It is currently 29 Jun 2017, 07:51

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

A law passed in Rockville three years ago allows a 30% tax

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

2 KUDOS received
Manager
Manager
avatar
Joined: 21 May 2011
Posts: 239
A law passed in Rockville three years ago allows a 30% tax [#permalink]

Show Tags

New post 10 Jul 2011, 12:50
2
This post received
KUDOS
5
This post was
BOOKMARKED
00:00
A
B
C
D
E

Difficulty:

  75% (hard)

Question Stats:

51% (02:29) correct 49% (01:34) wrong based on 414 sessions

HideShow timer Statistics

A law passed in Rockville three years ago allows a 30% tax credit to consumers who purchase a newly constructed home. The tax credit was intended to stimulate the local economy by creating a higher demand for new houses and spurring the creation of jobs in construction and design. However, since the law was passed, the growth in sales of newly constructed homes has dropped each year, from 15% to 10% to 5%. Obviously, this law has had little or no effect on the sale of newly constructed homes.

Which of the following must be true if the above conclusion is to be properly drawn?

New house sales are directly tied to personal income.
New house sales cannot increase by more than 6% next year.
If the tax credit had been 50%, there would have been a larger increase in new house sales
Without the tax credit, new house sales would not have been significantly lower.
Tax credits for specific purchases are usually ineffective in influencing consumers to make those purchases.
[Reveal] Spoiler: OA
Current Student
avatar
Joined: 26 May 2005
Posts: 563
Re: CR - Assumption 700 level [#permalink]

Show Tags

New post 10 Jul 2011, 13:14
bschool83 wrote:
A law passed in Rockville three years ago allows a 30% tax credit to consumers who purchase a newly constructed home. The tax credit was intended to stimulate the local economy by creating a higher demand for new houses and spurring the creation of jobs in construction and design. However, since the law was passed, the growth in sales of newly constructed homes has dropped each year, from 15% to 10% to 5%. Obviously, this law has had little or no effect on the sale of newly constructed homes.

Which of the following must be true if the above conclusion is to be properly drawn?

New house sales are directly tied to personal income.
New house sales cannot increase by more than 6% next year.
If the tax credit had been 50%, there would have been a larger increase in new house sales
Without the tax credit, new house sales would not have been significantly lower.
Tax credits for specific purchases are usually ineffective in influencing consumers to make those purchases.


D it is
we need an answer that says the drop wouldn't have been even worse without the tax credit
1 KUDOS received
Senior Manager
Senior Manager
avatar
Joined: 17 May 2010
Posts: 290
GMAT 1: 710 Q47 V40
Re: CR - Assumption 700 level [#permalink]

Show Tags

New post 13 Jul 2011, 07:21
1
This post received
KUDOS
I say D. The author is assuming that without the tax credit, the sales would have been similar, not worse than the sales figure now.
_________________

If you like my post, consider giving me KUDOS!

Manager
Manager
User avatar
Joined: 14 Feb 2010
Posts: 160
Location: Banaglore
Re: CR - Assumption 700 level [#permalink]

Show Tags

New post 14 Jul 2011, 00:53
Can some one please explain why E is incorrect?
1 KUDOS received
Intern
Intern
avatar
Status: Applying in Round 2
Joined: 17 Mar 2011
Posts: 21
Concentration: Finance, Accounting
Schools: Stern '14
GMAT 1: 660 Q49 V31
Re: CR - Assumption 700 level [#permalink]

Show Tags

New post 20 Jul 2011, 22:22
1
This post received
KUDOS
A law passed in Rockville three years ago allows a 30% tax credit to consumers who purchase a newly constructed home. The tax credit was intended to stimulate the local economy by creating a higher demand for new houses and spurring the creation of jobs in construction and design. However, since the law was passed, the growth in sales of newly constructed homes has dropped each year, from 15% to 10% to 5%. Obviously, this law has had little or no effect on the sale of newly constructed homes.

Which of the following must be true if the above conclusion is to be properly drawn?

New house sales are directly tied to personal income.
New house sales cannot increase by more than 6% next year.
If the tax credit had been 50%, there would have been a larger increase in new house sales
Without the tax credit, new house sales would not have been significantly lower.
[b]Addresses the conclusion assuming that decrease would not have been sharp if this was not the case
Tax credits for specific purchases are usually ineffective in influencing consumers to make those purchases.

