Question:
Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative:
Assertion (A): When the allocative function is performed well, scarce resources are allocated to the most productive firms.
Reason (R): Allocative function directs funds into their most productive investment opportunity.
Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative:
Assertion (A): When the allocative function is performed well, scarce resources are allocated to the most productive firms.
Reason (R): Allocative function directs funds into their most productive investment opportunity.
Reason (R): Allocative function directs funds into their most productive investment opportunity.
Show Hint
Allocative function ensures optimal use of limited resources for maximum economic efficiency.
Updated On: Jan 13, 2026
- Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation.
- Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation.
- Assertion (A) is true, Reason (R) is false.
- Assertion (A) is false, Reason (R) is true.
Show Solution
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The Correct Option is A
Solution and Explanation
Both statements are true and related: the allocative function ensures that funds are directed to their most efficient use, meaning they go to firms where productivity and returns are high. Hence, Reason (R) is a correct explanation for Assertion (A).
Final Answer: (A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation.
Final Answer: (A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation.
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