PrepTest 144, Section 2, Question 7
Economist: Owing to global economic forces since 1945,(29 more words not shown)
Which one of the following,(17 more words not shown)
- AInternational trade agreements(12 more words not shown)
- BEmployment in the(14 more words not shown)
- CBecause services are(11 more words not shown)
- DMany manufacturing jobs(9 more words not shown)
- ESome services can(16 more words not shown)
Reading the argument
A service economy can still trade. Lawyers, accountants, and other professionals provide services; those services aren't automatically confined to the country where the provider works. So my first reaction is to question the jump. A smaller share of workers in manufacturing tells us what kind of work people do. It doesn't, by itself, tell us how much international trade takes place.
What we’re looking for
But the question asks us to explain the decline in trade. That tells us to accept the decline and look for a reason the change in the economy could help account for it. What is it about services that might make them less likely to cross national borders? We need a connection between the kind of work and the location of its customers.
Working the answers
- A
Agreements covering both goods and services tell us that services are included in international trade arrangements. That doesn't explain why shifting toward services would reduce trade. We still need some reason services are less likely to be traded internationally.
- B
The degree of skill required doesn't tell us where the customers are. A highly skilled worker could serve nearby customers or customers in another country. Similar skill requirements don't explain the different amount of international trade.
- CCorrect
If services usually have to be delivered in person, the provider and customer generally need to be near each other. That helps explain why service markets tend to be local. As the economy shifts toward work serving local customers, less of its activity would involve international trade. C supplies the connection the original explanation left unstated.
- D
Automation could explain why manufacturing needs a smaller share of the workforce. It doesn't explain why international trade declines. Factories might use fewer workers while continuing to produce goods for customers abroad. Explaining a change in employment is not yet explaining a change in trade.
- E
Cheaper foreign services give customers a reason to obtain services internationally. That creates an incentive for trade rather than explaining why the move toward a service economy accompanies less trade. It points away from the explanation we need.
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