Answer should be clearly D
Intern
Intern
avatar
Joined: 06 Jul 2011
Posts: 28
Re: CR - Assumption 700 level [#permalink]

Show Tags

New post 20 Jul 2011, 22:43
1
This post was
BOOKMARKED
zuberahmed wrote:
Can some one please explain why E is incorrect?


E - Tax credits for specific purchases are usually ineffective in influencing consumers to make those purchases.
    If we negate, tax credits are usually effective in influencing consumers. It doesn't hurt the argument. Key word here is usually. In reality, it's neither here nor there (is that a GMAT SC-type correct idiom? I haven't gotten there yet hehe). Sure, tax credits are usually effective, but maybe here they are or are not.

D- Without the tax credit, new house sales would not have been significantly lower.
    If we negate, new house sales would be significantly lower without the tax credit. The argument breaks down and the law has an equally significant effect. Thus, this is the correct answer. It must be true if the above conclusion is to be properly drawn.

_________________

GMAT Day: Nov. 19, 2011

Senior Manager
Senior Manager
avatar
Joined: 08 Jun 2010
Posts: 392
Location: United States
Concentration: General Management, Finance
GMAT 1: 680 Q50 V32
Re: CR - Assumption 700 level [#permalink]

Show Tags

New post 23 Jul 2011, 01:57
zuberahmed wrote:
Can some one please explain why E is incorrect?


Tax credits for specific purchases are usually ineffective in influencing consumers to make those purchases.

This statement has no bearing on the conclusion which is : Obviously, this law has had little or no effect on the sale of newly constructed homes.

But I believe if the assumption was :Tax credits for specific purchases are usually effective in influencing consumers to make those purchases. It might be an assumption, because if you negate it, the argument may fail if change effective back to ineffective.

My answer was D as well.
Senior Manager
Senior Manager
avatar
Joined: 11 Apr 2011
Posts: 266
GMAT ToolKit User
Re: CR - Assumption 700 level [#permalink]

Show Tags

New post 23 Jul 2011, 13:43
I chose E as well...stupid assumption questions lol. Whats the source?
_________________

Powerscore CR Bible Full Chapter Notes | Easily Extend Vocabulary List with Google Dictionary

Please kudo me if you found my post useful. Thanks!!! :)

GMAT Club Legend
GMAT Club Legend
User avatar
Joined: 01 Oct 2013
Posts: 10148
Premium Member
Re: A law passed in Rockville three years ago allows a 30% tax [#permalink]

Show Tags

New post 12 Nov 2014, 08:01
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
Chat Moderator
avatar
G
Joined: 04 Aug 2016
Posts: 484
Location: India
Concentration: Leadership, Strategy
GPA: 4
WE: Engineering (Telecommunications)
Premium Member CAT Tests
Re: A law passed in Rockville three years ago allows a 30% tax [#permalink]

Show Tags

New post 21 Sep 2016, 09:29
I did not follow the explanation provided. Can someone break it down please?
1 KUDOS received
Math Forum Moderator
User avatar
S
Status: QA & VA Forum Moderator
Joined: 11 Jun 2011
Posts: 2908
Location: India
GPA: 3.5
WE: Business Development (Commercial Banking)
GMAT ToolKit User Premium Member
Re: A law passed in Rockville three years ago allows a 30% tax [#permalink]

Show Tags

New post 21 Sep 2016, 13:18
1
This post received
KUDOS
warriorguy wrote:
I did not follow the explanation provided. Can someone break it down please?


Let's try -

Quote:
A law passed in Rockville three years ago allows a 30% tax credit to consumers who purchase a newly constructed home. The tax credit was intended to stimulate the local economy by creating a higher demand for new houses and spurring the creation of jobs in construction and design.


30% Tax credit for purchase of new House --------> Stimulating demand for new House ----> Creation of contract jobs.
|------------------------(A)------------------------------->-------------------(B)----------------------->-----------(C)----------------|

Quote:
However, since the law was passed, the growth in sales of newly constructed homes has dropped each year, from 15% to 10% to 5%. Obviously, this law has had little or no effect on the sale of newly constructed homes.


30% Tax credit for purchase of new House <--------- Demand for new House dropped
|------------------------(~A)---------------------------<-------------------(~B)----------------|


Check the negation logic used in the stimulus ( as depicted above) , hope this helps...

_________________

Thanks and Regards

Abhishek....

