In 1992, 5 percent of every dollar paid in tax went to

Question

In 1992, 5 percent of every dollar paid in tax went to support the unemployed citizens. In 1998, 8 percent of every dollar paid in tax went to such funds, although that unemployment rate has decreased in 1998 than in 1992. 
Each of the following, if true, could explain the simultaneous increase in percent of every dollar paid in tax to support the unemployed citizens and decrease in the number of unemployment rate EXCEPT:

A.On average, each unemployed citizen received more money in 1998 than 1992.

B.On average, people paid less tax in 1998 than in 1992.

C.The individuals had paid more tax than did enterprises during this period.

D.Income before tax has significantly decreased since 1992.

E.The number of tax evaders rose sharply between 1992 and 1998.

OA later after discussion..

DanaJ · Answer

There are two ways of explaining the apparent paradox:
- tax "revenues" decreased more than the unemployment rate, i.e. there were fewer funds available to pay for only slightly fewer unemployed people
- tax "costs" increased more than the decrease in unemployment, i.e. the administration paid much more to marginally fewer unemployed people

A fits in the second category, while B, D and E all fit in the first category. This leaves C. The structure of tax collected is irrelevant here. We're interested in the way it's spent, not collected.

crejoc · Answer

is there any typo error?, You seem to have missed mentioning option C in your explanation,.. your analysis is very good,

IMO C seems to be the answer, who paid more tax individuals or enterprises does not resolve the paradox,

DanaJ · Answer

Yes, it was a typo. You are right

crejoc · Answer

OA: C

Jivana · Answer

C for me: No info provided between people & corporations!

prabu · Answer

+1 C

tejal777 · Answer

The question asks..  increase in percent of every dollar paid in tax to support the unemployed citizens   what does that mean?

crejoc · Answer

The question asks to resolve the paradox, 
If unemployment rate decreases, the money spend to support must also decrease, but instead it has increased. so how?
What could resolve this paradox? decrease in unemployment at the same time increase in dollar to support it.. hope this helps. If not let me know. But the actual question is which doesnot resolve the paradox, note the "EXCEPT" at the end.

amit2k9 · Answer

crystal C here.

mba4viplav · Answer

Another C

In 1992, 5 percent of every dollar paid in tax went to

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