Logical Reasoning - Statement and Argument - Discussion

Each question given below consists of a statement, followed by two arguments numbered I and II. You have to decide which of the arguments is a 'strong' argument and which is a 'weak' argument.

Give answer:

  • (A) If only argument I is strong
  • (B) If only argument II is strong
  • (C) If either I or II is strong
  • (D) If neither I nor II is strong and
  • (E) If both I and II are strong.

34. 

Statement: Should there be only one rate of interest for term deposits of varying durations in banks?

Arguments:

  1. No. People will refrain from keeping money for longer duration resulting into reduction of liquidity level of banks.
  2. Yes. This will be much simple for the common people and they may be encouraged to keep more money in banks.

[A]. Only argument I is strong
[B]. Only argument II is strong
[C]. Either I or II is strong
[D]. Neither I nor II is strong
[E]. Both I and II are strong

Answer: Option A

Explanation:

Clearly, the proposed scheme would discourage people from keeping deposits for longer durations (the rate of interest being the same for short durations) and not draw in more funds. So, only argument I holds.

Anonymous said: (Feb 14, 2021)  
Why not option E? Explain.

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