Statement: “Given a likely fiscal deficit of around five percent, there is no denying the need for a consensus to trim government expenditure,” says Mr. X.\nAssumptions I & II:\nI. Trimming government expenditure is an effective tool to curb the fiscal deficit.\nII. Trimming government expenditure is not an effective tool to curb the fiscal deficit.\nSelect the option that correctly identifies the implicit assumption(s).

Introduction / Context:
The statement proposes trimming government expenditure in response to a likely 5% fiscal deficit and calls for consensus on that action. We must identify which assumption(s) make this recommendation sensible.

Given Data / Assumptions:

• I. Cutting expenditure helps reduce fiscal deficit.
• II. Cutting expenditure does not help reduce fiscal deficit.

Concept / Approach:
A recommendation presupposes that the proposed measure serves the goal. If the speaker urges expenditure cuts to address deficit, the speaker must assume such cuts are effective.

Step-by-Step Solution:
1) Goal: curb a ~5% fiscal deficit.2) Proposed action: trim government expenditure.3) Necessary assumption: trimming expenditure is an effective tool to curb the deficit (Assumption I).4) Assumption II directly contradicts the rationale; the speaker would not urge an ineffective tool.

Verification / Alternative check:
Even if other tools (raise revenue, restructure debt) exist, the recommendation still requires believing that expenditure cuts help. Thus I is necessary.

Why Other Options Are Wrong:
Only II: contradicts the proposal. Either I or II: cannot both be presupposed. Neither: false; some belief in effectiveness (I) must hold. Both: logically inconsistent.

Common Pitfalls:
Assuming recommendations require exclusivity. The statement does not deny other tools; it only needs I to be true.

Final Answer:
Only assumption I is implicit.