Question

In the following question, a statement of Assertion (A) is followed by a statement of Reason (R). Choose the appropriate answer from the options given below as the correct answer:
Assertion (A): Multi-National Companies help in integrating production and markets across countries.
Reason (R): They set up production units in one country and export goods and components to other countries.
Choose the correct option-

• A. Both A and R are true, and R is the correct explanation of A
• B. Both A and R are true, but R is not the correct explanation of A
• C. A is true, but R is false
• D. A is false, but R is true

Hint:

Ask how MNCs link countries. Then check if the Reason describes that very method.

Answer 1

The Correct Option is A

Step 1: Understand what is asked:
The question gives an Assertion (A) and a Reason (R). We must decide if each one is true, and then if R explains A.
A Multi-National Company (MNC) is a company that owns or controls production in more than one country.

Step 2: Check the Assertion (A):
A says that MNCs help in integrating production and markets across countries.
Integration means linking. An MNC spreads its work across many countries, so the production of one country gets tied to the production and markets of others.
Earlier, countries were linked mainly through trade of finished goods. Now MNCs link them through production itself, and the goods they make are sold in many markets.
So the Assertion is TRUE.

Step 3: Check the Reason (R):
R says that MNCs set up production units in one country and export goods and components to other countries.
This is how MNCs really work. They place a factory where land, labour and other costs are low, make the goods or parts there, and ship them to other countries where the goods are sold or assembled.
So the Reason is also TRUE.

Step 4: Check whether R explains A:
Ask: how do MNCs integrate production and markets? They do it by making goods in one country and sending goods and components to others.
The exports of goods and parts are exactly the link that joins the production of one country with the markets of another.
So R is the correct explanation of A.

Step 5: Why the other options are wrong:
Option B is wrong because it says R is not the explanation of A. But R describes the very method by which integration happens.
Option C is wrong because it calls R false. MNCs do produce in one country and export to others.
Option D is wrong because it calls A false. MNCs are the main agents that link production and markets across countries today.

Final Answer:
Both A and R are true, and R is the correct explanation of A. This is option (A), option number 1. \[ \boxed{\text{(A) Both A and R are true, and R is the correct explanation of A}} \]