In the question given below consists of a statement, followed by two arguments number I and II. You have to decide which of the arguments is a ‘strong’ argument.
Statement: Should there be only one rate of interest for term deposits of varying duration in banks?
Arguments:
I. No, people will refrain from keeping money for longer durations.
II. Yes, it will be simpler and may encourage people to deposit more.

Given statement:

Should there be only one rate of interest for term deposits of varying duration in banks?

Given arguments:

I. No, people will refrain from keeping money for longer durations. → Strong

This argument is strong because it highlights a crucial aspect of human financial behavior. A higher interest rate for longer durations acts as an incentive for people to lock in their money for extended periods. Removing this differential would remove that incentive, potentially leading to a decrease in long-term deposits, which are valuable for banks' stability and long-term lending.

II. Yes, it will be simpler and may encourage people to deposit more. → Weak

While simplicity is generally desirable, this argument is weak because it fails to consider the primary motivation for term deposits: earning higher returns over time. While a simpler structure might appeal to some, the absence of a higher incentive for longer durations is likely to discourage significant long-term deposits. The claim that it "may encourage people to deposit more" is speculative and doesn't account for the core financial logic that drives term deposit decisions.

Thus, Only I is strong.

Hence, the correct answer is "Option 1".