Find all School-related info fast with the new School-Specific MBA Forum

It is currently 18 May 2013, 15:03
Customize  |  Hide

To improve the long-term savings rate of the citizens of

  Question banks Downloads My Bookmarks Reviews  
Author Message
TAGS:
Manager
Manager
Joined: 27 Oct 2009
Posts: 155
Location: Montreal
Schools: Harvard, Yale, HEC
Followers: 1

Kudos [?]: 2 [0], given: 18

To improve the long-term savings rate of the citizens of [#permalink] New post 08 Oct 2010, 15:59
00:00

Question Stats:

81% (02:05) correct 18% (01:33) wrong based on 5 sessions
To improve the long-term savings rate of the citizens of Levaska, the country's legislature decided to implement a plan that allows investors to save up to $1,000 per year in special accounts without paying taxes on the interest earned unless withdrawals are made before the investor reaches age sixty-five. Withdrawals from these accounts prior to age sixty-five would result in the investor's having to pay taxes on all the accumulated interest at the time of withdrawal.

Which of the following, if true, most strongly supports the prediction that the legislature's plan will have its intended effect?

A. The money saved in the tax-free savings accounts will be deposited primarily in those banks and financial institutions that supported the legislation instituting the plan.
B. The majority of people choosing to take advantage of the tax-free savings accounts will withdraw their money prior to age sixty-five.
C. A significant number of the citizens of Levaska will invest in the tax-free savings accounts well before they reach the age of sixty-five.
D. During the ten years prior to implementation of the plan, Levaskans deposited an increasingly smaller percentage of their annual income in long-term savings accounts.
E. People who are not citizens of Levaska are not eligible to invest in the tax-free savings accounts, even if their income is taxable in Levaska.
[Reveal] Spoiler: OA
Senior Manager
Senior Manager
User avatar
Status: Time to step up the tempo
Joined: 24 Jun 2010
Posts: 420
Location: Milky way
Schools: ISB, Tepper - CMU, Chicago Booth, LSB
Followers: 6

Kudos [?]: 75 [0], given: 50

GMAT Tests User
Re: Different Levaska Question [#permalink] New post 08 Oct 2010, 16:27
ezinis wrote:
To improve the long-term savings rate of the citizens of Levaska, the country's legislature decided to implement a plan that allows investors to save up to $1,000 per year in special accounts without paying taxes on the interest earned unless withdrawals are made before the investor reaches age sixty-five. Withdrawals from these accounts prior to age sixty-five would result in the investor's having to pay taxes on all the accumulated interest at the time of withdrawal.

Which of the following, if true, most strongly supports the prediction that the legislature's plan will have its intended effect?

A. The money saved in the tax-free savings accounts will be deposited primarily in those banks and financial institutions that supported the legislation instituting the plan.
B. The majority of people choosing to take advantage of the tax-free savings accounts will withdraw their money prior to age sixty-five.
C. A significant number of the citizens of Levaska will invest in the tax-free savings accounts well before they reach the age of sixty-five.
D. During the ten years prior to implementation of the plan, Levaskans deposited an increasingly smaller percentage of their annual income in long-term savings accounts.
E. People who are not citizens of Levaska are not eligible to invest in the tax-free savings accounts, even if their income is taxable in Levaska.


Straight forward. Option C is correct.

Reasons: POE method.

A - New information provided. Out of scope.
B - This would weaken the prediction.
D - Out of scope.
E - Out of scope or not relevant.
_________________

:good Support GMAT Club by putting a GMAT Club badge on your blog :thanks

Intern
Intern
User avatar
Status: it won't happen in one day but it'll happen one day
Joined: 22 May 2010
Posts: 43
Followers: 1

Kudos [?]: 3 [0], given: 4

Re: Different Levaska Question [#permalink] New post 08 Oct 2010, 21:28
A pretty Obvious ans:
[Reveal] Spoiler:
C

_________________

Life is all about ass; you're either covering it, laughing it off, kicking it, kissing it, busting it, trying to get a piece of it, or behaving like one.

