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Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): Money Multiplier refers to the process of creation of credit by the commercial Bank.
Reason (R): Money creation by commercial bank raises the National Income
- 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.
Correct answer is option 'B'. Can you explain this answer?
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Directions: In the following questions, a statement of assertion (A) ...
Assertion (A): Money Multiplier refers to the process of creation of credit by the commercial Bank.
Reason (R): Money creation by commercial bank raises the National Income
The correct answer is option 'B': Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).
Explanation:
Money multiplier is a concept in economics that refers to the process by which commercial banks create credit. It is related to the expansion of the money supply in an economy. When a commercial bank receives a deposit from a customer, it is required to keep a certain percentage of that deposit as reserves and can lend out the remaining amount. This process of lending out the remaining amount is known as credit creation or money creation.
Money Multiplier and Credit Creation:
- Money multiplier refers to the process through which commercial banks create credit by lending out a portion of the deposits they receive.
- When a commercial bank lends out money, it increases the money supply in the economy, as the borrower now has access to additional funds.
- This process of credit creation by commercial banks plays a crucial role in the expansion of the money supply and the overall functioning of the economy.
National Income and Money Creation:
- The reason stated in the assertion, that money creation by commercial banks raises the national income, is not a correct explanation.
- While money creation by commercial banks can have an impact on the national income, it is not the sole determinant.
- National income is influenced by various factors such as investment, government spending, exports, and imports, among others.
- Money creation by commercial banks can contribute to economic activity and stimulate spending, which can have an impact on national income.
- However, it is important to note that the relationship between money creation and national income is complex and influenced by multiple factors.
Conclusion:
In conclusion, while both the assertion and reason are true, the reason provided in the reason statement is not the correct explanation of the assertion. Money multiplier refers to the process of credit creation by commercial banks, but the impact of money creation on national income is influenced by various other factors.
Reason (R): Money creation by commercial bank raises the National Income
The correct answer is option 'B': Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).
Explanation:
Money multiplier is a concept in economics that refers to the process by which commercial banks create credit. It is related to the expansion of the money supply in an economy. When a commercial bank receives a deposit from a customer, it is required to keep a certain percentage of that deposit as reserves and can lend out the remaining amount. This process of lending out the remaining amount is known as credit creation or money creation.
Money Multiplier and Credit Creation:
- Money multiplier refers to the process through which commercial banks create credit by lending out a portion of the deposits they receive.
- When a commercial bank lends out money, it increases the money supply in the economy, as the borrower now has access to additional funds.
- This process of credit creation by commercial banks plays a crucial role in the expansion of the money supply and the overall functioning of the economy.
National Income and Money Creation:
- The reason stated in the assertion, that money creation by commercial banks raises the national income, is not a correct explanation.
- While money creation by commercial banks can have an impact on the national income, it is not the sole determinant.
- National income is influenced by various factors such as investment, government spending, exports, and imports, among others.
- Money creation by commercial banks can contribute to economic activity and stimulate spending, which can have an impact on national income.
- However, it is important to note that the relationship between money creation and national income is complex and influenced by multiple factors.
Conclusion:
In conclusion, while both the assertion and reason are true, the reason provided in the reason statement is not the correct explanation of the assertion. Money multiplier refers to the process of credit creation by commercial banks, but the impact of money creation on national income is influenced by various other factors.
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Directions: In the following questions, a statement of assertion (A) ...
The money multiplier measures the maximum amount of commercial bank money that can be created by a given unit of central bank money. That is, in a fractional-reserve banking system, the total amount of loans that commercial banks are allowed to extend (the commercial bank money that they can legally create) is a multiple of reserves; this multiple is the reciprocal of the reserve ratio.
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Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): Money Multiplier refers to the process of creation of credit by the commercial Bank.Reason (R): Money creation by commercial bank raises the National Incomea)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.Correct answer is option 'B'. Can you explain this answer?
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Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): Money Multiplier refers to the process of creation of credit by the commercial Bank.Reason (R): Money creation by commercial bank raises the National Incomea)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.Correct answer is option 'B'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): Money Multiplier refers to the process of creation of credit by the commercial Bank.Reason (R): Money creation by commercial bank raises the National Incomea)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.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): Money Multiplier refers to the process of creation of credit by the commercial Bank.Reason (R): Money creation by commercial bank raises the National Incomea)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.Correct answer is option 'B'. Can you explain this answer?.
Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): Money Multiplier refers to the process of creation of credit by the commercial Bank.Reason (R): Money creation by commercial bank raises the National Incomea)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.Correct answer is option 'B'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): Money Multiplier refers to the process of creation of credit by the commercial Bank.Reason (R): Money creation by commercial bank raises the National Incomea)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.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): Money Multiplier refers to the process of creation of credit by the commercial Bank.Reason (R): Money creation by commercial bank raises the National Incomea)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.Correct answer is option 'B'. Can you explain this answer?.
Solutions for Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): Money Multiplier refers to the process of creation of credit by the commercial Bank.Reason (R): Money creation by commercial bank raises the National Incomea)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.Correct answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
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Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): Money Multiplier refers to the process of creation of credit by the commercial Bank.Reason (R): Money creation by commercial bank raises the National Incomea)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.Correct answer is option 'B'. Can you explain this answer?, a detailed solution for Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): Money Multiplier refers to the process of creation of credit by the commercial Bank.Reason (R): Money creation by commercial bank raises the National Incomea)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.Correct answer is option 'B'. Can you explain this answer? has been provided alongside types of Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): Money Multiplier refers to the process of creation of credit by the commercial Bank.Reason (R): Money creation by commercial bank raises the National Incomea)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.Correct answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
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