Question

Given below are two statements:
Statement I :Changing competition in market place is the primary reason for govt involvement in business globally.
Statement II:Increase in cost of production is the primary reason for govt in business globally.
In the light of the above statements,choose the most appropriate answer from the options given below:

• A. Both Statement I and Statement II are correct
• B. Both Statement I and Statement II are incorrect
• C. Statement I is correct but Statement II is incorrect
• D. Statement I is incorrect but Statement II is correct

Answer 1

The Correct Option is C

To determine the correctness of the given statements, let's analyze each one individually in the context of government involvement in business globally.

1. Statement I: Changing competition in the marketplace is the primary reason for government involvement in business globally.
   • Governments often step into the business environment to regulate competition and maintain a fair marketplace. This can include laws to prevent monopolies, ensure fair trade practices, and promote competition.
   • In many cases, governments also engage in or regulate business activities to safeguard national interests, support essential services, and promote economic stability. Therefore, changes in market competition often lead governments to either tighten or relax regulations and involvement.
   • Thus, Statement I is correct as it highlights a valid reason for government involvement in business globally.
2. Statement II: Increase in the cost of production is the primary reason for government involvement in business globally.
   • While cost of production can influence certain business and economic policies, it is not a primary reason for government involvement globally.
   • Governments may address production costs indirectly through policies such as subsidies, tax incentives, or support for research and development, but these are tools for achieving broader economic goals like enhancing competitiveness or supporting industries.
   • Therefore, while production costs may be a factor, they are not a primary reason for government intervention and Statement II is incorrect.

Based on this analysis, the most appropriate answer is: Statement I is correct but Statement II is incorrect. This selection effectively reflects the nature of government involvement in business, emphasizing market competition as a primary driver, rather than merely production costs.