In the following question, two statements numbered I and II are given. There may be cause and effect relationship between the two statements. These two statements may be the effect of the same cause or independent causes. These statements may be independent causes without saving any relationship. Read both the statements in question and mark your answer as:A. If statement I is the cause and statement II is its effect;B. If statement II is the cause and statement, I is its effect;C. If both the statements I and II are independent causes;D. If both the statements I and II are effects of independent causes;E. If both the statements I and II are effects of some common causes;I. The State Bank of Pakistan has recently put restrictions on few small banks in the country.II. The small banks in the private and co-operative sector in Pakistan are not in a position to withstand the competitions of the bigger in the public sector.
Correct answer: D. B. If statement II is the cause and statement I is its effect;
- A. A. If statement I is the cause and statement II is its effect;
- B. D. If both the statements I and II are effects of independent causes;
- C. C. If both the statements I and II are independent causes;
- D. B. If statement II is the cause and statement I is its effect;
- E. E. If both the statements I and II are effects of some common cause;
Explanation
Statement II describes a situation where small banks are struggling to compete with larger public sector banks, which indicates a potential instability or inefficiency in their operations. This scenario likely prompted the State Bank of Pakistan to impose restrictions as described in Statement I, to manage the risk and ensure financial stability within the sector. Thus, statement II is the cause, and statement I is the effect. Options C, D, and E are incorrect as they represent scenarios where the statements are either independent or share a common cause not evident in this case.
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Cause and effect questions examine whether one event produces another, whether both arise from a common factor, or whether their connection is only coincidental. They involve identifying preceding and resulting events, separating correlation from causation, and judging whether the stated evidence supports a direct, possible or unlikely relationship.
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