Direction : Following item consists of two statements, one labelled as the 'Statement (I)' and the other as 'Statement (II)'. Examine these two statements carefully and select the answer to the item using the codes given below :
Statement (I) : The effects of an income tax on consumption, savings, and investment are micro effects.
Statement (II) : Income tax is an example of a direct tax.
1
Both Statement (I) and Statement (II) are individually true and Statement (II) is the correct explanation of Statement (I)
2
Both Statement (I) and Statement (II) are individually true but Statement (II) is not the correct explanation of Statement (I)
3
Statement (I) is true but Statement (II) is false
4
Statement (I) is false but Statement (II) is true