Given below are two statements: one is labelled as Assertion (A) and the other is labelled as Reason (R).
Assertion (A): A group of individuals for whom decisions relating to consumption are jointly determined is treated as one household.
Reason (R): The market in which firms sell their products could not function without the demand coming from households.
In the light of the above statements, choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Both (A) and (R) are true but (R) is not the correct explanation of (A).
Assertion (A): A group of individuals for whom decisions relating to consumption are jointly determined is treated as one household. — True. A household is a single person, or a group, whose consumption decisions are taken together.
Reason (R): The market in which firms sell their products could not function without the demand coming from households. — True. Households buy what firms produce, so they supply the demand in that market.
Why R does not explain A?
R is about the role households play as buyers. It does not say what makes a group one household.
A is true because of the meaning of a household: a group counts as one household when its consumption decisions are jointly determined.
NCERT (2026-27): “1.2 Context of the Present Book of Macroeconomics … Apart from the firms and the government, there is another major sector in an economy which is called the household sector. By a household we mean a single individual who takes decisions relating to her own consumption, or a group of individuals for whom decisions relating to consumption are jointly determined. Households also save and pay taxes. … Indeed the market in which the firms sell their products could not have been functioning without the demand coming from the households.” |