Question:
I. Financial institutions are lax, unregulated
II. Today, the world is passing through a serious phase of economic crisis
I. Financial institutions are lax, unregulated
II. Today, the world is passing through a serious phase of economic crisis
II. Today, the world is passing through a serious phase of economic crisis
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For macro questions, institutional/regulatory conditions usually act as \emph{causes}, while broad economic indicators (growth, inflation, crises) show up as \emph{effects}.
Updated On: Aug 11, 2025
- I is the main cause and II is the main effect
- I is effect but II is not the main cause
- II is the main cause and I is the main effect
- II is an effect but I is not the main cause
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The Correct Option is A
Solution and Explanation
Weak oversight and lax regulation in financial institutions (I) typically lead to excessive risk-taking, asset bubbles, and contagion—culminating in economic crises (II).
Therefore, I is the primary cause and II the resulting effect.
Therefore, I is the primary cause and II the resulting effect.
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