Assertion (A): Purchasing power increases,
price decreases and vice versa.
Reason (R): The production of goods
decline, the price of goods increases and
then the purchasing power is affected.
a) A is correct, R is false
b) Both A and R are false statements
c) A is correct but R is not a correct
explanation
d) A is correct, R is the correct explanation
of A
Answers
Answered by
6
Answer:
d.A is correct and R is correct explanation.
Answered by
4
Assertion is correct and , Reason is the correct explanation of assertion due to following reason:
- It is due to income effect on purchasing power , according to which quantity demand decreases with increase in price of product .
- This ultimately affects the purchasing power of one's income or money by reducing it when price of product increase.
- According to definition of purchasing power which states that any increase or decrease by loss or gain of dependency of how much consumer can buy with their money or the amount of income they were given.
Option (d) is the right answer .
Similar questions