Manager
Manager
User avatar
Joined: 08 Sep 2010
Posts: 242
Location: India
WE 1: 6 Year, Telecom(GSM)
Followers: 3

Kudos [?]: 39 [0], given: 21

GMAT Tests User
Re: Different Levaska Question [#permalink] New post 09 Oct 2010, 03:27
It was obvious but i wasted my 2 min. :roll:
Manager
Manager
Joined: 25 Jul 2011
Posts: 50
Location: United Kingdom
Concentration: Finance, Strategy
Schools: Schulich (A)
GMAT 1: 660 Q49 V31
GPA: 3.13
Followers: 1

Kudos [?]: 7 [0], given: 7

Re: Different Levaska Question [#permalink] New post 31 Jul 2011, 04:19
can somebody explain me why option D is out of scope?
Manager
Manager
User avatar
Affiliations: The Earth organization, India
Joined: 25 Dec 2010
Posts: 196
WE 1: SAP consultant-IT 2 years
WE 2: Entrepreneur-family business 2 years
Followers: 4

Kudos [?]: 8 [0], given: 12

GMAT Tests User
Re: Different Levaska Question [#permalink] New post 27 Aug 2011, 04:46
UtterNonsense wrote:
can somebody explain me why option D is out of scope?



D. During the ten years prior to implementation of the plan, Levaskans deposited an increasingly smaller percentage of their annual income in long-term savings accounts.

Hello,

Option D is kind of forcing us to make an additional assumption that since people used to deposit lesser money in previous years, they will suddenly start depositing more after the new policy by the govt. But be careful we don't have enough info to make this assumption.

I would not call it out of scope. Just a good trap answer.
_________________

Cheers !!

Quant 47-Striving for 50
Verbal 34-Striving for 40

Manager
Manager
Joined: 09 Jun 2011
Posts: 147
Followers: 0

Kudos [?]: 4 [0], given: 1

Re: Different Levaska Question [#permalink] New post 27 Aug 2011, 11:18
Little confused here..

But with C, how can we guarantee that people will not withdraw any money from the bank and in turn making the plan effective..That is not stated in the answer..The plan would become effective if people invest before 65 and not withdraw until 65..

That was my method of eliminating C..
Manager
Manager
User avatar
Status: want to get 720+in GMAT
Joined: 13 Mar 2011
Posts: 55
Followers: 1

Kudos [?]: 26 [0], given: 0

Re: Different Levaska Question [#permalink] New post 28 Aug 2011, 10:03
nothing else fits here except C....so for me its C
_________________

Aim 720+

Manager
Manager
Joined: 03 Mar 2010
Posts: 51
Followers: 0

Kudos [?]: 1 [0], given: 59

Re: Different Levaska Question [#permalink] New post 02 Sep 2011, 14:08
OptimusPrimea1 wrote:
Little confused here..
i was also trapped btw C, E but i think C has more logically explanation. First govt objective is to increase long term savings rates and that is only possible when will invest in this plan and also by not withdrawing money before expiry. so if some one wants to invest and make money will invest before he turns 65 and save tax of atleast $1000 a year and C also says that significant number of ppl will invest.

i hope this helps u out.


But with C, how can we guarantee that people will not withdraw any money from the bank and in turn making the plan effective..That is not stated in the answer..The plan would become effective if people invest before 65 and not withdraw until 65..

That was my method of eliminating C..
Intern
Intern
Joined: 19 Jun 2011
Posts: 2
Followers: 0

Kudos [?]: 0 [0], given: 0

Re: Different Levaska Question [#permalink] New post 02 Sep 2011, 14:19
By the process of elimination got C!
Intern
Intern
Joined: 31 May 2010
Posts: 39
Schools: ESADE, IE
Followers: 0

Kudos [?]: 1 [0], given: 2

Re: Different Levaska Question [#permalink] New post 02 Sep 2011, 18:41
C seems to be the best among all/
Manager
Manager
Joined: 10 Jan 2011
Posts: 238
Location: India
GMAT Date: 07-16-2012
GPA: 3.4
WE: Consulting (Consulting)
Followers: 0

