Target Exam

CUET

Subject

Economics

Chapter

Indian Economic Development: Human Capital Formation in India

Question:

Read the following statements - Assertion (A) and Reason (R):
Assertion: Firms insist that the workers should work for a specific period of time after their on-the-job training.
Reason: Since the firm has incurred some expenses on training, it wants to recover the benefits of enhanced productivity owing to training.
From the given alternatives choose the correct one:

Options:

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

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

Assertion (A) is true but Reason (R) is false.

Assertion (A) is false but Reason (R) is true.

Correct Answer:

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

Explanation:

The correct answer is option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Assertion: Firms insist that the workers should work for a specific period of time after their on-the-job training. This is correct. Firms often require workers to work for a fixed period after completing on-the-job training because training increases the worker’s skills and productivity. If a worker leaves immediately after training, the firm does not get any return from the investment it made in training.
Reason: Since the firm has incurred some expenses on training, it wants to recover the benefits of enhanced productivity owing to training.  This is correct.On-the-job training involves costs for the firm such as trainers’ time, use of machines, materials, and reduced output during the training period. After training, the worker becomes more productive, and this higher productivity generates benefits for the firm.

Why Reason (R) explains Assertion (A): Because the firm has incurred expenses on training, it wants to recover these costs by employing the trained worker long enough to enjoy the gains from enhanced productivity. Therefore, firms insist that workers serve for a specific period after training. This directly links the reason to the assertion.