Last visit was: 19 Nov 2025, 17:44 It is currently 19 Nov 2025, 17:44
Home
GMAT
Messages
Tests
Schools
Events
Rewards
Chat
My Profile
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.
Go to My Error Log Learn more
Close
Request Expert Reply
Confirm Cancel
Back to Forum
Create Topic
   1   2   3   
805+ Level|   Inference|               
User avatar
GMATNinja
User avatar
GMAT Club Verbal Expert
Joined: 13 Aug 2009
Last visit: 19 Nov 2025
Posts: 7,443
Own Kudos:
69,787
Given Kudos: 2,060
Status: GMAT/GRE/LSAT tutors
Location: United States (CO)
GMAT 1: 780 Q51 V46
GMAT 2: 800 Q51 V51
GRE 1: Q170 V170
GRE 2: Q170 V170
Products:
GMAT Club Tests Forum Quiz
Expert
Expert reply
GMAT 2: 800 Q51 V51
GRE 1: Q170 V170
GRE 2: Q170 V170
Posts: 7,443
Kudos: 69,787
Half of Metroburg's operating budget comes from a payroll tax of 2 per 03 Jul 2022, 09:04
Kudos
Add Kudos
Bookmarks
Bookmark this Post
muralis18
GMATNinja
Similar to the reasoning for option B, we can say that because the firm shifted outside the city, it is possible to lose jobs in the public sector which were depended on the private firm. So how can we say that the proportion of public sector jobs increased?

Let's say
Before - >
Private - 50 jobs
Public - 50 jobs
Proportion of public - 50/100 - 50%

After ->
Private - 49 jobs (since one firm went out of city)
Public - 40 jobs (10 lost jobs which were depended on private bank)
Proportion of public - 40/89 - 44% which has decreased and not increased.
Show more
Take another look at (E) as a whole:
Quote:
E) The company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector, unless it results in a contraction of the public-sector payroll.
Show more
As we've discussed in this post, (E) only makes a claim about what would happen if there ISN'T a decrease in public-sector jobs.

Is it possible that there will be such a decrease? Sure! But (E) doesn't apply to that scenario. Instead, it just says that UNLESS that happens, then the company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector.

In other words, your "after" scenario isn't a valid critique of (E), because (E) only talks about what would happen if public sector jobs don't decrease. That's why we can properly conclude (E) based on the info in the passage.

I hope that helps!
User avatar
Elite097
User avatar
Joined: 20 Apr 2022
Last visit: 08 Oct 2025
Posts: 771
Own Kudos:
553
Given Kudos: 346
Location: India
Schools: Sloan '25 Columbia '27 Haas '27
GPA: 3.64
Schools: Sloan '25 Columbia '27 Haas '27
Posts: 771
Kudos: 553
Half of Metroburg's operating budget comes from a payroll tax of 2 per 18 Dec 2022, 02:40
Kudos
Add Kudos
Bookmarks
Bookmark this Post
avigutman numerically how is it possible that tax from payroll is not reduced by 1% ? D seems right because if they reduce by 1% their salaries which also are 1% of total contribution will reduce

Posted from my mobile device
User avatar
avigutman
User avatar
Joined: 17 Jul 2019
Last visit: 30 Sep 2025
Posts: 1,293
Own Kudos:
1,931
Given Kudos: 66
Location: Canada
Schools: NYU Stern (WA)
GMAT 1: 780 Q51 V45
GMAT 2: 780 Q50 V47
GMAT 3: 770 Q50 V45
Expert
Expert reply
Schools: NYU Stern (WA)
GMAT 3: 770 Q50 V45
Posts: 1,293
Kudos: 1,931
Half of Metroburg's operating budget comes from a payroll tax of 2 per 18 Dec 2022, 15:13
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Elite097
avigutman numerically how is it possible that tax from payroll is not reduced by 1% ? D seems right because if they reduce by 1% their salaries which also are 1% of total contribution will reduce
Show more
Elite097 are you assuming that the average salary at the financial services company is exactly equal to the average salary of all people now employed in Metroburg?
User avatar
Elite097
User avatar
Joined: 20 Apr 2022
Last visit: 08 Oct 2025
Posts: 771
Own Kudos:
553
Given Kudos: 346
Location: India
Schools: Sloan '25 Columbia '27 Haas '27
GPA: 3.64
Schools: Sloan '25 Columbia '27 Haas '27
Posts: 771
Kudos: 553
Half of Metroburg's operating budget comes from a payroll tax of 2 per 19 Dec 2022, 12:40
Kudos
Add Kudos
Bookmarks
Bookmark this Post
avigutman
Elite097
avigutman numerically how is it possible that tax from payroll is not reduced by 1% ? D seems right because if they reduce by 1% their salaries which also are 1% of total contribution will reduce
Elite097 are you assuming that the average salary at the financial services company is exactly equal to the average salary of all people now employed in Metroburg?
Show more
Sorry im not sure why would i be assuming that? I mean it would depend on the number of people no? If possible could you pls express your argument by stating the formula in words for the logic you are implying avigutman
User avatar
avigutman
User avatar
Joined: 17 Jul 2019
Last visit: 30 Sep 2025
Posts: 1,293
Own Kudos:
1,931
Given Kudos: 66
Location: Canada
Schools: NYU Stern (WA)
GMAT 1: 780 Q51 V45
GMAT 2: 780 Q50 V47
GMAT 3: 770 Q50 V45
Expert
Expert reply
Schools: NYU Stern (WA)
GMAT 3: 770 Q50 V45
Posts: 1,293
Kudos: 1,931
Half of Metroburg's operating budget comes from a payroll tax of 2 per 19 Dec 2022, 18:18
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Elite097
avigutman

