Economics · Macroeconomics
Given below are two statements: one is labeled as Assertion (A) and the other is labeled as Reason (R). Assertion (A): In a two-sector model with a financial system, factor payments are no longer equal to consumption expenditure. Reason (R): A part of factor payments received by households is saved in the financial system, which is then lent to firms as investment.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A is false but R is true
- 2A is true but R is false
- 3Both A and R are true, but R is NOT the correct explanation of A
- 4Both A and R are true, and R is the correct explanation of A✓
Correct answer
Both A and R are true, and R is the correct explanation of A
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