Wall Street CEO: “Deregulation of the banking and financial industry i

QUESTION

Wall Street CEO: “Deregulation of the banking and financial industry in the 1990s and early 2000s would not have led to recession if it hadn’t been accompanied by the wide availability of cheap credit.”

Which of the following, if true, weakens the CEO’s claim?
A) Historical and worldwide studies have shown that deregulation accompanied by computerized trading typically leads to expansion.
B) Historical and worldwide studies have shown that deregulation accompanied by expensive credit typically leads to expansion.
C) Historical and worldwide studies have shown that cheap credit accompanied by computerized trading typically leads to recession.
D) Historical and worldwide studies have shown that deregulation accompanied by expensive credit typically leads to recession.
E) Historical and worldwide studies have shown that regulation accompanied by investor overconfidence typically leads to recession.

ANSWER

Answer: D
Explanation: D) The Wall Street CEO says that only when deregulation is accompanied by cheap credit does deregulation lead to recession. Thus, his claim is weakened if, as Choice D says, deregulation accompanied by expensive credit also leads to recession. His claim is not weakened by instances, such as Choices A and B, when deregulation leads to expansion, or when deregulation is not a factor, such as in choices C and E.