The recent decline in the value of the dollar was triggered by a prediction of slower economic growth in the coming year. But that prediction would not have adversely affected the dollar had it not been for the government’s huge budget deficit, which must therefore be decreased to prevent future currency declines.
Which of the following, if true, would most seriously weaken the conclusion about how to prevent future currency declines?
A. The government has made little attempt to reduce the budget deficit.
B. The budget deficit has not caused a slowdown in economic growth.
C. The value of the dollar declined several times in the year prior to the recent prediction of slower economic growth.
D. Before there was a large budget deficit, predictions of slower economic growth frequently caused declines in the dollar’s value.
E. When there is a large budget deficit, other events in addition to predictions of slower economic growth sometimes trigger declines in currency value.
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