Statements: I. The Government has imported large quantities of sugar as per the trade agreements with other countries. II. The prices of sugar in the domestic market have fallen sharply in recent months.
Correct answer: A. Statement I is the cause and statement II Is its effect
- A. Statement I is the cause and statement II Is its effect
- B. Statement II is the cause and statement I is its effect
- C. Both statements are independent causes
- D. Both statements are effects of independent causes
Explanation
According to the economic principle of supply and demand, importing large quantities of a commodity (Statement I) increases its supply. An increase in supply, with demand remaining constant, is a direct cause for a decrease in market prices (Statement II).
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About Cause and Effect
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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