Question : Directions: In this question, two statements I and II have been given. These statements may be independent causes or effects of independent causes or a common cause. One of the statements may be the effect of the other statement. Read both statements and select the correct answer.
I. Over the last two years 22% of Company P’s manpower was laid off.
II. Over the past two years Company P has sold off many of their major assets.
Option 1: Both I and II are effects of a common cause.
Option 2: I is the cause and II is its possible effect.
Option 3: II is the cause and I is its possible effect.
Option 4: Both I and II are independent causes.
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Correct Answer: Both I and II are effects of a common cause.
Solution :
Given:
Statement I:
Over the last two years 22% of Company P’s manpower was laid off.
Statement II: Over the past two years Company P has sold off many of their major assets.
When a company performs poorly or incurs losses in its business, it may make decisions that affect its workforce and potentially its share price, thus both of these factors contribute to the same problem.
So, both I and II are effects of a common cause. Hence, the first option is correct.
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