| Statement: |
| The Central Government has directed the State Governments to reduce government expenditure in view of the serious resource crunch and it may not be able to sanction any additional grant to the states for the next six months. |
| Assumptions: |
| I. The state Government are totally dependent on Central Government for its expenditures. |
| II. The Central Government has reviewed the expenditure account of the State Government. |
| III. The State Government will abide by the directive. |
A) Only I is implicit
B) Only II and III are implicit
C) Only III is implicit
D) All are implicit
E) None of these
Correct Answer: B
Solution :
Explanation Option [b] is correct. Nothing about the sources of income of the State Government is mentioned in the statement. So, I is not implicit. Since the Central Government has directed the state Governments to reduce expenditure, so II is implicit. Further since the Central Government has refused any further grant to the State Government for the next six months it is quite clear that the Governments will abide by the directive. So, III is also implicit.
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