PLEASE FOLLOW THE RULES FOR POSTING IN QA AND VA FORUM AND USE SEARCH FUNCTION BEFORE POSTING NEW QUESTIONS

How to use Search Function in GMAT Club | Rules for Posting in QA forum | Writing Mathematical Formulas |Rules for Posting in VA forum | Request Expert's Reply ( VA Forum Only )

Manager
Manager
avatar
Joined: 24 Jul 2016
Posts: 90
Re: A law passed in Rockville three years ago allows a 30% tax [#permalink]

Show Tags

New post 21 Sep 2016, 13:49
I chose D, was confused between D and E


Sent from my iPhone using GMAT Club Forum mobile app
Manager
Manager
avatar
B
Joined: 24 Jan 2017
Posts: 93
Re: A law passed in Rockville three years ago allows a 30% tax [#permalink]

Show Tags

New post 15 May 2017, 18:42
I chose option (D), but just had a question: this is an inference question, right?
From question stems, I think this is an inference question. But when looking at above comments, I saw many ppl say this is an assumption question. Could anyone shed some light?
Manager
Manager
avatar
S
Joined: 17 Apr 2016
Posts: 105
Re: A law passed in Rockville three years ago allows a 30% tax [#permalink]

Show Tags

New post 17 May 2017, 20:02
The conclusion is :-

this law has had little or no effect on the sale of newly constructed homes.


If the conclusion says that the new law had little or no effect on the sale of the newly constructed homes, then how can Option D, which states that without the tax credit law, the sale would not have been significantly low be correct. The imposition of tax credit makes no difference in either its absence or presence.
Only E satisfies this implication.
Manager
Manager
avatar
S
Joined: 15 Jun 2016
Posts: 64
CAT Tests
Re: A law passed in Rockville three years ago allows a 30% tax [#permalink]

Show Tags

New post 27 May 2017, 10:52
Hello expert, could you please explain why option 'e' is wrong?
Expert Post
GMAT Club Verbal Expert
User avatar
S
Status: GMAT and GRE tutor
Joined: 13 Aug 2009
Posts: 631
Location: United States
GMAT 1: 780 Q51 V46
GMAT 2: 800 Q51 V51
GRE 1: 340 Q170 V170
Re: A law passed in Rockville three years ago allows a 30% tax [#permalink]

Show Tags

New post 02 Jun 2017, 14:53
VKat wrote:
Hello expert, could you please explain why option 'e' is wrong?

Quote:
(E) Tax credits for specific purchases are usually ineffective in influencing consumers to make those purchases.

The question asks, "Which of the following must be true if the above conclusion is to be properly drawn?" The conclusion is that the tax credit has had little or no effect on the sale of newly constructed homes. It doesn't matter whether tax credits are usually ineffective. If, on the other hand, tax credits are usually effective but do not influence consumers to purchase homes, the conclusion can still be properly drawn.
_________________

www.gmatninja.com (now hiring!) + blog

Join us for the verbal experts' live chat every Wednesday, 7:30 am PST/8:00 pm IST! Details available here.

Need an expert reply? Hit the request verbal experts' reply button -- and then please be specific about your question for us. Feel free to tag @GMATNinja and @GMATNinjaTwo in your post.

Verbal Experts' Topics of the Week:
Ultimate CR Guide for Beginners | Ultimate RC Guide for Beginners | Using LSAT for GMAT CR & RC | That "-ing" Word Probably Isn't a Verb | That "-ed" Word Might Not Be a Verb, Either | How to go from great (760) to incredible (780) on GMAT SC | No-BS Guide to GMAT Idioms | "Being" is not the enemy | All Topics of the Week

Rules for posting in verbal forum | How to use search function (before posting questions!) | GMAT Club's ultimate verbal study plan, 2017 edition

Re: A law passed in Rockville three years ago allows a 30% tax   [#permalink] 02 Jun 2017, 14:53
    Similar topics Author Replies Last post
Similar
Topics:
2 Ten years ago, the total share of federal, state, and local taxes rohan2345 6 17 May 2017, 22:39
19 Experts publish their posts in the topic The Fieldpark nuclear power plant, cited three years ago by a Harley1980 7 05 Feb 2017, 10:19
5 Ten years ago, the Salisbury City Council passed the Culinary Bill, ne tia2112 8 29 May 2016, 07:38
3 A law passed in Rockville three years ago allows a 30% tax psdeol 7 15 Jul 2016, 15:24
1 Under current federal law, employers are allowed to offer goalsnr 8 24 Jul 2016, 03:06
Display posts from previous: Sort by

A law passed in Rockville three years ago allows a 30% tax

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  


cron

GMAT Club MBA Forum Home| About| 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®.