Statement — The income-tax rules need to be amended so that people have greater incentive to declare their actual wealth. Assumptions — I. The current income-tax rules are inadequate or sub-optimal. II. Some people do not declare their actual wealth under the present rules.
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Aif only Assumption I is implicit
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Bif only Assumption II is implicit
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CIf either Assumption I or II is implicit
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Dif neither Assumption I nor II is implicit
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Eif both Assumption I and II are implicit
Answer
Correct Answer: if both Assumption I and II are implicit
Explanation
Introduction / Context:Policy-change statements usually presuppose (a) that the status quo is inadequate and (b) a specific behavioral problem exists that the change aims to address. Both are present here: current rules are not producing truthful declarations, and amendments are proposed to fix that.
Given Data / Assumptions:
- Proposal: amend rules to increase incentives.
- I: current rules are not proper/effective enough.
- II: under-reporting or non-declaration exists.
Concept / Approach:A remedy presupposes a malady. Without II, there is nothing to fix. Without I, there is no reason to change rules.
Step-by-Step Solution:
1) Identify the target behavior: accurate wealth declaration.2) Infer the present failure (II) and inadequacy of rules (I).3) Conclude both assumptions are implicit.Verification / Alternative check:If everyone already declared accurately (¬II), amending rules for “more incentive” would be pointless, contradicting the statement.
Why Other Options Are Wrong:
Only I or only II: incomplete rationale for reform.Either: insufficient.Neither: contradicts the call for amendment.Common Pitfalls:Confusing “improper” with “illegal.” Here “not proper” means not adequate or effective.
Final Answer:Both Assumption I and II are implicit.