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Source: Revised GRE PDF 2nd Ed. Section 5; #20 (p. 81)


If Germany’s total tax revenue in 2000 was

If Germany’s total tax revenue in 2000 was approximately $170 billion, approximately what was the amount of the total retail gasoline sales in Germany that year? $10 billion, $20 billion, $30 billion, $40 billion, $50 billion

2 Explanations


Kalina Gajda

Hi! I am having trouble understanding why you don't multiply 34 (.707) to get 24.5?

Mar 31, 2019 • Comment


Hi Kalina,
Happy to help :)
First we figured out that Germany earned approximately 34 billion dollars in gasoline tax revenue. However, we want to know the total retail gasoline sales.
Gasoline tax revenue is equal to 70.7% of the total retail gasoline sales. In math terms, we can write:

Tax Revenue = 70.7% × Retail sales.

We want to know the retail sales. So we divide both sides by 70.7%: (Revenue)/0.707 = Sales. The revenue was 34, so 34/0.707 = 50 = Total retail sales.

Logically, Germany cannot make more tax revenue on gas than the total retail sales. In other words, if only 25 billion dollars of gas was sold, including taxes, then there's no way that Germany could make 34 billion in taxes.
Hope that help!

Apr 1, 2019 • Reply


Chris Lele

Sep 27, 2012 • Comment

Abhilash kulkarni

I'm finding it difficult to understand why do we need to refer the other graph. Could you please help me understand ?

Dec 22, 2017 • Reply

David Recine

Happy to help, Abhilash! :)

Before we get started, let's make sure you are able to look directly at the graphs in question. They can be found on page 81 of the second edition of ETS's GRE practice book, or on page 78 of the new edition of the PB currently up on the official ETS website:

The problem tells you that Germany's total tax revenue is equal to $170 billion. Then, the graph on the right tells you that 20.4% of that 170 billion comes from gasoline taxes.

So the total amount of money generated by gasoline taxation in Germany in 2000 is approximately 20% of 170 billion, or 34 billion. Again, you need to reference the chart on the right to get that figure.

Once you've got 34 billion, you have the total amount of gasoline taxes. However, what you ultimately need is the total amount of gasoline sales, including taxes. That's where referencing the graph on the left comes in. The lefthand graph says that German gas tax in 2000 represented 70.7% of the total money paid in gas sales for that country. In other words, approximately 34 billion USD represented approximately 70% of all gas sales for the year.

And at this point, you've referenced both graphs to combine information and get the answer. To see how to combine the info form the two graphs for the final answer, review Chris's video above, from the 1:00 time onward.

Dec 27, 2017 • Reply

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