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In 1992, 5 percent of every dollar paid in tax went to [#permalink]
25 Sep 2010, 01:24
67% (01:58) correct
32% (01:57) wrong based on 31 sessions
In 1992, 5 percent of every dollar paid in tax went to support the unemployed citizens. In 1998,8 percent of every dollar paid in tax went to such funds, although that unemployment rate has decreased in 1998 than in 1992. Each of the following, if true, could explain the simultaneous increase in percent of every dollar paid in tax to support the unemployed citizens and decrease in the number of unemployment rate EXCEPT:
A. On average, each unemployed citizen received more money in 1998 than 1992.
B. On average, people paid less tax in 1998 than in 1992.
C. The individuals had paid more tax than did enterprises during this period.
D. Income before tax has significantly decreased since 1992.
E. The number of tax evaders rose sharply between 1992 and 1998.
D. Income before tax has significantly decreased since 1992 -- figured out that if the income reduced since 1992, to keep up with the same level of tax, the percentage of income taxed should move up and that explains the increase in the tax %.
Hence option C should be the answer.
Option A, B and E was easy to eliminate because of straight forward logic.
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Re: CR Resolve the Paradox Percentages [#permalink]
16 Mar 2011, 03:35
We are looking for an option that says that lesser total amount of support was provided (since less no of people were unemployed) in 1998 than in 1992. If per dollar of tax more cents were taken, the total amount of dollars should decrease from 1992 to 1998 to make the product lesser. i.e. if 8 % of Y< 5 % of X, clearly Y should be less than X. So any option which says less total tax was collected in 1998 than that collected in 1992 is correct. Lets check: B says directly that less tax was paid in 1998, E says tax evaders were more in 1998 which can imply that total tax collected decreased, and D says that income itself decreased, which means tax wouls have decreased too. B, E, D eliminated. A says that the support provided per person was more in 1998- this provides for less no . of people to support- as the product which is total support would still remain as much or more in 1992. thus it supports too.