Elite097 are you assuming that the average salary at the financial services company is exactly equal to the average salary of all people now employed in Metroburg?
Sorry I'm not sure why would i be assuming that? I mean it would depend on the number of people no?
Show more
You shouldn't assume that, but if you like answer choice (D) then you are assuming that. Try this thought experiment, Elite097:
Employees at the financial services company earn, on average, 10 times as much as the other employees in Metroburg.
If that were true, would you still like answer choice (D)?
I thought TomWalker did a great job explaining this a couple of posts above yours, Elite097. Here's his explanation, for your convenience:
TomWalker
We know nothing about how much the employees are paid. The tax is based on payroll (i.e., it's 2% of the workers' salaries), not on a per-employee basis (i.e., $X per employee per year). Unless the workers at the financial services company earn exactly the average salary in Metroburg, they will generate either more or less than 1% of the tax. We are not told what the employees are paid, therefore we can't draw any conclusions about how much of the tax they are responsible for.
Show more
User avatar
Sanish9d
User avatar
Joined: 07 Apr 2020
Last visit: 25 Jan 2023
Posts: 2
Given Kudos: 5
Posts: 2
Kudos: 0
Half of Metroburg's operating budget comes from a payroll tax of 2 per 01 Jan 2023, 07:32
Kudos
Add Kudos
Bookmarks
Bookmark this Post
GMATNinja
mikemcgarry
avigutman
KarishmaB

Please help with this query

Quote:
E) The company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector, unless it results in a contraction of the public-sector payroll.
Show more
(E) says that the company's relocation will tend to increase the proportion of public-sector jobs in Metroburg, unless that same relocation also results in a contraction of the public-sector payroll.

We know that the company is "one of Metroburg's largest private-sector employers." It logically follows that if one of Metroburg's largest private-sector employers relocates all of its employees to a location outside of Metroburg, then the result will tend to be a lower proportion of private-sector jobs (and a higher proportion of public-sector jobs) in Metroburg)...

...unless that same move results in a contraction of the public-sector payroll.

This second part of choice (E) simply says that we won't see a tendency towards increase in the proportion of public-sector jobs if there's an accompanying contraction of public-sector payroll. In other words, a contraction may reduce the tendency of an increase. We can't tell from the passage whether a contraction in public-sector payroll is likely to happen or how it could happen, but we don't need to know that to accept the logic of this statement.

This is why choice (E) can be more properly be concluded than any other choice available.

I hope that helps!


Hi GMATNinja

I have a query regarding the interpretation of the conditional logic of ‘unless’

A unless B

Implies if not B then A or the contrapositive if not A then B

Your explanation for ‘ The company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector, unless it results in a contraction of the public-sector payroll’ is ‘we won't see a tendency towards increase in the proportion of public-sector jobs if there's an accompanying contraction of public-sector payroll’

So for A unless B you are implying that if B then not A ….I believe that’s incorrect.

Would love some clarity on this

Also it would be great if you could let me know why interpreting ‘if B then not A’ from ‘A unless B’ is not logically correct
User avatar
KarishmaB
User avatar
Joined: 16 Oct 2010
Last visit: 19 Nov 2025
Posts: 16,267
Own Kudos:
77,001
 [3]
Given Kudos: 482
Location: Pune, India
Expert
Expert reply
Active GMAT Club Expert! Tag them with @ followed by their username for a faster response.
Posts: 16,267
Kudos: 77,001
 [3]
Half of Metroburg's operating budget comes from a payroll tax of 2 per 04 Jan 2023, 04:34
3
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Sanish9d
GMATNinja
mikemcgarry
avigutman
KarishmaB

Please help with this query

Quote:
E) The company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector, unless it results in a contraction of the public-sector payroll.
(E) says that the company's relocation will tend to increase the proportion of public-sector jobs in Metroburg, unless that same relocation also results in a contraction of the public-sector payroll.

