Multiple choice

Assertion (A) : As per the recent Indian experience, a fall in the of employment generation is associated with a fall in the rate of economic growth. Reason (R) : Working of the Okun's law.

  1. Both (A) and (R) are true and (R) is the correct explanation of (A).

  2. Both (A) and (R) are true but (R) is not the correct explanation of (A).

  3. (A) is true but (R) is false.

  4. (A) is false but (R) is true.
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A Correct answer
Explanation

Okun's Law states an inverse relationship between unemployment and GDP growth - when growth falls, unemployment rises. The assertion correctly captures this: a fall in employment generation (rising unemployment) is associated with slower economic growth. The reason correctly identifies Okun's Law as the underlying principle, making it the proper explanation for the observed phenomenon.

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