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I understand why A, B, C and E are wrong, but I am not quite convinced that D is the right answer either.
I would think that if a nation that seeks deterrence and has unsurpassed military power as stated in (D), it would not be the interest of that nation to let the potential aggressors become aware of its actual power of retaliatory attack which is not that great (since they have unsurpassed military power). They would rather want to make the aggressors not know of their actual unsurpassed retaliatory power but make the aggressors believe they have higher capacity than their actual military power, so that the aggressors would believe it could not defend itself against that retaliation.
Comments
_If a country already has unsurpassed military power it means no body has better military power than this country. Unsurpassed means it's the best military power possible and that's actually really really good. _
Since this nation has unsurpassed military power, that means no nation has greater military power than this nation, no point in actually saying you have greater powers because you already have the best.
I think here you are more on point. The whole point of maintaining deterrence is to make aggressors "believe" that if you attack you cannot defend yourself. That's what answer choice D is getting at.
The danger with MBT questions types is that you can't allow yourself any room for assumptions.
Our first sentence tells us about theory of deterrence: A would be aggressor is hesitant to attack because it fears a retaliation from the nation it attacks.
Our second sentence talk about applicability of that theory of deterrence and how to maintain it: a would be aggressor nation would have to believe that the nation it attacks would retaliate in such a way that that the nation that attacks (our would be aggressor) would not be able to defend itself against that retaliation).
Answer Choice D says that: If a nation wants to deter attacks from would be aggressors it should let them know of its power of retaliatory attack. (This is directly pulled from our second sentence where it's talking about how a nation that might be the aggressor will have to "believe" that the other nation will attack in a way that the aggressor cannot with stand it.) So if that's the case that the attacker nation has to "believe" in the other nations retaliatory power, if you have the military power like our answer choice "D" says then shouldn't you let potential aggressors know this so they can "believe" you posses these powers?
I hope that helps : )
Oh! I completely misunderstood the word unsurpassed. It makes perfect sense then. Thank you Sami for pointing it out and for the thorough explanation.