Home » Verbal Reasoning » Cause and Effect

Cause–Effect reasoning: Link import surge to domestic price movement in a commodity market. Statement I: The Government imported large quantities of sugar under trade agreements with other countries. Statement II: Sugar prices in the domestic market fell sharply in recent months. Choose the correct option describing the relationship.

Q: Cause–Effect reasoning: Link import surge to domestic price movement in a commodity market. Statement I: The Government imported large quantities of sugar under trade agreements with other countries. Statement II: Sugar prices in the domestic mark…

Market mechanics Higher imports increase supply; other things equal, excess supply pushes prices down. Causal chain Import surge (I) → supply expansion → price falls (II). Final Answer Statement I is the cause and Statement II is its effect

Difficulty: Easy

Statement I is the cause and Statement II is its effect
Statement II is the cause and Statement I is its effect
Both are independent causes
Both are effects of independent causes
Both are effects of a common cause

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

Explanation:

Market mechanics
Higher imports increase supply; other things equal, excess supply pushes prices down.

Causal chain
Import surge (I) → supply expansion → price falls (II).

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

← Previous Question Next Question→

Discussion & Comments

No comments yet. Be the first to comment!

Join Discussion

More Questions from Cause and Effect

Discussion & Comments