medium · LSAT Logical Reasoning

Many economists argue that a high rate of personal saving is essential for long-term national economic growth, as it provides the capital necessary for business investment. However, if every individual in an economy simultaneously increases their saving rate, total consumer demand will drop, potentially leading to a recession that reduces the very income from which people save.

The statement that 'total consumer demand will drop' plays which one of the following roles in the argument?

  1. It is an intermediate step that helps explain how universal saving could end up undercutting the income people save from.
  2. It is the central claim the author is ultimately driving the entire passage toward establishing.
  3. It is a fact the author raises only to set it aside as having no bearing on the saving debate.
  4. It is conceded to the pro-saving economists as a point on which their position is correct.
  5. It is the recession the author predicts will follow once everyone raises their saving rate.

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