We know that the company is "one of Metroburg's largest private-sector employers." It logically follows that if one of Metroburg's largest private-sector employers relocates all of its employees to a location outside of Metroburg, then the result will tend to be a lower proportion of private-sector jobs (and a higher proportion of public-sector jobs) in Metroburg)...

...unless that same move results in a contraction of the public-sector payroll.

This second part of choice (E) simply says that we won't see a tendency towards increase in the proportion of public-sector jobs if there's an accompanying contraction of public-sector payroll. In other words, a contraction may reduce the tendency of an increase. We can't tell from the passage whether a contraction in public-sector payroll is likely to happen or how it could happen, but we don't need to know that to accept the logic of this statement.

This is why choice (E) can be more properly be concluded than any other choice available.

I hope that helps!


Hi GMATNinja

I have a query regarding the interpretation of the conditional logic of ‘unless’

A unless B

Implies if not B then A or the contrapositive if not A then B

Your explanation for ‘ The company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector, unless it results in a contraction of the public-sector payroll’ is ‘we won't see a tendency towards increase in the proportion of public-sector jobs if there's an accompanying contraction of public-sector payroll’

So for A unless B you are implying that if B then not A ….I believe that’s incorrect.

Would love some clarity on this

Also it would be great if you could let me know why interpreting ‘if B then not A’ from ‘A unless B’ is not logically correct
Show more

"A unless B" is equivalent to "If not B, then A"

I will complete my project on time unless I fall sick.
is equivalent to
If I do not fall sick, I will complete my project on time.

If I fall sick, what will happen, I cannot say.

The company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector, unless it results in a contraction of the public-sector payroll.

means

If it does not result in a contraction of the public-sector payroll, the company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector.

This is true. The move will reduce the number of private sector employees. If the move does not reduce the number of public sector employees, then the move will lead to an increase in the proportion of jobs in public sector.
User avatar
Sanish9d
User avatar
Joined: 07 Apr 2020
Last visit: 25 Jan 2023
Posts: 2
Given Kudos: 5
Posts: 2
Kudos: 0
Half of Metroburg's operating budget comes from a payroll tax of 2 per 04 Jan 2023, 08:02
Kudos
Add Kudos
Bookmarks
Bookmark this Post
"A unless B" is equivalent to "If not B, then A"

I will complete my project on time unless I fall sick.
is equivalent to
If I do not fall sick, I will complete my project on time.

If I fall sick, what will happen, I cannot say.

The company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector, unless it results in a contraction of the public-sector payroll.

means

If it does not result in a contraction of the public-sector payroll, the company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector.

This is true. The move will reduce the number of private sector employees. If the move does not reduce the number of public sector employees, then the move will lead to an increase in the proportion of jobs in public sector.[/quote]


KarishmaB thank you for responding to my query.

I understand that A unless B implies if not B then A

But I just want to know what’s wrong in the interpretation of ‘If B then not A’ from ‘A unless B’ ?

‘I will complete my project on time unless I fall sick’ can also be understood as the following

I will complete my project on time…but what will prevent me from doing so is when I fall sick

I also saw several grammar videos on the usage of unless with the above implication.
User avatar
GMATNinja
User avatar
GMAT Club Verbal Expert
Joined: 13 Aug 2009
Last visit: 19 Nov 2025
Posts: 7,443
Own Kudos:
69,787
 [2]
Given Kudos: 2,060
Status: GMAT/GRE/LSAT tutors
Location: United States (CO)
GMAT 1: 780 Q51 V46
GMAT 2: 800 Q51 V51
GRE 1: Q170 V170
GRE 2: Q170 V170
Products:
GMAT Club Tests Forum Quiz
Expert
Expert reply
GMAT 2: 800 Q51 V51
GRE 1: Q170 V170
GRE 2: Q170 V170
Posts: 7,443
Kudos: 69,787
 [2]
Half of Metroburg's operating budget comes from a payroll tax of 2 per 04 Jan 2023, 08:42
2
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Sanish9d
GMATNinja
mikemcgarry
avigutman
KarishmaB

Please help with this query

GMATNinja
Quote:
E) The company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector, unless it results in a contraction of the public-sector payroll.
(E) says that the company's relocation will tend to increase the proportion of public-sector jobs in Metroburg, unless that same relocation also results in a contraction of the public-sector payroll.

We know that the company is "one of Metroburg's largest private-sector employers." It logically follows that if one of Metroburg's largest private-sector employers relocates all of its employees to a location outside of Metroburg, then the result will tend to be a lower proportion of private-sector jobs (and a higher proportion of public-sector jobs) in Metroburg)...

...unless that same move results in a contraction of the public-sector payroll.

