Self-study
Economist: Support Currently the interest rates that banks pay to borrow are higher than the interest rates that they can receive for loans to large, financially strong companies. █████ ████ ███ █████████ ████ ██ █████████ ████ ███ ███ ███████████ ███████ ███ █████ ███████ ██ █████ ██ █████ ███ ████████████ █████████ ██ ████ ████ ██ ███ ████ █████ ████ ██ █████ ████ ███████ ██ █████████ ██ ████ ████ ██ ███ ████ █████ ████
Four Kinds Of Companies
The economist’s conclusion is that total lending across all companies is less today than it was five years ago. In support, the economist splits companies up into four categories, and gives us information about each of those categories. For the most part, that information is great and supports the conclusion quite well. For one of the categories, though (spoiler alert: it’s Large-and-Strong companies), the information isn’t relevant to the conclusion unless we make an assumption.
We’re gonna think about the supporting premises using a 2 x 2 table. Within the economist’s argument, companies are either Strong or Not-Strong, and they’re either Large or Not-Large (i.e. small-or-medium). Here’s how the premises map onto that structure:
Let’s start with the bottom row, where the economist tells us
Those claims cover three of our four categories, and we can comfortably say that lending to companies in those categories is less today than it was five years ago.
But what about companies that are Large-and-Strong? If lending to Large-and-Strong companies skyrocketed over the past five years, the economist’s conclusion about total lending is screwed.
The economist doesn’t give us any direct information about how much banks are lending to Large-and-Strong companies. Instead, we’re just given a fun fact: “currently the interest rates [blah blah blah].”
So that’s what’s missing. For the economist’s argument to work, we need actual information about how much banks are lending to Large-and-Strong companies. Phrasing this as a sufficient assumption, we get:
[That fun fact about interest rates] means banks are not currently lending more to Large-and-Strong companies than they were five years ago.
Analysis by MichaelWright
21.
The economist's conclusion follows logically ██ █████ ███ ██ ███ █████████ ██ ████████
a
Banks will not ████ █████ ██ ████████ █████ ████ ███ █████ ████ ███ ████████ █████ ████ ███ ██ ███████
b
Most small and ████████████ █████████ ████ ███████████ ████████ ████ █████ ███ ████ ████ ███ ████
c
Five years ago, ████ █████ █████ ████ ██ █████████ ████ ████ ███ ███████████ ███████
d
The interest rates ████ █████ █████████ ███ ██ ██████ ███ ██████ ████ ███ █████ ████ ████ ████ █████ ████
e
The interest rates ████ █████ ███ ████████████ █████████ ███ ██ ██████ ███ ██████ ████ █████ ████ ██ ██████ ███████████ ██████ ██████████