Question

Assertion (A): General forces such as social, political, legal and technological conditions affect an individual firm only indirectly.

Reason (R): General forces have an impact on all business enterprises, in contrast to, specific forces that affect individual firms directly and immediately in their day-to-day working.

Choose the correct alternative from the following:

Options

• Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are incorrect.

• Assertion (A) is correct, but Reason (R) is incorrect.

Answer 1

Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).

Explanation:

• General (macro) forces- social, political, legal, and technological affect all businesses and therefore influence any single firm only indirectly.
• Specific (micro) forces- such as customers, suppliers, competitors, and investors- act directly and immediately on individual firms’ day-to-day operations.
• Because R correctly describes the scope and contrast between general and specific forces, it explains why A is true.