UGC NET COMMERCE July 2018 Q5
Reason (R): High rate of growth, ceteris paribus, is associated with rise in imports and increase in the imports, ceteris paribus, is associated with a fall in the relative price of imports.
- Option : A
- Explanation : The relative price of imports (i.e., the relative change in the prices of imports and domestic goods). An increase in the imports, ceteris paribus, is associated with a fall in the relative price of imports.
From the above factors, it can be inferred that the volume of imports tends to be very high when there is a conjuncture of high rate of economic growth and a sharp fall in the relative price of imports and vice versa.
