Multiple choice

Directions: For this question, select the best of the answer choices given.

Under current federal law, employers are allowed to offer their employees free parking spaces as a tax-free benefit, but they can offer employees only up to $180 per year as a tax-free benefit for using mass transit. The government could significantly increase mass transit ridership by raising the limit of this benefit to meet commuters' transportation costs. The proposal above to increase mass transit ridership assumes that

  1. current mass transit systems are subject to unexpected route closings and delays

  2. using mass transit creates less air pollution per person than using a private automobile

  3. the parking spaces offered by employers as tax-free benefits can be worth as much as $2,500 per year

  4. many employees are deterred by financial considerations from using mass transit to commute to their places of employment

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The proposal assumes that the current $180 limit is insufficient and prevents employees from choosing mass transit. For raising the limit to increase ridership, it must be true that financial considerations currently deter employees from using mass transit. Option D correctly identifies this necessary assumption - if employees aren't deterred by cost, raising the benefit wouldn't change their behavior.

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