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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, 12:09
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A
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E

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0% (00:00) correct 100% (02:18) wrong based on 0 sessions
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, 12:37
[EDIT - REMOVED BY THE USER]

Last edited by nplaneta on 17 Jun 2012, 18:06, edited 1 time in total.
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Re: Economic activity [Diff. 9/10] [#permalink] New post 05 Aug 2009, 16:32
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 05 Aug 2009, 23:33
E ..

whats the OA?
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Re: Economic activity [Diff. 9/10] [#permalink] New post 06 Aug 2009, 00:25
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, 05:43
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, 06:32
OA is E
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Re: Economic activity [Diff. 9/10] [#permalink] New post 26 Dec 2013, 16:56
sprtng wrote:
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

I know I am moving away from the wind(of option answers here). But would like more comments on this question and my approach.

I think of this question as very smartly drafted question.. Double negative played here as per my observation.
Conclusion: No resulting net increase in spending will happen(600m spend to happen in province to boost the economy, but it will not go to boost the economy.. )
Question stem says: The conclusion about whether there would be resulting net increase in spendingwould not follow if:
Thus it is a weaker question stem owing to "would not follow" qualifying the conclusion. Since, argument say that there will be no net increase in spending, so we have to look for choices which go for scenarios with increase in or equal to net spending of 600 m.

Before getting into choices, let me define net spending.
Net spending for province's economy= Spend by province residents -Spend by govt
Net spend should increase with Spend by province residents

A) Looks good to me. Spend by province residents = 300m(Only this amount available for province as rest of 300m is invested outside the province)
Net spending for province's economy= 300m - 600m =-300m
This means that there would in fact be a deficit of $300m, if money is invested outside province, so it should be difficult to get a net increase in province's economy. Looks like a weakener to me. Will keep it.
B)Agree...The timing of release of funds shouldn't really matter. So a clear loser choice.
C)Agree.. The introduction of new taxes is irrelevant to this choice as the argument conclusion is around 600m released by govt to province's junta. Irrelevant as it moves away from conclusion that money will be available to people for spending.
D) Same as C
E) Now, a weaker can attack a fact which this choice does. So it says, keep the workers. This will mean that either new taxes will come or purpose of refund will get defeated or spending of $600m will not happen. Since, the choice doesn't talk about new taxes, I am not perfectly sure about this choice. But, savings in $600m in out-of-province expenditures will indirectly reduce "Spend by govt" part of equation to zero.
Spending by govt = 600m(initially planned to be given to people) - 600m(savings from out-of-province expenditures)=0-------------------i
Net spending for province's economy= Spend by province residents(0 as govt didnt release the money) -Spend by govt(0 from above equation i)

I am split between A & E. Need some assistance and feedback guys.
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Re: Party spokesperson: The opposition party s proposal to [#permalink] New post 28 Dec 2013, 08:12
hi Josh,

Let me see if I can help.

Firstly, if i'm being honest I think you've over complicated...

The conclusion is: The policy suggested would not increase spending money.

The question is. Which evidence would contradict this

A actually would give them less money (i.e. not contradict)

If the gov't gives out 600m, but only gets 300m back, it is 300m worse off.

James
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Re: Party spokesperson: The opposition party s proposal to   [#permalink] 28 Dec 2013, 08:12
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