Step 1: Understanding the question.
The statement mentions that passenger fares have been increased to meet the budget deficit. We need to identify which assumptions are implicit in this statement.
Step 2: Analyzing the assumptions.
- Assumption I: "Passenger fares were low" is not explicitly stated in the sentence. While the increase in fares may suggest this, it is not directly implied.
- Assumption II: "If the fare is not increased the deficit cannot be met" is directly implied, as the statement indicates that increasing fares is a measure to address the budget deficit.
Step 3: Conclusion.
The correct answer is (C) Only II is implicit, as it is the only assumption that is directly supported by the statement.