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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 10 Oct 2009, 08:42
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A
B
C
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E

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89% (02:10) correct 11% (04:27) wrong based on 13 sessions
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-services tax that pays for Canadian social services is not applied.

Which one 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 by the government for Canadian social services are maintained, the Canadian goods-and-services tax will be assessed at a higher rate.
(B) If Canada imposes a substantial tariff on the goods bought across the border, a reciprocal tariff on cross-border shopping in the other direction will be imposed, thereby harming 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 are available in Canada.
(E) Out-shopping purchases are subject to Canadian taxes when the purchaser crosses the border to bring them into Canada.

Kindly reason out your responses..
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Re: Canadian Out-Shopping [#permalink] New post 10 Oct 2009, 14:21
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I'm going with A

Social Services are paid through GST. GST = Sales *X%. If Social Services stay the same and the amount of Sales decreases the only way to pay for social services is to increase the % charged on the remaining sales.
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Re: Canadian Out-Shopping [#permalink] New post 10 Oct 2009, 15:43
on the basis of the information given i would go with d : canadian shoppers are getting the same brands outside the border.
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Re: Canadian Out-Shopping [#permalink] New post 11 Oct 2009, 09:32
IMO E..from the info given on people going outside Canada for shopping and govt. applying tax in the inside Canada...v cn legitimately conclude E.
IMO D talks about brands availble vich is out of scope.
A is also close but its conditional...so E is the best option in IMO.

OA pls
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Re: Canadian Out-Shopping [#permalink] New post 11 Oct 2009, 12:38
Thanks all for the participation! The OA is A. I believe the reasoning given by hogann is logical.. The reasoning clearifies why we should choose option A over other options..
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Re: Canadian Out-Shopping [#permalink] New post 12 Oct 2009, 05:17
Hi,
The reasoning provided by hogann is correct but pls let me know wts wrng in E?..we cn conclude E logically ....
pls correct me if i m wrong!
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Re: Canadian Out-Shopping [#permalink] New post 12 Oct 2009, 08:48
Answer (E) states that "Out-shopping purchases are subject to Canadian taxes when the purchaser crosses the border to bring them into Canada". If that statement is true then people would not engage in out-shopping purchases since when they go back to Canada they will have to pay taxes anyways, which completely kills the reason why they would engage in out-shopping in the first place. Therefore E is wrong.
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Re: Canadian Out-Shopping [#permalink] New post 12 Oct 2009, 09:25
I got it..thnks! 11MBA
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Re: Canadians now increasingly engage in out-shopping, which is [#permalink] New post 21 Oct 2012, 06:40
Expert's post
Indeed a tough question, considering its words, and must say indeed a great explanation by hogann.
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Re: Canadian Out-Shopping [#permalink] New post 14 Oct 2013, 05:24
hogann wrote:
I'm going with A

Social Services are paid through GST. GST = Sales *X%. If Social Services stay the same and the amount of Sales decreases the only way to pay for social services is to increase the % charged on the remaining sales.


Dude, that's a great explanation. Kudos for you!
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Re: Canadians now increasingly engage in out-shopping, which is [#permalink] New post 16 Dec 2013, 00:39
i wouldn't have thought of A even if I had read the question a hundred times :wall
Re: Canadians now increasingly engage in out-shopping, which is   [#permalink] 16 Dec 2013, 00:39
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