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Cause–Effect reasoning: Assess whether policy liberalization explains a national carrier's capacity increase. Statement I: The Government allowed private Indian airlines to operate to overseas destinations. Statement II: The national carrier increased its flights to overseas destinations. Choose the correct option describing the relationship.

Difficulty: Easy

Correct Answer: Statement I is the cause and Statement II is its effect

Explanation:


Logic
Opening routes to private competitors increases competitive pressure; a typical strategic response is to add capacity and frequencies on lucrative sectors.


Causal chain
Policy liberalization (I) → competition signal → national carrier scales up overseas flights (II).


Final Answer
Statement I is the cause and Statement II is its effect

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