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Party spokesperson: The opposition party s proposal to

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Party spokesperson: The opposition party s proposal to [#permalink] New post 05 Aug 2009, 13:09
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Party spokesperson: The opposition party’s proposal to stimulate economic activity in the province by refunding $600 million in provincial taxes to taxpayers, who could be expected to spend the money, envisions an illusory benefit. Since the province’s budget is required to be in balance, either new taxes would be needed to make up the shortfall, in which case the purpose of the refund would be defeated, or else workers for the province would be dismissed. So either the province’s taxpayers or its workers, who are also residents of the province, will have the $600 million to spend, but there can be no resulting net increase in spending to stimulate the province’s economy.

The conclusion about whether there would be a resulting net increase in spending would not follow if the
(A) taxpayers of the province would spend outside the province at least $300 million of any $600 million refunded to them
(B) taxpayers of the province would receive any refund in partial payments during the year rather than in a lump sum
(C) province could assess new taxes in a way that would avoid angering taxpayers
(D) province could instead of refunding the money, stimulate its economy by redirecting its spending to use the $600 million for construction projects creating jobs around the province
(E) province could keep its workers and use them more effectively with a resulting savings of $600 million in its out-of-province expenditures
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Re: Economic activity [Diff. 9/10] [#permalink] New post 05 Aug 2009, 13:37
[EDIT - REMOVED BY THE USER]

Last edited by nplaneta on 17 Jun 2012, 19:06, edited 1 time in total.
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Re: Economic activity [Diff. 9/10] [#permalink] New post 05 Aug 2009, 17:32
good Question, I would go for E

(A) taxpayers of the province would spend outside the province at least $300 million of any $600 million refunded to them - this would cause a net decrease. ie no net increase, agrees with the passage's conclusion incorrect
(B) taxpayers of the province would receive any refund in partial payments during the year rather than in a lump sum - doesn't make a difference, still returning the money to the taxpayers, doesn't explain how this would not affect state's budget incorrect
(C) province could assess new taxes in a way that would avoid angering taxpayers - still a no net increase in the economy
(D) province could instead of refunding the money, stimulate its economy by redirecting its spending to use the $600 million for construction projects creating jobs around the province - still didn't say where this $600 million is going to come from
(E) province could keep its workers and use them more effectively with a resulting savings of $600 million in its out-of-province expenditures - this would decrease the out of state spendings, which brings money into the state, which increases the economy..correct
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Re: Economic activity [Diff. 9/10] [#permalink] New post 06 Aug 2009, 00:33
E ..

whats the OA?
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Re: Economic activity [Diff. 9/10] [#permalink] New post 06 Aug 2009, 01:25
What is wrong with D? IMO D is the answer..
E looks very strong to me.. but please lemme know a strong reason to eliminate D..
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Re: Economic activity [Diff. 9/10] [#permalink] New post 06 Aug 2009, 06:43
atomy wrote:
What is wrong with D? IMO D is the answer..
E looks very strong to me.. but please lemme know a strong reason to eliminate D..


I eliminated D because it still didn't mention where the 600 million is coming from, if it is coming from the tax payers then get injected back into the economy via work opportunities, then there will still be a 0 net increase in the economy of the state
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Re: Economic activity [Diff. 9/10] [#permalink] New post 06 Aug 2009, 07:32
OA is E
Re: Economic activity [Diff. 9/10]   [#permalink] 06 Aug 2009, 07:32
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