PrepTest 129, Section 1, Question 22
Economist: Real wages in this country will increase(45 more words not shown)
Which one of the following,(14 more words not shown)
- ANeither real wages(9 more words not shown)
- BReal wages will(16 more words not shown)
- CSooner or later(5 more words not shown)
- DProductivity will not(12 more words not shown)
- EThe new technology(14 more words not shown)
Reading the argument
Low investment in technology is not the same thing as low growth in productivity. Why is the economist treating one as establishing the other?
The first premise gives us a requirement: real wages can increase significantly only if productivity increases notably. So to argue that a significant wage increase is unlikely, the economist needs a reason that the required productivity increase is unlikely.
Instead, we hear that businesses are investing very little in new technology and probably will continue doing so. Perhaps technology investment is an important route to productivity. But what about changing work procedures so the same staff and equipment produce more? Unless those other routes are ruled out, little technology investment doesn't settle the productivity forecast.
What we’re looking for
The question asks for an assumption that makes the conclusion follow. We need substantial investment in new technology to be required for productivity growth. Then the expected lack of that investment would rule out the needed productivity increase, which in turn would rule out the significant wage increase.
Working the answers
- A
The past several years don't establish what will happen in the near future. Productivity could begin increasing even after a period without increases. A also leaves unfilled the connection between the current investment pattern and future productivity.
- B
This tells us a way wages can rise: enough workers acquire new skills. It doesn't tell us that low technology investment prevents productivity or wage growth. We also don't know whether the workers will acquire the skills B describes. It doesn't close the economist's gap.
- C
'Sooner or later' could refer to a time far beyond the near future. A significant wage increase eventually is compatible with the economist's prediction that one is unlikely soon. C doesn't provide a reason for that near-term prediction.
- DCorrect
Without substantial technology investment, productivity will not increase. The country is currently investing very little, and that pattern is likely to continue for several years. Under D, a productivity increase is therefore unlikely during that period. Since a notable productivity increase is required for significant real-wage growth, the economist's conclusion follows with the same near-term uncertainty as the premise.
- E
Even if the technology currently being purchased contributes nothing to productivity, other changes might contribute a great deal. Reorganizing work could still produce the needed increase. E rules out a contribution from this particular investment, whereas D makes substantial technology investment a requirement for any productivity increase. Only the latter closes off the alternative routes the argument overlooks.
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