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Cause and Effect Reasoning: Direct Causes, Common Causes and Independent Events

The five options • Which came first • Is it enough to cause it? • Common causes • Unrelated events

Banking 📅 Last updated: 2026-10-24

In cause and effect questions you get two statements describing events. You must decide how they are related. Bank exam papers commonly use this set of five options:

  1. Statement I is the cause and statement II is its effect.
  2. Statement II is the cause and statement I is its effect.
  3. Both statements are independent causes.
  4. Both statements are effects of independent causes.
  5. Both statements are effects of some common cause.

So there are 2 direct relationships, one in each direction, plus 3 indirect ones: 5 options in all. The practice questions on this page each show four of them, keeping the ones that matter for that pair.

Work through the options as a sequence of questions rather than reading all five at once. First, could either event have produced the other? If yes, decide the direction and stop. If not, is there one event you can name that would produce both? If yes, it is a common cause. Only if both answers are no should you choose between the two 'independent' options. Asking the questions in this order keeps you from weighing all five options at once and saves time.

Check direct causation first, using two tests.

  • Order in time: a cause must come before its effect. Words like 'next week', 'after' or 'following' are strong hints.
  • Enough to produce it: the cause must plausibly be able to produce the effect on its own, in the ordinary way the world works. A link that needs several extra steps or unusual assumptions does not count.

Worked example 1: I causes II

I. The government raised the import duty on gold. II. Gold imports fell from 80 tonnes to 60 tonnes in the following months.

The duty came first and makes imported gold costlier, which reduces imports, here by 25%. I is the cause and II is its effect.

Worked example 2: II causes I

I. Schools in the district were closed for a week. II. The district received 300 mm of rain in 24 hours, against a normal of 50 mm.

That rainfall is 6 times the normal amount, enough to flood roads and make travel unsafe. Closing schools cannot cause rain, so II is the cause and I is its effect, although II is written second.

Dates help when they are given. If the flood began on 3 July and schools were closed from 4 to 10 July, the closure lasted 7 days and began after the flood, which confirms the direction.

If neither event causes the other, ask whether a single unstated event would explain both. Weather, strikes, festivals, policy announcements and price changes are typical common causes. The common cause is almost never written in the question; you are expected to recognise that one exists.

Worked example 3: a common cause

I. Many trains in northern India were cancelled on Monday. II. Dozens of flights at Delhi airport were delayed on Monday.

Cancelled trains do not delay flights, and delayed flights do not cancel trains. Dense fog would explain both. Both are effects of a common cause.

If the two events have nothing to do with each other, choose between the last two options by asking what kind of statements they are. Statements that describe outcomes, such as a price change or a result, are effects of their own separate causes. Statements that describe actions taken to bring something about, such as two unrelated decisions, are treated as independent causes.

Worked example 4: effects of independent causes

I. The price of steel rose this month. II. A new film broke box-office records this week.

Both are outcomes, and nothing links them. Both are effects of independent causes.

Worked example 5: a tempting but false link

I. A city's sales of umbrellas rose. II. The city's cricket team lost its home match.

Rain might explain both, but the statements do not suggest rain, and a lost match has many possible causes. Without a clear single cause, do not invent one. Both are effects of independent causes.

  • ✘ Assuming statement I is the cause because it is written first.
  • ✘ Accepting a causal link that needs several unstated steps.
  • ✘ Inventing a common cause for two events that are only loosely connected.
  • ✘ Picking 'independent causes' for two outcomes, which are effects.

Related topics: course of action, strengthening and weakening arguments and statement and conclusions.

Q1. I. The central bank raised its key interest rate by 0.5 percentage point. II. Several banks increased their home-loan rates the following week. easy

✅ Answer: (a) Statement I is the cause and statement II is its effect

💡 Explanation: The rate rise came first, and banks commonly pass a higher central bank rate on to borrowers. I is the cause and II is its effect.

Q2. I. The city's hospitals reported a rise in patients with breathing problems. II. Air quality in the city was 'severe' for ten days in a row. easy

✅ Answer: (b) Statement II is the cause and statement I is its effect

💡 Explanation: Patients in hospital cannot make the air worse, but ten days of severe air can cause breathing problems. II is the cause and I is its effect, even though II is written second.

Q3. I. Flights at the city airport were delayed this morning because pilots could not see the runway clearly. II. Trains into the city ran late this morning as drivers slowed down for poor visibility. medium

✅ Answer: (c) Both statements are effects of some common cause

💡 Explanation: Late flights do not delay trains, nor the reverse. Both were caused by the same poor visibility, such as dense fog, so they are effects of a common cause.

Q4. I. A software company's quarterly profit rose by 15%. II. Heavy rain flooded parts of a coastal town. easy

✅ Answer: (d) Both statements are effects of independent causes

💡 Explanation: There is no link between the two: neither causes the other and nothing plausible causes both. Each is the result of its own causes, so they are effects of independent causes.

Q5. I. Onion prices in the market rose from ₹40 to ₹70 per kg. II. Unseasonal rain damaged the onion crop in the main growing areas. medium

✅ Answer: (a) Statement II is the cause and statement I is its effect

💡 Explanation: Crop damage cuts supply, which pushes prices up; here they rose by 75%. Higher prices cannot damage crops, so II is the cause and I is its effect.

Q6. I. Shops in the market area stayed shut all day on the day of the statewide strike. II. Buses and autorickshaws did not run in the city on the same day. medium

✅ Answer: (b) Both statements are effects of some common cause

💡 Explanation: Closed shops do not stop buses, and missing buses do not explain every shop shutting all day. Both follow from the strike, so they are effects of a common cause.

Does the order of the statements tell me which is the cause?

No. The question may give the effect as statement I and the cause as statement II. Decide the direction from the events themselves: which must have happened first, and which could have produced the other.

How do I choose between 'common cause' and 'independent causes'?

Ask whether one event you can name would explain both statements. If a single cause such as fog, a strike or a flood would produce both, choose common cause. If the two events have nothing to do with each other, they are effects of independent causes.

All problems and solutions on this page are original. No outside facts are relied on; every numeric answer is recomputed by software before publishing.

How this page was prepared. Drafted with AI assistance (Claude (Anthropic AI model)) from the sources listed above. 5 calculations on this page were recomputed by software and matched. Automated checks also covered structure, internal links and duplicate text. Software checks cannot confirm facts. Reviewed by praveenkumar on 2026-10-24 against the sources listed above.

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