Directions: In the following questions, a statement of assertion (A) ...
As an advisor, the central bank gives advice to the government regarding economic policy matters, money market, capital market, and government loans. Apart from this, the central bank formulates and implements fiscal and monetary policies to regulate the supply of money in the market and control inflation.
Directions: In the following questions, a statement of assertion (A) ...
Assertion (A): Central Bank advises the government on different economic and monetary matters.
Reason (R): Central Bank acts as an agent of the central government.
The correct answer is option A, which states that both the assertion and the reason are true, and the reason is the correct explanation of the assertion.
Explanation:
The assertion is correct. Central banks, including the central bank of a country, are responsible for advising the government on various economic and monetary matters. This is one of the key functions of a central bank.
The reason is also correct. Central banks act as agents of the central government. They are responsible for implementing and executing the monetary policy decisions made by the government. This includes managing the money supply, controlling interest rates, and regulating the financial system.
Central banks also play a crucial role in maintaining financial stability and supporting economic growth. They provide recommendations and advice to the government on matters such as fiscal policy, exchange rate management, and financial sector reforms.
The reason given in the statement is the correct explanation of the assertion because the role of a central bank as an agent of the central government enables it to provide advice and guidance on economic and monetary matters. The central bank has access to economic data, expertise, and analysis, which it uses to inform its recommendations to the government.
In conclusion, the central bank's advisory role and its position as an agent of the central government allow it to provide guidance and advice on economic and monetary matters. This is why both the assertion and the reason are true, and the reason is the correct explanation of the assertion.
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