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In 1983Argonia’s currency, the argon, underwent a reduction in value relative to theworld’s strongest currencies. This reduction resulted in a significant increasein Argonia’s exports over 1982 levels. In 1987 a similar reduction in the valueof the argon led to another increase in Argonia’s exports. Faced with the needto increase exports yet again, Argonia’s finance minister has proposed anotherreduction in the value of the argon.
Which of thefollowing, if true, most strongly supports the prediction that the financeminister’s plan will not result in a significant increase in Argonia’sexports next year?
A The value of the argon rose sharply last year against the world’s strongest currencies.
B In 1988 the argon lost a small amount of its value, and Aronian exports rose slightly in 1989.
C The value of Argonia’s exports was lower last year than it was the year before.
D All of Argonia’s export products are made by factories that were operating at full capacity last year, and new factories would take years to build.
E Reductions in the value of the argon have almost always led to significant reductions in the amount of goods and services that Argonians purchase from abroad.作者: willgoeu 时间: 2012-12-18 20:37
All of Argonia’s export products are made by factories that were operating at full capacity last year, and new factories would take years to build.
I guess this one is the rite answer coz given that the capacity is fully utilized, no more stimulus works under such circumstances.作者: xiangyu4255 时间: 2012-12-19 06:50
many thanks作者: SharonZ0902 时间: 2012-12-20 07:03
This choice is not logically strict since there might be inventories remained which could be stimulated by undervaluation of the currency.
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