PART a If Deficits Increase Then the Economy Will Stagnate $\begin{array} { l } \text {If \( D \) then \( E \). }\\ \text {If \( D \) then I. }\\ \hline\text { If I then E.}\\\end{array}$

question 410

Essay

PART A If deficits increase then the economy will stagnate. Thus, if deficits increase, then interest rates will rise, because if interest rates rise, then the economy will stagnate.
Which of the following correctly expresses the form of this argument? a. $\begin{array} { l } \text {If \( D \) then \( E \). }\\ \text {If \( D \) then I. }\\ \hline\text { If I then E.}\\\end{array}$$\quad$ b. $\begin{array} { l } \text {If \( D \) then \( \mathrm{I} \). }\\ \text { If I then \( \mathrm{E} \).}\\ \hline\text { If \( D \) then \( E \).}\\\end{array}$$\quad$ c. $\begin{array} { l } \text { If \( D \) then I.}\\ \text {If D then E. }\\ \hline\text { If I then \( E \).}\\\end{array}$

d. $\begin{array} { l } \text { If \( \mathrm{D} \) then \( \mathrm{E} \). }\\ \text { If \( E \) then I. }\\ \text {If \( D \) then \( I \). }\\\end{array}$$\quad$ e. $\begin{array} { l } \text {If \( D \) then \( E \). }\\ \text { If I then \( E \).}\\ \text { If \( D \) then I.}\\\end{array}$ PART B
Which of the following substitutions proves the argument invalid?
A) D = Tom Hanks is a man, E = Tom Hanks is a human, I = Tom Hanks is a woman.
B) D = dogs, I = mammals, E = animals.
C) D = Bob is a physician, E = Bob is a professional, I = Bob is a doctor.
D) D = dogs, E = animals, I = cats.
E) D = Halle Berry is an actor, E = Halle Berry is a woman, I = Halle Berry is a human.

• A) D = Tom Hanks is a man, E = Tom Hanks is a human, I = Tom Hanks is a woman.
• B) D = dogs, I = mammals, E = animals.
• C) D = Bob is a physician, E = Bob is a professional, I = Bob is a doctor.
• D) D = dogs, E = animals, I = cats.
• E) D = Halle Berry is an actor, E = Halle Berry is a woman, I = Halle Berry is a human.

---

Definitions:

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to a change in interest rates, usually expressed in years.

Perpetuity

A financial term for a constant stream of identical cash flows with no end.

Yield

The earnings from an investment, like dividends or interest, shown as a percentage of the investment's original cost or its current market valuation.

Perpetuity

A type of financial instrument that provides an infinite stream of interest payments.