Read the following statements - Assertion (A) and Reasoning (R):
Assertion: Rationing system is enforced by the government.
Reasoning: Government needs to meet the situation of deficient demand through rationing system.

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

The correct answer is Option 3: Assertion (A) is true but Reasoning (R) is false.

• Assertion (A) is true:

  • The rationing system is enforced by the government to regulate the distribution of scarce goods and ensure that essential commodities are fairly distributed, especially in situations of shortages or excessive demand (e.g., war, famine, or supply crises).

• Reasoning (R) is false:

  • Deficient demand refers to a situation where aggregate demand is too low, leading to unemployment and economic slowdown.
  • Rationing is not used to handle deficient demand; instead, the government tackles deficient demand using expansionary fiscal and monetary policies (e.g., lowering taxes, increasing government spending, reducing interest rates).
  • Rationing is actually used in situations of excess demand (shortages), not deficient demand.