LSAT Question Explanation
PT 108, Section 2, Question 23
Necessary AssumptionArgument structure
The economist's country is very unlikely to experience significant inflation or deflation.
Inflation and deflation occur when the growth of the money supply doesn't match the growth in production of goods and services. In the Economist's country the money supply is anchored to gold, so the money supply is very stable.
Explanation
This argument is flawed because inflation and deflation occur when there is an imbalance between the money supply and the production of goods and services. But the Economist has only told us that their country's money supply is stable. There could be wild variations in the production of goods and services, which could lead to inflation or deflation.
The Economist's argument relies on the assumption that production of goods and services in the country is stable.
Answer choices
This is not necessary. Maybe stability in the money supply is the most effective way to avoid inflation or deflation. Either way, it doesn't affect the argument that the economist's country is unlikely to experience inflation or deflation.
This is not needed. There could be other ways to have a stable money supply, that wouldn't affect the argument about the economist's country.
This is needed. The economist only showed that their country's money supply is stable. Based on that, we also need to know that the production of goods and services is stable to conclude that the country probably won't experience inflation or deflation.
Not needed. We don't care if inflation or deflation is more likely. The economist is just concluding that neither is likely. For example, inflation could have a 2% chance of occurring and deflation could have a 1% chance of occurring and the conclusion (that neither is likely) wouldn't be affected at all.
Similar to (A), we don't care what the most effective means of preventing inflation is. We just need to know that the economist's country has stable production of goods and services, keeping it aligned with the stable money supply and therefore likely preventing inflation and deflation.