Which one of the following is not a valid explanation for why workers may prefer an extra dollar's worth of fringe benefits to an extra dollar's worth of cash?
A)workers may prefer to bind themselves against their own tendencies toward immediate gratification
B)certain fringe benefits effectively trade current taxes for future taxes
C)people generally prefer in-kind benefits to cash
D)certain fringe benefits are untaxed

Question

Quizplus · Accepted Answer

The statement "people generally prefer in-kind benefits to cash" is not a valid explanation as it is too broad and does not provide any specific reasons why workers may prefer fringe benefits over cash. A and B provide valid explanations for why workers may prefer fringe benefits, while D specifically notes the tax benefits that certain fringe benefits offer.

Which One of the Following Is Not a Valid Explanation