Kudos [?]: 24 [0], given: 20

Reviews Badge
Re: Different Levaska Question [#permalink] New post 16 Sep 2011, 02:14
C is the only possible answer....is this 700 question I have my own doubts
_________________

-------Analyze why option A in SC wrong-------

Senior Manager
Senior Manager
User avatar
Status: MBAing!!!!
Joined: 24 Jun 2011
Posts: 314
Location: United States (FL)
Concentration: Finance, Real Estate
GPA: 3.65
WE: Project Management (Real Estate)
Followers: 5

Kudos [?]: 41 [0], given: 56

GMAT Tests User
Re: Different Levaska Question [#permalink] New post 16 Sep 2011, 15:47
I picked C...I felt tempted by D.
Manager
Manager
Status: Retaking next month
Affiliations: None
Joined: 05 Mar 2011
Posts: 232
Location: India
Concentration: Marketing, Entrepreneurship
GMAT 1: 570 Q42 V27
GPA: 3.01
WE: Sales (Manufacturing)
Followers: 3

Kudos [?]: 12 [0], given: 32

Re: Different Levaska Question [#permalink] New post 16 Sep 2011, 20:11
Got C basically by POE.
Manager
Manager
Status: Retaking next month
Affiliations: None
Joined: 05 Mar 2011
Posts: 232
Location: India
Concentration: Marketing, Entrepreneurship
GMAT 1: 570 Q42 V27
GPA: 3.01
WE: Sales (Manufacturing)
Followers: 3

Kudos [?]: 12 [0], given: 32

Re: Different Levaska Question [#permalink] New post 16 Sep 2011, 20:12
GMATPASSION wrote:
Got C basically by POE.


Took me 2:37.
Manager
Manager
Joined: 01 Jun 2011
Posts: 177
Followers: 1

Kudos [?]: 9 [0], given: 6

GMAT Tests User
Re: Different Levaska Question [#permalink] New post 18 Sep 2011, 02:15
I pick D
Senior Manager
Senior Manager
Joined: 09 Jun 2010
Posts: 456
Followers: 0

Kudos [?]: 14 [0], given: 39

GMAT Tests User
Re: Different Levaska Question [#permalink] New post 20 Sep 2011, 19:29
bblast wrote:
UtterNonsense wrote:
can somebody explain me why option D is out of scope?



D. During the ten years prior to implementation of the plan, Levaskans deposited an increasingly smaller percentage of their annual income in long-term savings accounts.

Hello,

Option D is kind of forcing us to make an additional assumption that since people used to deposit lesser money in previous years, they will suddenly start depositing more after the new policy by the govt. But be careful we don't have enough info to make this assumption.

I would not call it out of scope. Just a good trap answer.


what make this question hard?
first, it is long answer choices and we spend more time to read long answer choices.
the trap answer D is explained wonderfully by you.

what I wish to know is WEATHER TRAP ANSWER INDUCE US TO MAKE AN ASSUMPTION AND TO BE WRONG.

if we know this kind of thinking of gmat, we can realize the trap in the test condition more easily.
Manager
Manager
User avatar
Status: Target MBA
Joined: 20 Jul 2010
Posts: 214
Location: Singapore
Followers: 0

Kudos [?]: 4 [0], given: 12

GMAT Tests User
Re: Different Levaska Question [#permalink] New post 27 Sep 2011, 09:15
ezinis wrote:
To improve the long-term savings rate of the citizens of Levaska, the country's legislature decided to implement a plan that allows investors to save up to $1,000 per year in special accounts without paying taxes on the interest earned unless withdrawals are made before the investor reaches age sixty-five. Withdrawals from these accounts prior to age sixty-five would result in the investor's having to pay taxes on all the accumulated interest at the time of withdrawal.

Which of the following, if true, most strongly supports the prediction that the legislature's plan will have its intended effect?

