**Question:** Given below are two statements: Statement I: Trickle Down Theory says that let business flourish, since their profits ultimately trickle down to lower income individuals. Statement II: Economic Theory predicts that inequality will increase during recessions and decline during economic booms. In the light of the above statements, choose the most appropriate answer from the options given below:
**Options:**
(A) Both Statement I and Statement II are correct
(B) Both Statement I and Statement II are incorrect
(C) Statement I is correct and Statement II is incorrect
(D) Statement I is incorrect and Statement II is correct
**Correct Answer:** C
**Explanation:** Statement I is correct about Trickle Down Theory. Statement II is incorrect as economic theory suggests inequality typically decreases during recessions due to reduced returns to capital.
*Published: September 05, 2025 at 11:04 AM*
*Tags: HPAS 2024, Prelims, General Studies, Himachal Pradesh Administrative Service*