A law passed in Rockville three years ago allows a 30% tax : GMAT Critical Reasoning (CR)
Check GMAT Club App Tracker for the Latest School Decision Releases http://gmatclub.com/AppTrack

It is currently 04 Dec 2016, 21:01
GMAT Club Tests

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

A law passed in Rockville three years ago allows a 30% tax

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

1 KUDOS received
Manager
Manager
avatar
Joined: 21 May 2011
Posts: 239
Followers: 0

Kudos [?]: 198 [1] , given: 8

A law passed in Rockville three years ago allows a 30% tax [#permalink]

Show Tags

New post 10 Jul 2011, 11:50
1
This post received
KUDOS
3
This post was
BOOKMARKED
00:00
A
B
C
D
E

Difficulty:

  65% (hard)

Question Stats:

54% (02:27) correct 46% (01:33) wrong based on 228 sessions

HideShow timer Statistics

A law passed in Rockville three years ago allows a 30% tax credit to consumers who purchase a newly constructed home. The tax credit was intended to stimulate the local economy by creating a higher demand for new houses and spurring the creation of jobs in construction and design. However, since the law was passed, the growth in sales of newly constructed homes has dropped each year, from 15% to 10% to 5%. Obviously, this law has had little or no effect on the sale of newly constructed homes.

Which of the following must be true if the above conclusion is to be properly drawn?

New house sales are directly tied to personal income.
New house sales cannot increase by more than 6% next year.
If the tax credit had been 50%, there would have been a larger increase in new house sales
Without the tax credit, new house sales would not have been significantly lower.
Tax credits for specific purchases are usually ineffective in influencing consumers to make those purchases.
[Reveal] Spoiler: OA
Request Expert Reply
If you have any questions
you can ask an expert
New!
Current Student
avatar
Joined: 26 May 2005
Posts: 565
Followers: 18

Kudos [?]: 200 [0], given: 13

Re: CR - Assumption 700 level [#permalink]

Show Tags

New post 10 Jul 2011, 12:14
bschool83 wrote:
A law passed in Rockville three years ago allows a 30% tax credit to consumers who purchase a newly constructed home. The tax credit was intended to stimulate the local economy by creating a higher demand for new houses and spurring the creation of jobs in construction and design. However, since the law was passed, the growth in sales of newly constructed homes has dropped each year, from 15% to 10% to 5%. Obviously, this law has had little or no effect on the sale of newly constructed homes.

Which of the following must be true if the above conclusion is to be properly drawn?

New house sales are directly tied to personal income.
New house sales cannot increase by more than 6% next year.
If the tax credit had been 50%, there would have been a larger increase in new house sales
Without the tax credit, new house sales would not have been significantly lower.
Tax credits for specific purchases are usually ineffective in influencing consumers to make those purchases.


D it is
we need an answer that says the drop wouldn't have been even worse without the tax credit
1 KUDOS received
Senior Manager
Senior Manager
avatar
Joined: 17 May 2010
Posts: 299
GMAT 1: 710 Q47 V40
Followers: 4

Kudos [?]: 47 [1] , given: 7

Re: CR - Assumption 700 level [#permalink]

Show Tags

New post 13 Jul 2011, 06:21
1
This post received
KUDOS
I say D. The author is assuming that without the tax credit, the sales would have been similar, not worse than the sales figure now.
_________________

If you like my post, consider giving me KUDOS!

