Some economists view the Kennedy Johnson tax cut of 1964, which radically reduced corporate and individual taxes, as the impetus for the substantial prosperity enjoyed by the United States in the late 1960's and early 1970's. Which of the following, if true, would most weaken the claim that the tax cut of 1964 was the impetus for economic prosperity? A) Modernized, more productive factories were built in the late 1960's as a result of the funds made available by the tax cut. B) Improved economic conditions in Western Europe and Japan resulted in substantially increased demand for United States manufactured goods in the late 1960's. C) The tax cut of 1964 contained regulations concerning tax shelters that prompted investors to transfer their savings to more economically productive investments. D) Personal income after taxes rose in the years following 1964. E) In the late 1960's, unemployment was relatively low compared with the early 1960's. 2. In order to increase profits during a prolonged slowdown in sales, the largest manufacturers of automobiles in the United States have instituted record-setting price increases on all their models. The manufacturers believe that this strategy will succeed, even though it is inconsistent with the normal relationship between price and demand. The manufacturers' plan to increase profits relies on which of the following assumptions? A) Automobile manufacturers will, of necessity, raise prices whenever they introduce a new model. B) The smaller automobile manufacturers will continue to take away a large percentage of business from the largest manufacturers. The increased profit made on cars sold will more than compensate for any decline in sales caused by the price increases. New safety restraints that will soon become mandatory for all new cars will not be very costly for manufacturers to install. Low financing and extended warranties will attract many price-conscious consumers. 3. "Life expectancy" is the average age at death of the entire live-born population. In the middle of the nine- teenth century, life expectancy in North America was 40 years, whereas now it is nearly 80 years. Thus, in those days, people must have been considered old at an age that we now consider the prime of life. Which of the following, if true, undermines the argument above? A) In the middle of the nineteenth century, the population of North America was significantly smaller than it is today. B) Most of the gains in life expectancy in the last 150 years have come from reductions in the number of infants who die in their first year of life....
View Full Document
- Spring '12