Over the last eight years, the Federal Reserve Bank has raised the prime interest rate by a quarter-point more than ten times. The Bank raises rates when its Board of Governors fears inflation and lowers rates when the economy is slowing down.

Which of the following is the most logical conclusion for the paragraph above?

Correct answer marked below

The Federal Reserve should be replaced with regional banks that can respond more quickly to changing economic conditions.

The Federal Reserve has raised the prime rate in recent years to try to control inflation.

Correct

The economy has entered a prolonged recession caused by Federal Reserve policies.

The monetary policy of the United States is no longer controlled by the Federal Reserve.

The Federal Reserve has consistently raised the prime rate over the last several years.

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What this question tests

Whether you can identify the argument's main conclusion as opposed to a supporting premise.

Selecting a restatement of a premise or a side point instead of the central conclusion.