Manager
Manager
User avatar
Joined: 14 Feb 2010
Posts: 161
Location: Banaglore
Followers: 1

Kudos [?]: 66 [0], given: 8

Re: CR - Assumption 700 level [#permalink]

Show Tags

New post 13 Jul 2011, 23:53
Can some one please explain why E is incorrect?
1 KUDOS received
Intern
Intern
avatar
Status: Applying in Round 2
Joined: 17 Mar 2011
Posts: 23
Concentration: Finance, Accounting
Schools: Stern '14
GMAT 1: 660 Q49 V31
Followers: 1

Kudos [?]: 11 [1] , given: 28

Re: CR - Assumption 700 level [#permalink]

Show Tags

New post 20 Jul 2011, 21:22
1
This post received
KUDOS
A law passed in Rockville three years ago allows a 30% tax credit to consumers who purchase a newly constructed home. The tax credit was intended to stimulate the local economy by creating a higher demand for new houses and spurring the creation of jobs in construction and design. However, since the law was passed, the growth in sales of newly constructed homes has dropped each year, from 15% to 10% to 5%. Obviously, this law has had little or no effect on the sale of newly constructed homes.

Which of the following must be true if the above conclusion is to be properly drawn?

New house sales are directly tied to personal income.
New house sales cannot increase by more than 6% next year.
If the tax credit had been 50%, there would have been a larger increase in new house sales
Without the tax credit, new house sales would not have been significantly lower.
[b]Addresses the conclusion assuming that decrease would not have been sharp if this was not the case
Tax credits for specific purchases are usually ineffective in influencing consumers to make those purchases.

Answer should be clearly D
Intern
Intern
avatar
Joined: 06 Jul 2011
Posts: 28
Followers: 0

Kudos [?]: 5 [0], given: 0

Re: CR - Assumption 700 level [#permalink]

Show Tags

New post 20 Jul 2011, 21:43
1
This post was
BOOKMARKED
zuberahmed wrote:
Can some one please explain why E is incorrect?


E - Tax credits for specific purchases are usually ineffective in influencing consumers to make those purchases.
    If we negate, tax credits are usually effective in influencing consumers. It doesn't hurt the argument. Key word here is usually. In reality, it's neither here nor there (is that a GMAT SC-type correct idiom? I haven't gotten there yet hehe). Sure, tax credits are usually effective, but maybe here they are or are not.

D- Without the tax credit, new house sales would not have been significantly lower.
    If we negate, new house sales would be significantly lower without the tax credit. The argument breaks down and the law has an equally significant effect. Thus, this is the correct answer. It must be true if the above conclusion is to be properly drawn.

_________________

GMAT Day: Nov. 19, 2011

Senior Manager
Senior Manager
avatar
Joined: 08 Jun 2010
Posts: 397
Location: United States
Concentration: General Management, Finance
GMAT 1: 680 Q50 V32
Followers: 3

Kudos [?]: 86 [0], given: 13

Re: CR - Assumption 700 level [#permalink]

Show Tags

New post 23 Jul 2011, 00:57
zuberahmed wrote:
Can some one please explain why E is incorrect?


Tax credits for specific purchases are usually ineffective in influencing consumers to make those purchases.

This statement has no bearing on the conclusion which is : Obviously, this law has had little or no effect on the sale of newly constructed homes.

But I believe if the assumption was :Tax credits for specific purchases are usually effective in influencing consumers to make those purchases. It might be an assumption, because if you negate it, the argument may fail if change effective back to ineffective.

My answer was D as well.
Senior Manager
Senior Manager
avatar
Joined: 11 Apr 2011
Posts: 268
Followers: 31

Kudos [?]: 444 [0], given: 13

GMAT ToolKit User
Re: CR - Assumption 700 level [#permalink]

Show Tags

New post 23 Jul 2011, 12:43
I chose E as well...stupid assumption questions lol. Whats the source?
_________________

Powerscore CR Bible Full Chapter Notes | Easily Extend Vocabulary List with Google Dictionary

Please kudo me if you found my post useful. Thanks!!! :)

GMAT Club Legend
GMAT Club Legend
User avatar
Joined: 01 Oct 2013
Posts: 10437
Followers: 883

Kudos [?]: 191 [0], given: 0

Premium Member
Re: A law passed in Rockville three years ago allows a 30% tax [#permalink]

Show Tags

New post 12 Nov 2014, 07:01
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
Chat Moderator
avatar
Joined: 04 Aug 2016
Posts: 174
GPA: 4
Followers: 1

