Self-paced
Economist: Support During a recession, a company can cut personnel costs either by laying off some employees without reducing the wages of remaining employees or by reducing the wages of all employees without laying off anyone. ████ ██████ ███████ ███ ███████ ██████ ██ █████ █████ ███ █████████ █████ █████ ████ █████ █████ ████ █████████ ████ ██████ █████████ █████ ██████ ███████████ ████ ███ ██████ ██ ███ ███ ██████████
Summarize Argument
The economist concludes that companies are likely to lay off employees when they need to reduce personnel costs during recessions. This is because layoffs affect morale less than wage reductions.
Notable Assumptions
The economist believes that companies are more likely to take actions that have a less harmful effect on morale. This assumes that companies aren't primarily paying attention to financial or other non-morale factors when making these decisions.
8.
Which one of the following, ██ █████ ████ ███████████ ███ ███████████ ██████████
a
Employee morale is ███████ ███ ███████ ███████ ███████ ██████████ █████████ █████ ███████ ██ ███ ███ █████████ ██ ██ ██████ █████ ██████
This strengthens the argument. If companies are primarily guided by morale considerations when deciding between layoffs and wage cuts, and--as we know from the premises--layoffs damage morale less, then it makes sense that companies will likely go with layoffs rather than wage cuts.
b
In general, companies ████████ █████ ████ ████ ████ ███ ██████ ██ ████ ██████ █████████ ██████████
We aren't talking about wage increases or the difficulty of hiring employees. We're talking about how companies make the decision either to cut wages and not fire employees, or fire employees and not cut wages. \"Not cutting\" and \"not firing\" aren't the same things as \"increasing\" or \"hiring\", so this answer choice doesn't tell us anything relevant to the argument.
c
Some companies will ██ ██████ ██ ████ █ ██████ ██████ ██████████ ██ ██████ ███ ████ ████ ██████ █████████ ██████
Irrelevant. We're not interested in whether companies will make a profit or not. We just want to know how they make their decisions to reduce costs by either laying off employees or reducing wages.
d
When companies cut █████████ █████ ██████ ██████████ ██ ████████ ██████ ████ █████████ ███████ ███████
Irrelevant. The premises have already established that reducing wages is worse for morale than laying people off. Knowing the details of what happens when wages are reduced doesn't help us decide whether companies are more likely to pursue the less morale-harming course of action.
e
Some companies that ████ ████ ███ █████████ ██████ ██████████ ████ ███ ██████████ ███████ ██████ █████████ █████████ ████ ████████ ██████ ████████
This weakens the economist’s argument. It tells us that even if layoffs harm morale less than wage cuts, layoffs come with a potential long-term downside that might steer companies in favor of making wage cuts rather than laying people off during a recession.