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# When a city experiences a sharp decline in population, the city's tax

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Joined: 08 Mar 2019
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When a city experiences a sharp decline in population, the city's tax  [#permalink]

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08 Mar 2019, 07:56
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Difficulty:

65% (hard)

Question Stats:

33% (01:27) correct 67% (03:09) wrong based on 9 sessions

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When a city experiences a sharp decline in population, the city's tax revenues, which pay for such city services as police protection and maintenance of water lines, also decrease. The area to be policed and the number and length of the water lines to be maintained, however, do not decrease. Attempting to make up the tax revenue lost by raising tax rates is not feasible, since higher tax rates would cause even more residents to leave.

The information given most strongly supports which of the following general claims?

A. If, in a city with sharply declining population, police protection and water line maintenance do not deteriorate, some other service previously provided by the city will deteriorate or be eliminated.

B. If a city's tax rates are held stable over a period of time, neither the population nor the levels of city services provided will tend to decline over that period.

C. If a city's population declines sharply, police protection and water line maintenance are the services that deteriorate most immediately and most markedly.

D. A city that suffers revenue losses because of a sharp decline in population can make up some of the lost tax revenue by raising tax rates, provided the city's tax rates are low in relation to those of other cities.

E. A city that is losing residents because tax rates are perceived as too high by those residents can reverse this population trend by bringing its tax rates down to a more moderate level.

Can any one gives a explanation.
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Joined: 02 Sep 2009
Posts: 53716
Re: When a city experiences a sharp decline in population, the city's tax  [#permalink]

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08 Mar 2019, 07:59
Rubina11 wrote:
When a city experiences a sharp decline in population, the city's tax revenues, which pay for such city services as police protection and maintenance of water lines, also decrease. The area to be policed and the number and length of the water lines to be maintained, however, do not decrease. Attempting to make up the tax revenue lost by raising tax rates is not feasible, since higher tax rates would cause even more residents to leave.

The information given most strongly supports which of the following general claims?

A. If, in a city with sharply declining population, police protection and water line maintenance do not deteriorate, some other service previously provided by the city will deteriorate or be eliminated.

B. If a city's tax rates are held stable over a period of time, neither the population nor the levels of city services provided will tend to decline over that period.

C. If a city's population declines sharply, police protection and water line maintenance are the services that deteriorate most immediately and most markedly.

D. A city that suffers revenue losses because of a sharp decline in population can make up some of the lost tax revenue by raising tax rates, provided the city's tax rates are low in relation to those of other cities.

E. A city that is losing residents because tax rates are perceived as too high by those residents can reverse this population trend by bringing its tax rates down to a more moderate level.

Can any one gives a explanation.

Discussed here: https://gmatclub.com/forum/when-a-city- ... fl=similar If any questions please post there.

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Re: When a city experiences a sharp decline in population, the city's tax   [#permalink] 08 Mar 2019, 07:59
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# When a city experiences a sharp decline in population, the city's tax

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