Logical Reasoning - Cause and Effect - Discussion

Discussion :: Cause and Effect - Cause and Effect (Q.No.3)

In each of the following questions, two statements numbered I and II are given. There may be cause and effect relationship between the two statements. These two statements may be the effect of the same cause or independent causes. These statements may be independent causes without having any relationship. Read both the statements in each question and mark your answer as

  • (A) If statement I is the cause and statement II is its effect;
  • (B) If statement II is the cause and statement I is its effect;
  • (C) If both the statements I and II are independent causes;
  • (D) If both the statements I and II are effects of independent causes; and
  • (E) If both the statements I and II are effects of some common cause.



  1. The Reserve Bank of India has recently put restrictions on few small banks in the country.
  2. The small banks in the private and co-operative sector in India are not in a position to withstand the competitions of the bigger in the public sector.

[A]. Statement I is the cause and statement II is its effect
[B]. Statement II is the cause and statement I is its effect
[C]. Both the statements I and II are independent causes
[D]. Both the statements I and II are effects of independent causes
[E]. Both the statements I and II are effects of some common cause

Answer: Option B


The inability of the small banks to compete with the bigger ones shall not ensure security and good service to the customers, which is an essential concomitant that has to be looked into by the Reserve Bank. I seems to be a remedial step for the same.

Rinkita said: (May 10, 2014)  
By applying restrictions, smaller banks won't be able to gain that position, bigger one's have. How would they grow?

Shouldn't the answer be, that because Reserve bank has put restrictions on smaller banks, that's why they are not able to compete.

Adi said: (Sep 18, 2014)  
I think the answer should be A.

Reserve bank is cause and effect is on small banks.

Ritika said: (Dec 16, 2014)  
I agree the answer should be A. Since Reserve Bank has put restrictions. Small Banks may not be able to explore a lot of options to be in the competition with bigger banks.

Hence the effect of the restriction would be the demotivating factor for any small banks.

Bruno said: (Nov 17, 2015)  
The answer should not be A, that would be a broken assumption. I is not necessarily connected to II. They may be connected, but they may not also.

Generally my assumption would be these tests are full of subjectivity, the subjective and non-specific use of words (example ''few small banks'' while in II it says ''the small banks'') opens up broken assumptions (may or may not be assumptions).

The lack of proof to sustain these assumptions breaks the system as a whole, while other logically proved questions like those where you are given proof to deduct other things out of (the CEO one for example), are exact and indifferent, these can't truly test your logical reasoning like the other ones.

While a probability system should be used, the different interpretation of words (literal, abstract, generalized, specific, etc) and context disqualifies these kind of questions (also disqualifies whoever made this).

In the logical ones (''who's next to who, who's in the middle of both'' kind) the context is explicit and simple, given a true logical sequence to start with, these aren't, with different interpretations of context.

The number ones are more specific too, while the word grouping ones are not so much (Probably why IQ tests never use words and instead use images and numbers). I found 4 different resolutions to this question also, not of which were probable enough to make sense.

Sulabh Srivastava said: (Sep 29, 2016)  
The answer B is right because we need to think only about given statement, not use your personal knowledge and suggestion because our constraints are only two statements.

Prb said: (Jul 7, 2017)  
"Commitment to customer" was not mentioned anywhere in the given statements.

R K said: (Oct 4, 2020)  
RBI has taken step after small banks face tough competition. Concentrate on word RECENTLY.

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