Statements 1. The local co-operative credit society has decided to stop giving…

Concept: In cause-and-effect statement questions, decide whether one statement is the direct trigger (cause) for the situation described in the other (effect), whether the two statements describe genuinely independent causes, or whether both are effects flowing from some separate, unstated cause. The test is whether a real-world, direct link connects the two events in one particular direction.

Application: Deposits are the lending capital of a credit society. A large-scale withdrawal of deposits directly shrinks the pool of funds the society has available to lend. Stopping loan disbursal to farmers with immediate effect is the direct financial reaction to that shrunken lending capacity. So the withdrawal of deposits is the trigger, and the halt in lending is its consequence.

Why the other readings do not fit:

• Treating the loan freeze as the trigger for the withdrawals reverses the direction without support — there is no stated reason depositors would react to a lending decision aimed at a different group (farmer-borrowers).

• Treating the two events as unrelated independent causes ignores the direct financial dependency between deposits held and funds available to lend.

• Treating both as effects of some separate hidden cause requires an unstated third trigger — no such external event (for example a regulatory order affecting both groups at once) appears in the statements, while a direct link between the two stated events already explains the sequence.

Cross-check: the size and direction of this dependency (withdrawals shrink lend-able funds, immediately) confirms the second statement is the operative cause and the first is the resulting action.