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Canadians now increasingly engage in "out shopping" which is

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Canadians now increasingly engage in "out shopping" which is [#permalink] New post 30 Apr 2006, 06:32
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A
B
C
D
E

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Canadians now increasingly engage in "out shopping" which is shopping across the national border, where prices are lower. Prices are lower outside of Canada in large part because the goods and service tax that pays for the Canadian social services is not applied.

Which of the following is best supported on the basis of the information above?

A If the upward trend in out shopping continues at a significant level and the amounts paid bu the governmne tfor Canadian social services are mainatined, the Canadian goods and service tax will be assessed at a higher rate.

B If Canada imposes a substantial tarrif on the goods bought across the border, a reciprocal tarrif on the cross-border shopping in the other direction will be imposed, thereby harming the Canadian businesses.

C The amounts the Canadian government pays out to those who provide social services to Canadians are increasing.

D The same brands of goods are available to Canadian shoppers across the border as they are available in Canada.

E Out shopping purchases are subject to Canadian taxes when the purchaser crosses the border to bring them into Canada.
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 [#permalink] New post 30 Apr 2006, 07:43
i'll go for E
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 [#permalink] New post 30 Apr 2006, 09:45
I think it is D
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 [#permalink] New post 30 Apr 2006, 09:55
I had chosen D as well as that is the most straight forward inference.
But OA is A
Why?
Option A seems assumes something that may be a reach.
Can anyone explain?
This is from a PP test.
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 [#permalink] New post 30 Apr 2006, 17:15
I must be way off...
I initially thought it was B. Oh well, more practise needed.
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 [#permalink] New post 30 Apr 2006, 19:42
It should be "A".

According to "A", if people continue shooping abroad (it means less shopping in Canada) & if the amount (collected through taxes) paid to Canadian social services by the government has to be kept same, then tax has to be increased.
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 [#permalink] New post 30 Apr 2006, 19:59
vivek123:
Isn't A little bit of a reach. The assumption made when choosing A is that there is no other way to compensate for the lost revenue in taxes.
D is more direct.
Could you explain why choose A over D?
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 [#permalink] New post 30 Apr 2006, 20:05
cindyn wrote:
vivek123:
Isn't A little bit of a reach. The assumption made when choosing A is that there is no other way to compensate for the lost revenue in taxes.
D is more direct.
Could you explain why choose A over D?


cindyn,

"The same brands of goods are available to Canadian shoppers across the border as they are available in Canada"

is not supported by the argument, it doesn't say anything about the types of goods available in Canada & abroad. "D" may be correct, may not be correct. So little dangerous to select.

Whereas, in "A", the reasoning is perfect & according the what argument says. The tax collection is dropped since people are not shopping in Canada & if the amount collected through tax has to be same, tax itself has to be increased.
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 [#permalink] New post 01 May 2006, 03:13
agree with vivek123, "the same brands" is too specific, guess if you buy bread 50% cheaper abroad you don't care much about the brand
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 [#permalink] New post 01 May 2006, 03:45
Good point vivek123. Thanks.
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 [#permalink] New post 02 May 2006, 22:00
A again
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 [#permalink] New post 05 May 2006, 11:41
using POE, i choose A.

Don't you think that in order to answer that question one should know some economic principles, whereas GMAC claims that no specific knowledge is required in answering the verbal questions.

Anyway, I still think that this choice is out of scope.
  [#permalink] 05 May 2006, 11:41
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