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Determination of Income and Employment — Economics STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceEconomicsDetermination of Income and Employment1 Mark
Question
Assertion (A): AS increases proportionate to the increase in AD as long as there is excess capacity in the economy.
Reason (R): Excess capacity arises because of the deficiency of demand, so that as demand increases, supply increases proportionately.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Both Assertion (A) and Reason (R) are false
✓

Answer

a)

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