Read the two statements given below.
Assertion (A): The dominant thinking in economics before Keynes was that all the labourers who are ready to work will find employment and all the factories will be working at their full capacity.
Reason (R): The school of thought in economics before Keynes is known as the classical tradition.
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): The dominant thinking in economics before Keynes was that all the labourers who are ready to work will find employment and all the factories will be working at their full capacity. — True. Before Keynes, economists expected full employment of workers and factories.
Reason (R): The school of thought in economics before Keynes is known as the classical tradition. — True. This thinking is called the classical tradition.
Why R does not explain A?
A name does not explain a belief. R tells us what the school is called, not why it thought every willing worker would find a job.
A is a fact about what economists believed before Keynes. Neither statement gives the reason for that belief. The belief was given up after the Great Depression of 1929 showed that unemployment can last a long time.
NCERT (2026-27): “1.1 Emergence of Macroeconomics Macroeconomics, as a separate branch of economics, emerged after the British economist John Maynard Keynes published his celebrated book The General Theory of Employment, Interest and Money in 1936. The dominant thinking in economics before Keynes was that all the labourers who are ready to work will find employment and all the factories will be working at their full capacity. This school of thought is known as the classical tradition.” “… These events made economists think about the functioning of the economy in a new way. The fact that the economy may have long lasting unemployment had to be theorised about and explained. …” |