A. The money saved in the tax-free savings accounts will be deposited primarily in those banks and financial institutions that supported the legislation instituting the plan.
B. The majority of people choosing to take advantage of the tax-free savings accounts will withdraw their money prior to age sixty-five.
C. A significant number of the citizens of Levaska will invest in the tax-free savings accounts well before they reach the age of sixty-five.
D. During the ten years prior to implementation of the plan, Levaskans deposited an increasingly smaller percentage of their annual income in long-term savings accounts.
E. People who are not citizens of Levaska are not eligible to invest in the tax-free savings accounts, even if their income is taxable in Levaska.


I got C by POE
_________________

Thanks and Regards,
GM.

Senior Manager
Senior Manager
User avatar
Status: Kick Ass Gmat
Affiliations: Trained Stage Actor,First aider,Swimmer,Sketch artist,Writer
Joined: 28 Jun 2011
Posts: 390
Location: India
Concentration: Finance, General Management
GMAT Date: 12-24-2013
GPA: 3.5
WE: Consulting (Human Resources)
Followers: 10

Kudos [?]: 24 [0], given: 29

Re: Different Levaska Question [#permalink] New post 27 Sep 2011, 14:22
C
_________________

Dont look for the wrong thing that you have done rather find remedies.

Indian Bschools Accepting Gmat--> indian-b-schools-accepting-gmat-scores-82525.html

My Gmat Daily Diary--> how-much-time-should-i-spend-120796.html

All Gmat Practice CAT's-->http://gmatclub.com/forum/all-gmat-cat-practice-tests-links-prices-reviews-77460.html


Mba Ranking 2013--> all-2013-mba-rankings-99812.html

How to Convert Indian GPA/ Percentage to US 4 pt. GPA scale--> how-to-convert-indian-gpa-percentage-to-us-4-pt-gpa-scale-124249.html

GMAT MATH BOOK in downloadable PDF format --> gmat-math-book-in-downloadable-pdf-format-130609.html

POWERSCORE CRITICAL REASONING BIBLE - FULL CHAPTER NOTES --> powerscore-critical-reasoning-bible-full-chapter-notes-115864.html

Result correlation between GMAT and GMAT Club's Tests -->http://gmatclub.com/forum/result-correlation-between-gmat-and-gmat-club-s-tests-30989.html

Best GMAT Stories - Period! --> best-gmat-stories-period-98512.html

----
---
--
-

Kick Ass Gmat

Verbal GMAT Forum Moderator
Verbal GMAT Forum Moderator
User avatar
Status: Preparing for the another shot...!
Joined: 03 Feb 2011
Posts: 1322
Location: India
Concentration: Finance, Marketing
GMAT 1: 720 Q V
GPA: 3.75
Followers: 63

Kudos [?]: 311 [0], given: 52

GMAT ToolKit User GMAT Tests User CAT Tests
Re: Different Levaska Question [#permalink] New post 09 Oct 2011, 02:14
was initially confused b/w C and D...
but after careful examination, i chose C...
D is a deadly trap
_________________

Prepositional Phrases Clarified|Elimination of BEING| Absolute Phrases Clarified
Rules For Posting

Re: Different Levaska Question   [#permalink] 09 Oct 2011, 02:14
    Similar topics Author Replies Last post
Similar
Topics:
New posts 4. Stable interest rates on long-term bonds are the batliwala 4 08 Apr 2004, 04:20
New posts EXPERTS_POSTS_IN_THIS_TOPIC Stable interest rates on long-term bonds are the financial tarek99 5 13 Mar 2008, 09:44
New posts Stable interest rates on long-term bonds are the financial nik1608nik 3 02 Jul 2009, 11:22
New posts To improve the long-term savings rate of the citizens of Baten80 1 06 Jul 2011, 09:42
New posts 1 Stable interest rates on long-term bonds are the financial eybrj2 4 06 Mar 2012, 23:37
Display posts from previous: Sort by

To improve the long-term savings rate of the citizens of

  Question banks Downloads My Bookmarks Reviews  

Go to page    1   2    Next  [ 38 posts ] 



GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.