Question

Which of the following is not one of the reasons commonly suggested explaining why firms provide employee benefits instead of simply paying higher cash wages?

A. Employers don’t have enough cash to pay higher wages.

B. Employer-provided benefits promote employee productivity.

C. Percentage loadings for administrative expenses in group insurance premiums are lower than for individual insurance.

D. They provide tax savings for both employer and employee.

Answer 1

Correct option:

A. Employers don’t have enough cash to pay higher wages.

It is not necessary that an employer dosent have anough cash to pay wages

B is correct because additional benefits lead to more productivity

C is correct because economies of scale reduce loading for administrative expenses for group insurance

D is correct because as tax benefits are availed by both employee and employer.