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# Canadians now increasingly engage in out-shopping, which is

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Intern
Joined: 26 Jun 2009
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Updated on: 24 Sep 2017, 23:21
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Difficulty:

85% (hard)

Question Stats:

49% (02:02) correct 51% (02:04) wrong based on 916 sessions

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Canadians now increasingly engage in “out-shopping,” which is shopping across the national border, where prices are lower. Prices are lower outside of Canada in large part because the goods-and-services tax that pays for Canadian social services is not applied.

Which one of the following is best supported on the basis of the information above?

(A) If the upward trend in out-shopping continues at a significant level and the amounts paid by the government for Canadian social services are maintained, the Canadian goods-and-services tax will be assessed at a higher rate.

(B) If Canada imposes a substantial tariff on the goods bought across the border, a reciprocal tariff on cross-border shopping in the other direction will be imposed, thereby harming Canadian businesses.

(C) The amounts the Canadian government pays out to those who provide social services to Canadians are increasing.

(D) The same brands of goods are available to Canadian shoppers across the border as are available in Canada.

(E) Out-shopping purchases are subject to Canadian taxes when the purchaser crosses the border to bring them into Canada

Originally posted by skg on 10 Sep 2009, 11:40.
Last edited by broall on 24 Sep 2017, 23:21, edited 2 times in total.
Manager
Joined: 07 Jul 2009
Posts: 174

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10 Sep 2009, 12:12
IMO A. If amounts paid by the government for Canadian social services are maintained and out-shopping increases then revenue from goods-and-services tax will be decreased, so to compensate for loss government has to increase goods-and-services tax.
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10 Sep 2009, 12:41
skg wrote:
Canadians now increasingly engage in “out-shopping,” which is shopping across the national border, where prices are lower. Prices are lower outside of Canada in large part because the goods-and-services tax that pays for Canadian social services is not applied.

Which one of the following is best supported on the basis of the information above?

(A) If the upward trend in out-shopping continues at a significant level and the amounts paid by the government for Canadian social services are maintained, the Canadian goods-and-services tax will be assessed at a higher rate.

(B) If Canada imposes a substantial tariff on the goods bought across the border, a reciprocal tariff on cross-border shopping in the other direction will be imposed, thereby harming Canadian businesses.

(C) The amounts the Canadian government pays out to those who provide social services to Canadians are increasing.

(D) The same brands of goods are available to Canadian shoppers across the border as are available in Canada.

(E) Out-shopping purchases are subject to Canadian taxes when the purchaser crosses the border to bring them into Canada

I go for A. All other choices are irrevalant.

(A) Most likely....
(B) Nothing is said about ------ a reciprocal tariff on cross-border shopping in the other direction will be imposed.
(C) Definitely not with the decreasing tax amount.
(D) Nothing is mentioned about - brands.
(E) Also not mentioned..........
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Manager
Joined: 23 Jun 2009
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15 Sep 2009, 17:19
GMAT TIGER wrote:
skg wrote:
Canadians now increasingly engage in “out-shopping,” which is shopping across the national border, where prices are lower. Prices are lower outside of Canada in large part because the goods-and-services tax that pays for Canadian social services is not applied.

Which one of the following is best supported on the basis of the information above?

(A) If the upward trend in out-shopping continues at a significant level and the amounts paid by the government for Canadian social services are maintained, the Canadian goods-and-services tax will be assessed at a higher rate.

(B) If Canada imposes a substantial tariff on the goods bought across the border, a reciprocal tariff on cross-border shopping in the other direction will be imposed, thereby harming Canadian businesses.

(C) The amounts the Canadian government pays out to those who provide social services to Canadians are increasing.

(D) The same brands of goods are available to Canadian shoppers across the border as are available in Canada.

(E) Out-shopping purchases are subject to Canadian taxes when the purchaser crosses the border to bring them into Canada

I go for A. All other choices are irrevalant.

(A) Most likely....
(B) Nothing is said about ------ a reciprocal tariff on cross-border shopping in the other direction will be imposed.
(C) Definitely not with the decreasing tax amount.
(D) Nothing is mentioned about - brands.
(E) Also not mentioned..........

"D" for me. If similar products are not available across the border why would people engage in out-shopping?
Senior Manager
Joined: 16 Apr 2009
Posts: 256

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17 Sep 2009, 19:20
I will go with A

D looks incorrect as nothing is mentioned about the brands and it is not necessary that shoppers will buy things only if same brands are available
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Joined: 15 Sep 2009
Posts: 7
Location: London

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18 Sep 2009, 08:00
A
This is a disguised INFERENCE problem. If Canadians INCREASINGLY engage in out-shopping then the Canadian government would have to increase the tax to maintain the same level of service.
Senior Manager
Joined: 18 Aug 2009
Posts: 275

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18 Sep 2009, 08:19
I will go with D.

