Let the government increase the present rate of taxation to recover the deficit in the budget.
Assumption I: Present rate of taxes is very low.
Assumption II: If government wants to get away with the budgetary deficit it should increase tax rate.
| A. | assumption I is implicit |
| B. | assumption II is implicit, |
| C. | both I and II are implicit |
| D. | neither of them is implicit. |
Answer : B Explanation : There are many reasons behind budgetary deficits. Thus if the rate of tax is low even then it can not be said that deficit is the product of low tax rate. In this way first assumption is not implicit but II one is implicit as taxes are a good source of finance to cover the deficit. |
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Option: A Explanation : Explanation will come here. Explanation will come here. Explanation will come here. Explanation will come here. Explanation will come here. |