This second part of choice (E) simply says that we won't see a tendency towards increase in the proportion of public-sector jobs if there's an accompanying contraction of public-sector payroll. In other words, a contraction may reduce the tendency of an increase. We can't tell from the passage whether a contraction in public-sector payroll is likely to happen or how it could happen, but we don't need to know that to accept the logic of this statement.

This is why choice (E) can be more properly be concluded than any other choice available.

I hope that helps!


Hi GMATNinja

I have a query regarding the interpretation of the conditional logic of ‘unless’

A unless B

Implies if not B then A or the contrapositive if not A then B

Your explanation for ‘ The company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector, unless it results in a contraction of the public-sector payroll’ is ‘we won't see a tendency towards increase in the proportion of public-sector jobs if there's an accompanying contraction of public-sector payroll’

So for A unless B you are implying that if B then not A ….I believe that’s incorrect.

Would love some clarity on this

Also it would be great if you could let me know why interpreting ‘if B then not A’ from ‘A unless B’ is not logically correct
Show more
It's easiest to look at the meaning of this particular answer choice instead of trying to match the word "unless" to a rigid logical definition.

Here, we're looking for something that can be most properly concluded. The first bit of (E) gives us a potential conclusion: "The company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector."

But wait, what if a whole bunch of public sector jobs go away? Then we'd run into the exact same issue as we did on (B).

To avoid this issue, the author adds in a qualification, or perhaps a condition: "unless that same move results in a contraction of the public-sector payroll."

Basically, the author is saying "IF the public sector doesn't get contracted, THEN we can conclude that the proportion of public sector jobs will increase."

If you want a more logic-y way of looking at it, "unless" in this case actually means "if this second thing doesn't happen (the public sector contraction), then we can likely conclude that the first thing will happen." Or, to put it into your framework, "If not B, then most likely A." But again, I really wouldn't recommend trying to memorize stuff like this -- most of the time it just complicates matters. Instead, think through each answer choice independently to get at what the author is really trying to say.

I hope that helps!
User avatar
KarishmaB
User avatar
Joined: 16 Oct 2010
Last visit: 19 Nov 2025
Posts: 16,267
Own Kudos:
77,001
 [1]
Given Kudos: 482
Location: Pune, India
Expert
Expert reply
Active GMAT Club Expert! Tag them with @ followed by their username for a faster response.
Posts: 16,267
Kudos: 77,001
 [1]
Half of Metroburg's operating budget comes from a payroll tax of 2 per 04 Jan 2023, 21:23
1
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Sanish9d
"A unless B" is equivalent to "If not B, then A"

I will complete my project on time unless I fall sick.
is equivalent to
If I do not fall sick, I will complete my project on time.

If I fall sick, what will happen, I cannot say.

The company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector, unless it results in a contraction of the public-sector payroll.

means

If it does not result in a contraction of the public-sector payroll, the company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector.

This is true. The move will reduce the number of private sector employees. If the move does not reduce the number of public sector employees, then the move will lead to an increase in the proportion of jobs in public sector.


KarishmaB thank you for responding to my query.

I understand that A unless B implies if not B then A

But I just want to know what’s wrong in the interpretation of ‘If B then not A’ from ‘A unless B’ ?

‘I will complete my project on time unless I fall sick’ can also be understood as the following

I will complete my project on time…but what will prevent me from doing so is when I fall sick

I also saw several grammar videos on the usage of unless with the above implication.
Show more


Take the simple example:

Peter: I will complete my project on time unless I fall sick.

What is Peter telling us? That he is on his way to completing the project on time and he will. The only exception is the case in which he falls sick.
So what we can say for sure is that if he doesn't fall sick, he will complete his project on time (certainty).
But if he falls sick, he MAY not complete it on time. I can't say that he will definitely NOT complete it on time if he falls sick. All I can say is that the certainty of completing it on time goes for a toss if he falls sick.
User avatar
IndEmBeeAy
User avatar
Joined: 11 Aug 2022
Last visit: 10 Nov 2025
Posts: 32
Own Kudos:
22
Given Kudos: 8
GPA: 3.8
Posts: 32
Kudos: 22
Half of Metroburg's operating budget comes from a payroll tax of 2 per 15 Jan 2023, 06:59
Kudos
Add Kudos
Bookmarks
Bookmark this Post
I am still unconvinced on why C is wrong? Can anyone help?

