Given below are pairs of events (i) and (ii). You have to read them and decide their nature of relationship. You have to assume that the information given in both (i) and (ii) is true and not assume anything beyond the given information in deciding the answer. Event (i) The prices of imported goods dropped significantly this year. Event (ii) The government reduced the tax on importing goods.
Event (i) is the effect and event (ii) is its immediate and principal cause.
Imported Goods: Analyzing Cause and Effect
In this problem, we are given two events, Event (i) and Event (ii), and our task is to determine the nature of their relationship, assuming both pieces of information are true.
- Event (i): The prices of imported goods dropped significantly this year.
- Event (ii): The government reduced the tax on importing goods.
Understanding Event (i): Prices of Imported Goods Dropped
Event (i) states that the cost of imported goods, which are products brought into a country from another country, has gone down a lot this year. When prices drop, it usually means that these goods become cheaper for consumers to buy in the market.
Understanding Event (ii): Government Reduced Tax on Importing Goods
Event (ii) mentions that the government has lowered the tax that is charged on goods brought into the country. This tax is often called an import duty or tariff. When this tax is reduced, it means that the cost for businesses to bring goods into the country becomes lower.
Establishing the Relationship between the Events
Now, let's consider how these two events might be connected. We need to think about which event could directly lead to the other.
- When the government reduces the tax on importing goods (Event (ii)), the cost of bringing those goods into the country for importers decreases.
- Businesses that import these goods now pay less in taxes.
- To stay competitive or to pass on the savings to consumers, these businesses often reduce the selling price of the imported goods.
- Therefore, a reduction in the tax on importing goods directly leads to a decrease in the prices of those imported goods in the market.
Based on this economic principle, Event (ii) (the government reducing the tax) is the direct cause, and Event (i) (the prices of imported goods dropping) is the immediate and principal effect.
Evaluating the Options
Let's look at the given options in light of our analysis:
- Option 1: Both the events are effects of some independent causes.
This is incorrect because there is a clear and direct relationship between the two events. They are not independent of each other.
- Option 2: Event (ii) is the effect and event (i) is its immediate and principal cause.
This suggests that a drop in the prices of imported goods caused the government to reduce the tax, which is generally not how economic policy works in this context. Governments reduce taxes to influence prices, not usually as a direct reaction to price drops in this manner.
- Option 3: Both the events are effects of some common cause.
While there might be broader economic factors at play, the relationship between a specific tax reduction and a price drop is very direct, making a common, indirect cause less likely to be the *principal* relationship.
- Option 4: Event (i) is the effect and event (ii) is its immediate and principal cause.
This aligns perfectly with our analysis. The government's decision to reduce import tax (Event (ii)) directly and immediately led to the significant drop in the prices of imported goods (Event (i)). This is a fundamental concept in economics regarding how taxes and tariffs impact market prices.
Conclusion
The reduction in the tax on importing goods directly lowers the cost for businesses, which in turn leads to a reduction in the market prices of those imported goods. Thus, Event (ii) is the cause, and Event (i) is its effect.
Important Questions from Cause and Effect
In this question, two statements I and II have been given. These statements may be independent causes or effects of independent causes or a common cause. One of the statements may be the effect of the other statement. Read both statements and select the correct answer.
I. Since the past three years, State M has reported a sharp and substantial decline in the state’s agricultural produce.
II. In the last five years, there has been an increase in the overall average Rainfall by 6% in State M bringing respite to the farmers.
In this question, two statements I and II have been given. These statements may be independent causes or effects of independent causes or a common cause. One of the statements maybe the effect of the other statement. Read both statements and select the correct answer.
I. This year College X reduced the cut-off marks to 50 from 60 for the entrance exam.
II. In the last two years, the Students Union in College X has been actively negotiating with the college administration regarding the Quality of food and Health and Hygiene standards at the College Canteen.
In this question, two statements I and II have been given. These statements may be independent causes or effects of independent causes or a common cause. One of the statements may be the effect of the other statement. Read both statements and select the correct answer.
I. Over the last two years 22% of the Company P’s manpower was laid off.
II. Over the past two years Company P has sold off many of their major assets.
Directions: Given below is a pair of statements (i) and (ii). Assuming that the information given in both (i) and (ii) is true, decide the nature of their relationship. To determine the answer, do not assume anything beyond the given information.
Statement (i): High level of air pollution in the city
Statement (ii): Increase in respiratory and health-related problems in the population
Below a question is given with two statements (I) and (II). These statements may be either independent causes or may be effects of independent causes or a common cause. One of these statements may be the effect of the other statement. Read both the statements and decide which of the following answer choice correctly depicts the relationship between these two statements.
I. The staff of the factory called off the strike they were holding protesting against the low wages.
II. The staff of the factory went on a strike, anticipating a threat to their jobs.