According to the information given in question, canadians buy the good from outside to avoid the taxes. That means it is quite possible that the same goods are available in Canada too.
Intern
Joined: 14 Jul 2009
Posts: 21

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18 Sep 2009, 20:11
IMO A is the answer. The only answer could have been B but we cannot say anything about the taxes on the region 'outside' Canada from where the things are being imported.
Manager
Joined: 23 Jun 2009
Posts: 97

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18 Sep 2009, 21:15
1
aagar2003 wrote:
IMO A is the answer. The only answer could have been B but we cannot say anything about the taxes on the region 'outside' Canada from where the things are being imported.

Increase in taxes is a mere speculation .It can't be derived from the argument. IMO "D". If similar goods are not available across the border why would anybody engage in out-shopping?
Intern
Joined: 14 Jul 2009
Posts: 21

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18 Sep 2009, 21:25
Casinoking wrote:
aagar2003 wrote:
IMO A is the answer. The only answer could have been B but we cannot say anything about the taxes on the region 'outside' Canada from where the things are being imported.

Increase in taxes is a mere speculation .It can't be derived from the argument. IMO "D". If similar goods are not available across the border why would anybody engage in out-shopping?

I agree with you. D seems correct.
Senior Manager
Joined: 16 Apr 2009
Posts: 256

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22 Sep 2009, 18:25
aagar2003 wrote:
Casinoking wrote:
aagar2003 wrote:
IMO A is the answer. The only answer could have been B but we cannot say anything about the taxes on the region 'outside' Canada from where the things are being imported.

Increase in taxes is a mere speculation .It can't be derived from the argument. IMO "D". If similar goods are not available across the border why would anybody engage in out-shopping?

I agree with you. D seems correct.

Note : Option D is asking about brands of goods not the actual goods
I agree that if same goods are not available , no one will probably buy , however even if same brands of goods are not available,people will still buy the goods
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22 Sep 2009, 22:42
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A&D are close but like to chose D

because D proves that we get the same standard and same brand clothes in both the place
he wanted to tell Brand is not a factor to decide the place of shopping indirectly supporting the conclusion
Manager
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10 Oct 2009, 08:42
3
Canadians now increasingly engage in “out-shopping,” which is shopping across the national border, where prices are lower. Prices are lower outside of Canada in large part because the goods-and-services tax that pays for Canadian social services is not applied.

Which one of the following is best supported on the basis of the information above?
(A) If the upward trend in out-shopping continues at a significant level and the amounts paid by the government for Canadian social services are maintained, the Canadian goods-and-services tax will be assessed at a higher rate.
(B) If Canada imposes a substantial tariff on the goods bought across the border, a reciprocal tariff on cross-border shopping in the other direction will be imposed, thereby harming Canadian businesses.
(C) The amounts the Canadian government pays out to those who provide social services to Canadians are increasing.
(D) The same brands of goods are available to Canadian shoppers across the border as are available in Canada.
(E) Out-shopping purchases are subject to Canadian taxes when the purchaser crosses the border to bring them into Canada.

Manager
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Joined: 29 Jun 2009
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10 Oct 2009, 14:21
4
I'm going with A

Social Services are paid through GST. GST = Sales *X%. If Social Services stay the same and the amount of Sales decreases the only way to pay for social services is to increase the % charged on the remaining sales.
Intern
Joined: 23 Apr 2008
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10 Oct 2009, 15:43
on the basis of the information given i would go with d : canadian shoppers are getting the same brands outside the border.
Intern
Joined: 28 Aug 2009
Posts: 49

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11 Oct 2009, 09:32
1
IMO E..from the info given on people going outside Canada for shopping and govt. applying tax in the inside Canada...v cn legitimately conclude E.
IMO D talks about brands availble vich is out of scope.
A is also close but its conditional...so E is the best option in IMO.

OA pls
Manager
Joined: 16 Jul 2009
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11 Oct 2009, 12:38
Thanks all for the participation! The OA is A. I believe the reasoning given by hogann is logical.. The reasoning clearifies why we should choose option A over other options..
Intern
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12 Oct 2009, 05:17
1
Hi,
The reasoning provided by hogann is correct but pls let me know wts wrng in E?..we cn conclude E logically ....
pls correct me if i m wrong!
Manager
Joined: 29 Jul 2009
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12 Oct 2009, 08:48
Answer (E) states that "Out-shopping purchases are subject to Canadian taxes when the purchaser crosses the border to bring them into Canada". If that statement is true then people would not engage in out-shopping purchases since when they go back to Canada they will have to pay taxes anyways, which completely kills the reason why they would engage in out-shopping in the first place. Therefore E is wrong.
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Status: Been a long time guys...
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Location: United States (NY)
Concentration: Finance, Marketing
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21 Oct 2012, 06:40
Indeed a tough question, considering its words, and must say indeed a great explanation by hogann.
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Re: Canadians now increasingly engage in out-shopping, which is &nbs [#permalink] 21 Oct 2012, 06:40

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