Assertion (A): The labour market is one of the ways in which an open economy is linked with the rest of the world.
Reason (R): Laws in most countries leave the movement of labour between countries unrestricted.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A) is true but (R) is false.
Assertion (A): The labour market is one of the ways in which an open economy is linked with the rest of the world. — True. Firms can choose where to locate production and workers can choose where to work.
Reason (R): Laws in most countries leave the movement of labour between countries unrestricted. — False. There are various immigration laws which restrict the movement of labour between countries.
NCERT (2026-27): “… There are three ways in which these linkages are established. 1. Output Market: An economy can trade in goods and services with other countries. This widens choice in the sense that consumers and producers can choose between domestic and foreign goods. 2. Financial Market: Most often an economy can buy financial assets from other countries. This gives investors the opportunity to choose between domestic and foreign assets. 3. Labour Market: Firms can choose where to locate production and workers to choose where to work. There are various immigration laws which restrict the movement of labour between countries. Movement of goods has traditionally been seen as a substitute for the movement of labour. …” |