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Cause–Effect reasoning: Link petroleum price revision to inflation movement over the week. Statement I: The Government reduced petroleum product prices by 5% a week after increasing them by 10%. Statement II: The inflation rate dropped marginally during the last week. Choose the correct option describing the relationship.

Difficulty: Easy

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

Explanation:


Approach
Petroleum products have significant weight in price indices. A reduction in administered/retail fuel prices generally eases headline inflation, other things equal.


Reasoning
The 5% cut (Statement I) would mechanically lower fuel components, contributing to a marginal weekly drop in inflation (Statement II). The reverse direction is less direct.


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

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