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MGMAT CAT

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by vineetbatra » Wed Aug 26, 2009 8:06 am
Amtown's public schools are supported primarily by town property taxes. The town plans to eliminate the property tax and support schools with a new four-percent sales tax on all retail items sold in town. Four percent of current retail sales is substantially less than the amount currently collected through property taxes, but town planners believe that adopting this plan will not have a negative impact on the funds available for the town's public schools because ______.

Which of the following most logically completes the argument?
A) a new shopping center that will draw shoppers from neighboring towns will open this year in Amtown
B) many Amtown residents are planning to leave town due to high property taxes
C) a number of parents who currently send their children to Amtown's public schools do not pay property taxes.
D) the sales tax in neighboring towns is much higher than four percent
E) Amtown was recently featured in a magazine as one of the top 10 weekend getaways from a nearby city.

OA is A, I selected B because I thought if the Residents are planning to leave then property tax will fall in the future

I did not select A because I thought that although a new mall is opening, but not sure how much sales tax it will generate

Can someone explain the line of thought on this one and Y A not B.
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Re: MGMAT CAT

by [email protected] » Wed Aug 26, 2009 9:12 am
Weird answer.. Even I choose B.. I think the OA (A) makes little sense..
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by gmatmachoman » Wed Aug 26, 2009 10:22 am
I presume in this way to prove why B is wrong.
property tax are the kind of tax that is levied on the property.So the owner of the property has to pay the tax whetehr the resident stays in that property or not.
It will be too extreme to assume that taxes shall be paid only if one stays in the property.

More Option A is also openended throwing lot of assumptions to be made like,it would be generating sufficient revenues and would be able to pool in more people to shop in the new shopping centre from other towns.

I shall go with A as atleast it supports the argument and logically completes it.
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by viks » Fri Aug 13, 2010 8:50 pm
I go with A too.


The reason i feel B is not the correct option is because of the line
"Four percent of current retail sales is substantially less than the amount currently collected through property taxes"

B states "many Amtown residents are planning to leave town due to high property taxes". If because of lowering of the property taxes, the above people who decided to leave town change their plans and stay, the 4% sales tax is still substantially less than the property tax that the town could have collected, so it does cause a negative impact on funds.

The only thing that does not cause a negative impact is if the sales rises, causing the 4% sales tax amount to rise, which is what answer A believes will happen.
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by paes » Sat Aug 14, 2010 5:45 am
ALWAYS PUT THE OA UNDER SPOILER.
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by melguy » Wed Dec 14, 2011 7:51 pm
Official explanation

(A) If a new shopping center is opening in Amtown, the retail sales in the town, and the receipts from the sales tax, would be expected to rise. This would potentially enable the sales tax to generate at least as much money as the current property tax.

(B) The fact that some residents might leave Amtown is irrelevant, as this may not necessarily have an impact on property tax or sales tax receipts, particularly if the plan is adopted and the residents change their minds. Additionally, the argument states that the sales tax will not have a negative impact on the funds available for the town's public schools.

I found the reasoning very weak in the official explanation

1) Now one can argue what if the new shopping center that was supposed to be built will not be built anymore because the company that was going to build it changed its mind.

2) As per the statement "a new shopping center that will draw shoppers". How many shoppers? 2 or 20,000?
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by tuanquang269 » Thu Dec 15, 2011 7:50 am
I use POE although choice A makes weak sense, but it still strengthen the conclusion.
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by chieftang » Thu Dec 15, 2011 10:46 am
Choice A makes perfect sense. The sentence being completed with this phrase discusses sales tax receipts, so A is the one answer that completes that thought.
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by avik.ch » Thu Dec 15, 2011 10:35 pm
Amtown's public schools are supported primarily by town property taxes. - fact
The town plans to eliminate the property tax and support schools with a new four-percent sales tax on all retail items sold in town. - new initiative, its an premise here
Four percent of current retail sales is substantially less than the amount currently collected through property taxes, - counter premise
but town planners believe that adopting this plan will not have a negative impact on the funds available for the town's public schools - conclusion ,

because, ___________ we have to support the argument !!

we have to justify the conclusion to be correct. Here we are supposed to find a statement that will directly justify the conclusion, at the same time keeping in view the counter premise, which needs to be justified too.

A - As a new shopping town will be opening, collection from sales tax will grow. Hence this will support the conclusion.
B - This as an weakener here. As more people will move out of the town, the sales tax collection will decrease. This will hurt the conclusion.

C,D and E - are all irrelevant.
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by [email protected] » Tue Feb 14, 2012 12:24 am
Amtown's public schools are supported primarily by town property taxes. The town plans to eliminate the property tax and support schools with a new four-percent sales tax on all retail items sold in town. Four percent of current retail sales is substantially less than the amount currently collected through property taxes, but town planners believe that adopting this plan will not have a negative impact on the funds available for the town's public schools because ______.

Which of the following most logically completes the argument?
A) a new shopping center that will draw shoppers from neighboring towns will open this year in Amtown
B) many Amtown residents are planning to leave town due to high property taxes
C) a number of parents who currently send their children to Amtown's public schools do not pay property taxes.
D) the sales tax in neighboring towns is much higher than four percent
E) Amtown was recently featured in a magazine as one of the top 10 weekend getaways from a nearby city.



Honestly I was hooked between options A and E. E according to me is also closer as it is somewhere increasing the revenue for Amtown...


Option B was easy to solve as the government of Amtown removed the property taxes and brought in sales tax, so option B was as it is not relevant to the argument.

Option A is the most strong because it affects the sales of the town directly.

Option E also could have been strong as it says the Amtown is a top 10 place for a vacation. Hence a lot of tourists. A lot of tourists mean a lot of shopping.

But Option E affects the sales indirectly as many tourists might not shop at all.

Hence option A is the right answer.....


Hope this helped...
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