Kudos [?]: 8 [0], given: 81

Premium Member CAT Tests
Re: A law passed in Rockville three years ago allows a 30% tax [#permalink]

Show Tags

New post 21 Sep 2016, 08:29
I did not follow the explanation provided. Can someone break it down please?
1 KUDOS received
Math Forum Moderator
User avatar
Status: QA & VA Forum Moderator
Joined: 11 Jun 2011
Posts: 2064
Location: India
GPA: 3.5
WE: Business Development (Commercial Banking)
Followers: 80

Kudos [?]: 551 [1] , given: 309

GMAT ToolKit User Premium Member CAT Tests
Re: A law passed in Rockville three years ago allows a 30% tax [#permalink]

Show Tags

New post 21 Sep 2016, 12:18
1
This post received
KUDOS
warriorguy wrote:
I did not follow the explanation provided. Can someone break it down please?


Let's try -

Quote:
A law passed in Rockville three years ago allows a 30% tax credit to consumers who purchase a newly constructed home. The tax credit was intended to stimulate the local economy by creating a higher demand for new houses and spurring the creation of jobs in construction and design.


30% Tax credit for purchase of new House --------> Stimulating demand for new House ----> Creation of contract jobs.
|------------------------(A)------------------------------->-------------------(B)----------------------->-----------(C)----------------|

Quote:
However, since the law was passed, the growth in sales of newly constructed homes has dropped each year, from 15% to 10% to 5%. Obviously, this law has had little or no effect on the sale of newly constructed homes.


30% Tax credit for purchase of new House <--------- Demand for new House dropped
|------------------------(~A)---------------------------<-------------------(~B)----------------|


Check the negation logic used in the stimulus ( as depicted above) , hope this helps...

_________________

Thanks and Regards

Abhishek....

PLEASE FOLLOW THE RULES FOR POSTING IN QA AND VA FORUM AND USE SEARCH FUNCTION BEFORE POSTING NEW QUESTIONS

How to use Search Function in GMAT Club | Rules for Posting in QA forum | Writing Mathematical Formulas |Rules for Posting in VA forum | Request Expert's Reply ( VA Forum Only )

Manager
Manager
avatar
Joined: 24 Jul 2016
Posts: 94
Followers: 0

Kudos [?]: 2 [0], given: 4

Re: A law passed in Rockville three years ago allows a 30% tax [#permalink]

Show Tags

New post 21 Sep 2016, 12:49
I chose D, was confused between D and E


Sent from my iPhone using GMAT Club Forum mobile app
_________________

Kaplan CAT#1 660 (Q50, V 33)
GMATPrep CAT#1 590 (Q 49, V 28)
Veritas CAT#1 640 (Q 47, V 31)
Veritas CAT#2 620 (Q 46, V 30)
Veritas CAT#3 680 (Q 50, V 34)
Veritas CAT#4 650 (Q 49, V 31)
Princeton Review CAT#1 650 (Q 44, V 36)
Kaplan CAT2 720 (Q49, V40)- got some questions in other tests already
Veritas CAT#5 680
Kaplan CAT#3 710
Target GMAT 720

Re: A law passed in Rockville three years ago allows a 30% tax   [#permalink] 21 Sep 2016, 12:49
    Similar topics Author Replies Last post
Similar
Topics:
16 Experts publish their posts in the topic The Fieldpark nuclear power plant, cited three years ago by a Harley1980 6 03 Sep 2015, 06:03
5 Ten years ago, the Salisbury City Council passed the Culinary Bill, ne tia2112 8 09 Jun 2015, 11:58
2 A law passed in Rockville three years ago allows a 30% tax psdeol 7 19 Oct 2012, 09:47
A law passed in Rockville three years ago allows a 30% tax netcaesar 8 28 Aug 2009, 08:00
A law passed five years ago requires all new cars sold in jamesrwright3 10 29 Dec 2006, 06:01
Display posts from previous: Sort by

A law passed in Rockville three years ago allows a 30% tax

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.