The question says what can be 'most properly' concluded - and the only thing inferable seems to be that the relocation of the company outside the state will help it pay less tax (unless the movement is in the state where payroll taxes are higher)

E just seems to be a leap of faith to me, and I could correctly disregard A/D based on the proportionality argument.
User avatar
DmitryFarber
User avatar
Manhattan Prep Instructor
Joined: 22 Mar 2011
Last visit: 08 Nov 2025
Posts: 3,020
Own Kudos:
8,564
Given Kudos: 57
Expert
Expert reply
GMAT Focus 1: 745 Q86 V90 DI85
Posts: 3,020
Kudos: 8,564
Half of Metroburg's operating budget comes from a payroll tax of 2 per 31 Jan 2023, 14:27
Kudos
Add Kudos
Bookmarks
Bookmark this Post
HarvardCallingMe

Yeah, that "unless" is extremely important. What if I said that I am moving from the US, where I must pay taxes, to France? Does that tell you anything at all about my tax situation? Of course not! Similarly, in a math context, if I told you that X is even, and Y is not a multiple of X, would you conclude that Y is odd? No, you'd have no idea. It's important to accept that C is an absolute zero. There is literally no support for it at all, and such an answer could never be considered correct on an inference question.

As for E, it covers the "leap of faith" part with the proviso about changes in public sector jobs, so this answer is actually provable. If even a single private-sector job is eliminated, with no change in public-sector jobs, then the % of public jobs has gone up. So if a whole company takes all its private jobs out of the city, and no other big change happens as a result, then that move has had the effect of increasing the % of public jobs. If some other, unrelated event pulls the % back down, that doesn't matter. The move we're discussing has still exerted an upward pressure on that %. This really must be true.
avatar
Engineer1
avatar
Joined: 01 Jan 2014
Last visit: 15 Jun 2025
Posts: 201
Own Kudos:
656
Given Kudos: 457
Location: United States (IN)
Concentration: Strategy, Finance
Schools: Booth (Chicago) (A$)
Schools: Booth (Chicago) (A$)
Posts: 201
Kudos: 656
Half of Metroburg's operating budget comes from a payroll tax of 2 per 30 Jul 2023, 16:12
Kudos
Add Kudos
Bookmarks
Bookmark this Post
generis
Half of Metroburg's operating budget comes from a payroll tax of 2 percent on salaries paid to people who work in the city. Recently a financial services company, one of Metroburg's largest private-sector employers, announced that it will be relocating just outside the city. All the company's employees, amounting to 1 percent of all people now employed in Metroburg, will be employed at the new location.

From the information given, which of the following can most properly be concluded?


A) Unless other employers add a substantial number of jobs in Metroburg, the company's relocation is likely to result in a 1 percent reduction in the revenue for the city's operating budget.

B) Although the company's relocation will have a negative effect on the city's tax revenue, the company's departure will not lead to any increase in the unemployment rate among city residents.

C) One of the benefits that the company will realize from its relocation is a reduction in the taxes paid by itself and its employees.

D) Revenue from the payroll tax will decline by 1 percent if there is no increase in jobs within the city to compensate, fully or partially, for the company's departure.

E) The company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector, unless it results in a contraction of the public-sector payroll.


CR08540.02
Show more

Wonderful question. I solved it using my OG material and was looking for a good discussion.
I did it wrong the first time (D). The second time around, I realized 1% people are being incorrectly compared to 1% (reduction in) revenue in option (A) and (D). (C) is simply bad assumption. How do we know that the payroll tax or any other taxes are not higher in the new location? Can't assume anything here. (B) I didn't find it relevant at all. Even if it increases unemployment rate, how is that relevant? Plus this is inference question, so the fact should be supported by the argument and it is not.

KarishmaB GMATNinjaTwo GMATNinja - Can you please evaluate my answer? Thank you!
User avatar
KarishmaB
User avatar
Joined: 16 Oct 2010
Last visit: 19 Nov 2025
Posts: 16,267
Own Kudos:
77,001
 [1]
Given Kudos: 482
Location: Pune, India
Expert
Expert reply
Active GMAT Club Expert! Tag them with @ followed by their username for a faster response.
Posts: 16,267
Kudos: 77,001
 [1]
Half of Metroburg's operating budget comes from a payroll tax of 2 per 30 Jul 2023, 21:58
1
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Engineer1
generis
Half of Metroburg's operating budget comes from a payroll tax of 2 percent on salaries paid to people who work in the city. Recently a financial services company, one of Metroburg's largest private-sector employers, announced that it will be relocating just outside the city. All the company's employees, amounting to 1 percent of all people now employed in Metroburg, will be employed at the new location.

From the information given, which of the following can most properly be concluded?


A) Unless other employers add a substantial number of jobs in Metroburg, the company's relocation is likely to result in a 1 percent reduction in the revenue for the city's operating budget.

B) Although the company's relocation will have a negative effect on the city's tax revenue, the company's departure will not lead to any increase in the unemployment rate among city residents.

C) One of the benefits that the company will realize from its relocation is a reduction in the taxes paid by itself and its employees.

