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    Question

    Below in each of the questions are given two statements I and II. These statements may be either independent causes or may be effects of independent causes or a common cause. One of these statements may be the effect of the other statements. Read both the statements and decide which of the following answer choices correctly depicts the relationship between these two statements.

    Statements: 1. The company’s profits have

    declined sharply this year. 2. The company faced stiff competition from new market entrants.
    A Statement 1 is the cause, and statement 2 is its effect. Correct Answer Incorrect Answer
    B Statement 2 is the cause, and statement 1 is its effect. Correct Answer Incorrect Answer
    C Both statements 1 and 2 are independent causes. Correct Answer Incorrect Answer
    D Both statements 1 and 2 are effects of a common cause. Correct Answer Incorrect Answer

    Solution

    Increased competition (Statement 2) likely reduced the company’s profits (Statement 1).

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