Question

Assertion (A): Trade is the basis of the world’s economic organisation and is related to the foreign policy of nations.

Reason (R): The international trade benefits the world economy if different countries practise specialisation and division of labour in the production of commodities or provision of services. Each kind of specialisation can give rise to trade.

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

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

C. Both (A) and (R) are incorrect.

D. (A) is correct but (R) is incorrect.

Answer 1

Correct answer is (B) Both (A) and (R) are true and (R) is the correct explanation of (A)

Trade is the basis of the world’s economic organisation and is related to the foreign policy of nations.

The international trade benefits the world economy if different countries practise specialisation and division of labour in the production of commodities or provision of services. Each kind of specialisation can give rise to trade.