D) Revenue from the payroll tax will decline by 1 percent if there is no increase in jobs within the city to compensate, fully or partially, for the company's departure.

E) The company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector, unless it results in a contraction of the public-sector payroll.


CR08540.02

Wonderful question. I solved it using my OG material and was looking for a good discussion.
I did it wrong the first time (D). The second time around, I realized 1% people are being incorrectly compared to 1% (reduction in) revenue in option (A) and (D). (C) is simply bad assumption. How do we know that the payroll tax or any other taxes are not higher in the new location? Can't assume anything here. (B) I didn't find it relevant at all. Even if it increases unemployment rate, how is that relevant? Plus this is inference question, so the fact should be supported by the argument and it is not.

KarishmaB GMATNinjaTwo GMATNinja - Can you please evaluate my answer? Thank you!
Show more

I am not sure about your logic for eliminating option (B). It's an inference question - is it something you can deduce from the argument. It is certainly relevant and would be my second choice after option (E) as the inference. At face value, it does seem to be correct but when we think a little harder, we realise that it is not. When a company relocates to another city with all its employees, it doesn't mean that it did not create any unemployment in the previous city by leaving. The local food providers who depended on the company's employees, the cleaners who cleaned the company's premises, the security guards who were likely brought in from an agency etc all would be out of job at least temporarily. A company this size (1% of the workforce) would have an entire ecosystem supporting it and that would all fall flat with the company leaving.
avatar
Engineer1
avatar
Joined: 01 Jan 2014
Last visit: 15 Jun 2025
Posts: 201
Own Kudos:
656
Given Kudos: 457
Location: United States (IN)
Concentration: Strategy, Finance
Schools: Booth (Chicago) (A$)
Schools: Booth (Chicago) (A$)
Posts: 201
Kudos: 656
Half of Metroburg's operating budget comes from a payroll tax of 2 per 31 Jul 2023, 07:31
Kudos
Add Kudos
Bookmarks
Bookmark this Post
KarishmaB
Engineer1
generis
Half of Metroburg's operating budget comes from a payroll tax of 2 percent on salaries paid to people who work in the city. Recently a financial services company, one of Metroburg's largest private-sector employers, announced that it will be relocating just outside the city. All the company's employees, amounting to 1 percent of all people now employed in Metroburg, will be employed at the new location.

From the information given, which of the following can most properly be concluded?


A) Unless other employers add a substantial number of jobs in Metroburg, the company's relocation is likely to result in a 1 percent reduction in the revenue for the city's operating budget.

B) Although the company's relocation will have a negative effect on the city's tax revenue, the company's departure will not lead to any increase in the unemployment rate among city residents.

C) One of the benefits that the company will realize from its relocation is a reduction in the taxes paid by itself and its employees.

D) Revenue from the payroll tax will decline by 1 percent if there is no increase in jobs within the city to compensate, fully or partially, for the company's departure.

E) The company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector, unless it results in a contraction of the public-sector payroll.


CR08540.02

Wonderful question. I solved it using my OG material and was looking for a good discussion.
I did it wrong the first time (D). The second time around, I realized 1% people are being incorrectly compared to 1% (reduction in) revenue in option (A) and (D). (C) is simply bad assumption. How do we know that the payroll tax or any other taxes are not higher in the new location? Can't assume anything here. (B) I didn't find it relevant at all. Even if it increases unemployment rate, how is that relevant? Plus this is inference question, so the fact should be supported by the argument and it is not.

KarishmaB GMATNinjaTwo GMATNinja - Can you please evaluate my answer? Thank you!

I am not sure about your logic for eliminating option (B). It's an inference question - is it something you can deduce from the argument. It is certainly relevant and would be my second choice after option (E) as the inference. At face value, it does seem to be correct but when we think a little harder, we realise that it is not. When a company relocates to another city with all its employees, it doesn't mean that it did not create any unemployment in the previous city by leaving. The local food providers who depended on the company's employees, the cleaners who cleaned the company's premises, the security guards who were likely brought in from an agency etc all would be out of job at least temporarily. A company this size (1% of the workforce) would have an entire ecosystem supporting it and that would all fall flat with the company leaving.
Show more


KarishmaB: Thanks for the explanation. Yes, now I see better B why is incorrect but not irrelevant. In my humble opinion, B could have been an inference answer choice (or better answer) if the answer was rephrased as below. I had E selected using the method of elimination. It is a tough question. At this point, I am wondering how I am supposed to think through this amount of details within 2 minutes. Any suggestion?

