Assertion (A): AS increases proportionate to the increase in AD so long as there is excess capacity in the economy. Reason (R): Excess capacity arises because of excess supply.
a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
c)Assertion (A) is true, but Reason (R) is false.
d)Assertion (A) is false, but Reason (R) is true.