Question : Assertion: Changes in aggregate supply can cause inflation in an economy.
Reason: Increases in aggregate supply can lead to higher production costs, which in turn can drive up prices and cause inflation.
Option 1: Both Assertion and Reason are correct, and the Reason is the correct explanation of the Assertion.
Option 2: Both Assertion and Reason are correct, but the Reason is NOT the correct explanation of the Assertion.
Option 3: Assertion is correct, but the Reason is incorrect.
Option 4: Assertion is incorrect, but the reason is correct
Correct Answer: Both Assertion and Reason are correct, and the Reason is the correct explanation of the Assertion.
Solution : The correct answer is (A) Both Assertion and Reason are correct, and the Reason is the correct explanation of the Assertion.
The Assertion that changes in aggregate supply can cause inflation in an economy is correct. Changes in aggregate supply can indeed contribute to inflationary pressures in an economy.
The Reason provided correctly explains this relationship. Increases in aggregate supply can lead to higher production costs. When production costs rise, businesses may pass on these increased costs to consumers in the form of higher prices for goods and services. This can drive up the overall price level in the economy, leading to inflation.
Therefore, both the Assertion and Reason are correct, and the Reason provides a valid explanation of how changes in aggregate supply can cause inflation in an economy.
Question : Assertion: Changes in the aggregate demand curve can cause shifts in the aggregate supply curve.
Reason: Changes in aggregate demand can affect businesses' expectations and decisions regarding production levels and future investments, resulting in shifts in the aggregate supply curve.
Question : Assertion: An increase in the exchange rate can lead to an increase in aggregate supply.
Reason: A higher exchange rate makes imports more expensive, thereby encouraging domestic production and increasing aggregate supply.
Question : Assertion: An increase in aggregate supply will always result in economic growth.
Reason: When aggregate supply increases, it leads to increased production and output, which is indicative of economic growth.
Question : Assertion: Technological advancements can have no impact on aggregate supply.
Reason: Technological advancements primarily affect individual businesses and do not have a significant impact on the overall supply in the economy.
Question : Assertion: The nature of management is universal.
Reason: The principles and techniques of management can be applied in all types of organizations.
Option 1: Both assertion and reason are correct, and the reason explains the assertion.
Option 2: Both assertion and reason are incorrect.
Option 3: The assertion is correct, but the reason is incorrect.
Option 4: The assertion is incorrect, but the reason is correct.
Option 5: Both assertion and reason are correct, and the reason is not the correct explanation of the assertion.
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