"The company's relocation will have a negative effect on the city's tax revenue. The company's departure may lead to increase in the unemployment rate among city residents."
User avatar
KarishmaB
User avatar
Joined: 16 Oct 2010
Last visit: 19 Nov 2025
Posts: 16,267
Own Kudos:
77,001
 [1]
Given Kudos: 482
Location: Pune, India
Expert
Expert reply
Active GMAT Club Expert! Tag them with @ followed by their username for a faster response.
Posts: 16,267
Kudos: 77,001
 [1]
Half of Metroburg's operating budget comes from a payroll tax of 2 per 31 Jul 2023, 23:02
1
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Engineer1


KarishmaB: Thanks for the explanation. Yes, now I see better B why is incorrect but not irrelevant. In my humble opinion, B could have been an inference answer choice (or better answer) if the answer was rephrased as below. I had E selected using the method of elimination. It is a tough question. At this point, I am wondering how I am supposed to think through this amount of details within 2 minutes. Any suggestion?

"The company's relocation will have a negative effect on the city's tax revenue. The company's departure may lead to increase in the unemployment rate among city residents."
Show more

Options that try to hedge make poor conclusions - not incorrect, but poor.

If, after looking at some data, I conclude that it may rain tomorrow, what am I saying really? What value did I add? I am not saying anything concrete. Even if there were no data input, it is always true that it may rain tomorrow. What value did I add?
So your re-worded option would not be incorrect, but rather sub-optimal.

You are supposed to think through this amount of detail by hopefully stealing some extra time from sentence correction questions!
avatar
Abolnasr
avatar
Joined: 10 Jul 2023
Last visit: 14 Aug 2024
Posts: 34
Own Kudos:
8
Given Kudos: 18
Posts: 34
Kudos: 8
Half of Metroburg's operating budget comes from a payroll tax of 2 per 22 Aug 2023, 13:42
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Very good question!

It’s verbal reasoning, not verbal test!

Reasoning points:
The company employes 1% of the workforce, but how do we know it pays 1% of the overall payroll taxes?
Maybe this company is a very generous company and pays double the average salary of employees in the city, maybe the exact opposite!
E is accurate but reasoning every single choice until we reach to E makes us bored and increases our tendency to eliminate it, also it’s more complex and contains ratio information! Boooringgg.
But it’s actually the only reasonable choice!
User avatar
rmahe11
User avatar
Joined: 13 Oct 2023
Last visit: 15 Aug 2025
Posts: 112
Own Kudos:
27
Given Kudos: 99
Posts: 112
Kudos: 27
Half of Metroburg's operating budget comes from a payroll tax of 2 per 06 Apr 2024, 00:50
Kudos
Add Kudos
Bookmarks
Bookmark this Post
GMATNinja

krrishwins
GMATNinja

Quote:
All the company's employees, amounting to 1 percent of all people now employed in Metroburg, will be employed at the new location.


B) Although the company's relocation will have a negative effect on the city's tax revenue, the company's departure will not lead to any increase in the unemployment rate among city residents

 
Answer choice B says that company's departure will not lead to any increase in unemployment rate. This is right because all of their employees will be employed in the new location? Of course there could be other reasons behind the unemployment rate but this company departure will not lead to that increase.

Can you please explain why B is incorrect?
You're right that all the company's employees will be employed in the new location. However, the answer choice says the unemployment rate will not rise among city residents. There are city residents whose jobs rely on offices like this one who could lose their jobs when the company relocates:


  • Local coffee shop workers (mmm... coffee :-P)
  • Local restaurant workers... (mmm... food :-P)
  • Local bar staff (mmm... beer :-P)
  • Commercial real estate management
  • Workers contracted to that office through another company -- e.g., security, cleaning, or maintenance workers
  • Other workers that rely on offices like these that I'm unaware of

We cannot say that the company's departure will not lead to any increase in the unemployment rate. For this reason, eliminate (B).

I hope that helps!
Show more
­How come you are sure that it will increase public sector jobs if one private company moves out . I believe since a company is moving out there is definitely reduction in workforce and can affect tax revenue but it wont lead to an increased departure of unemployment rate
User avatar
GMATNinja
User avatar
GMAT Club Verbal Expert
Joined: 13 Aug 2009
Last visit: 19 Nov 2025
Posts: 7,443
Own Kudos:
69,787
 [3]
Given Kudos: 2,060
Status: GMAT/GRE/LSAT tutors
Location: United States (CO)
GMAT 1: 780 Q51 V46
GMAT 2: 800 Q51 V51
GRE 1: Q170 V170
GRE 2: Q170 V170
Products:
GMAT Club Tests Forum Quiz
Expert
Expert reply
GMAT 2: 800 Q51 V51
GRE 1: Q170 V170
GRE 2: Q170 V170
Posts: 7,443
Kudos: 69,787
 [3]
Half of Metroburg's operating budget comes from a payroll tax of 2 per 19 Apr 2024, 14:09
3
Kudos
Add Kudos
Bookmarks
Bookmark this Post
rmahe11


GMATNinja


krrishwins
GMATNinja

Answer choice B says that company's departure will not lead to any increase in unemployment rate. This is right because all of their employees will be employed in the new location? Of course there could be other reasons behind the unemployment rate but this company departure will not lead to that increase.

