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## 1000 CR Test 18 Question 13

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radhika1306 Master | Next Rank: 500 Posts
Joined
13 Apr 2007
Posted:
144 messages

#### 1000 CR Test 18 Question 13

Sat Aug 11, 2007 2:04 pm
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

OA is A .
Can someone explain

devesh Senior | Next Rank: 100 Posts
Joined
18 Jun 2007
Posted:
57 messages
Sat Aug 11, 2007 11:13 pm
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. Correct
(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. Not necessary
(C) The amounts the Canadian government pays out to those who provide social services to Canadians are increasing. Nopes
(D) The same brands of goods are available to Canadian shoppers across the border as are available in Canada. May be
(E) Out-shopping purchases are subject to Canadian taxes when the purchaser crosses the border to bring them into Canada. There is no incentive to purchase outside then.

A say that if trend continues then Canada will loose revenues and to maintain services and tax revenues it will increase taxes.

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