Multiple choice

Assertion (A) : Global income inequality has shown an increase in trend Reason (R) : Prebiseh -Singer propounded a secular decline in the terms of trade primary producers exporters.

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

  2. both (A) and (R) are false

  3. Both (A) and (R) are true and (R) is correct reason

  4. Both (A) and (R) are true but (R) is not the correct explanation
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Global income inequality has indeed increased over recent decades, with divergence between high-income and low-income countries. The Prebisch-Singer hypothesis argues that terms of trade for primary commodity exporters secularly decline relative to manufactured goods exporters, contributing to this inequality. While both statements are true, the Prebisch-Singer mechanism is only one of several factors explaining rising inequality - others include technological change, financial globalization, and institutional differences - so R is not the complete or sole correct explanation for A.

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