Can you please explain why B is incorrect?

You're right that all the company's employees will be employed in the new location. However, the answer choice says the unemployment rate will not rise among city residents. There are city residents whose jobs rely on offices like this one who could lose their jobs when the company relocates:


  • Local coffee shop workers (mmm... coffee :-P)
  • Local restaurant workers... (mmm... food :-P)
  • Local bar staff (mmm... beer :-P)
  • Commercial real estate management
  • Workers contracted to that office through another company -- e.g., security, cleaning, or maintenance workers
  • Other workers that rely on offices like these that I'm unaware of

We cannot say that the company's departure will not lead to any increase in the unemployment rate. For this reason, eliminate (B).

I hope that helps!
­How come you are sure that it will increase public sector jobs if one private company moves out . I believe since a company is moving out there is definitely reduction in workforce and can affect tax revenue but it wont lead to an increased departure of unemployment rate
Show more
­Take another look at the exact wording of (E):

Quote:
E) The company's relocation will tend to increase the proportion of jobs in Metroburg that are in the public sector, unless it results in a contraction of the public-sector payroll.
Show more
(E) doesn't say that there will be an "increase in public sector jobs," as you've written. It instead says that the proportion of jobs that are in the public sector will increase. These two things are very different!

The proportion of public-sector jobs means the number of those jobs compared to the overall number of jobs (public and private). We know that some private sector jobs are going away -- so even if the number of public sector jobs remains exactly the same, those jobs will now be a bigger piece of the overall job market. In other words, the proportion will increase. ­

As for (B), you just can't make the assumption that the unemployment rate won't increase, for exactly the reason we mentioned above: the relocation of some workers can affect other workers. When the huge company leaves, those workers may not continue to visit coffee shops, restaurants, etc. within the town. This could lead to increased unemployment for baristas, waiters, and others. ­So, we can't "properly conclude" the information in (B).

I hope that helps!­
User avatar
Dbrunik
User avatar
Joined: 13 Apr 2024
Last visit: 01 Nov 2025
Posts: 270
Own Kudos:
124
Given Kudos: 267
Location: United States (MN)
Concentration: Finance, Technology
GMAT Focus 1: 625 Q84 V82 DI77
GMAT Focus 1: 625 Q84 V82 DI77
Posts: 270
Kudos: 124
Half of Metroburg's operating budget comes from a payroll tax of 2 per 25 Sep 2024, 20:11
Kudos
Add Kudos
Bookmarks
Bookmark this Post
GMATNinja
krrishwins
GMATNinja

Quote:
All the company's employees, amounting to 1 percent of all people now employed in Metroburg, will be employed at the new location.


B) Although the company's relocation will have a negative effect on the city's tax revenue, the company's departure will not lead to any increase in the unemployment rate among city residents


Answer choice B says that company's departure will not lead to any increase in unemployment rate. This is right because all of their employees will be employed in the new location? Of course there could be other reasons behind the unemployment rate but this company departure will not lead to that increase.

Can you please explain why B is incorrect?
You're right that all the company's employees will be employed in the new location. However, the answer choice says the unemployment rate will not rise among city residents. There are city residents whose jobs rely on offices like this one who could lose their jobs when the company relocates:

  • Local coffee shop workers (mmm... coffee :-P)
  • Local restaurant workers... (mmm... food :-P)
  • Local bar staff (mmm... beer :-P)
  • Commercial real estate management
  • Workers contracted to that office through another company -- e.g., security, cleaning, or maintenance workers
  • Other workers that rely on offices like these that I'm unaware of

We cannot say that the company's departure will not lead to any increase in the unemployment rate. For this reason, eliminate (B).

I hope that helps!
Show more
i would just like to add that in 2024 this is a bit of a stretch. "Relocating" says nothing about how many people go to the office. it could be a minuscule amount. Also, just consider that most corporations in the United states are incorporated in Delaware, yet virtually none of the companies actually have headquarters there. you could say the same about offices. Example: Okay, yeah, we are "technically" located in Metroberg, but only 5 people go into the office, meanwhile the other 100,000 employees work elsewhere in the world. IT DOES NOT SAY that, prior to the move, all the employees work in metroberg. it only says that after the relocation, "all the companies employees" will work in metroberg, and mentions that that amount is 1% of metroburg population. Like i said. What if it was that 5 people worked there, and the population of metroberg was only 500 people?
   1   2   3   
Moderators:
GMATNinja
GMAT Club Verbal Expert
7443 posts
GMATNinjaTwo
GMAT Club Verbal Expert
231 posts
miag
189 posts