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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): Currency held by the public is a monetary liability of the central bank.
Reason (R): The Central bank controls credit, whereas commercial banks create credit with the currency held by the public.
- 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?
Verified Answer
Directions: In the following questions, a statement of assertion (A) ...
The cash is a liability, because if the commercial bank goes back to the central bank and gives back the cash, the central bank will have to give back the loans (or government bonds). So while it's true that cash is not backed by gold, it is still backed by something.
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Most Upvoted Answer
Directions: In the following questions, a statement of assertion (A) ...
Assertion and Reasoning
Assertion (A): Currency held by the public is a monetary liability of the central bank.
Reason (R): The Central bank controls credit, whereas commercial banks create credit with the currency held by the public.
Explanation
Currency held by the public is a liability of the central bank because it is issued by the central bank and the public can exchange it for goods and services. In other words, the central bank is responsible for ensuring that the currency is widely accepted and can be used as a medium of exchange.
On the other hand, commercial banks create credit by lending out the currency held by the public. They are able to do this because they only need to keep a fraction of the deposits as reserves and can lend out the rest. This process is known as fractional reserve banking.
Therefore, both the assertion and reasoning are true. However, the reasoning is not the correct explanation of the assertion. The fact that commercial banks create credit with currency held by the public does not affect the liability of the central bank for the currency it has issued.
Conclusion
Option B is the correct answer as both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).
Assertion (A): Currency held by the public is a monetary liability of the central bank.
Reason (R): The Central bank controls credit, whereas commercial banks create credit with the currency held by the public.
Explanation
Currency held by the public is a liability of the central bank because it is issued by the central bank and the public can exchange it for goods and services. In other words, the central bank is responsible for ensuring that the currency is widely accepted and can be used as a medium of exchange.
On the other hand, commercial banks create credit by lending out the currency held by the public. They are able to do this because they only need to keep a fraction of the deposits as reserves and can lend out the rest. This process is known as fractional reserve banking.
Therefore, both the assertion and reasoning are true. However, the reasoning is not the correct explanation of the assertion. The fact that commercial banks create credit with currency held by the public does not affect the liability of the central bank for the currency it has issued.
Conclusion
Option B is the correct answer as both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).
Community Answer
Directions: In the following questions, a statement of assertion (A) ...
B
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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): Currency held by the public is a monetary liability of the central bank.Reason (R): The Central bank controls credit, whereas commercial banks create credit with the currency held by the public.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) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): Currency held by the public is a monetary liability of the central bank.Reason (R): The Central bank controls credit, whereas commercial banks create credit with the currency held by the public.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? 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): Currency held by the public is a monetary liability of the central bank.Reason (R): The Central bank controls credit, whereas commercial banks create credit with the currency held by the public.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? 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): Currency held by the public is a monetary liability of the central bank.Reason (R): The Central bank controls credit, whereas commercial banks create credit with the currency held by the public.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?.
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): Currency held by the public is a monetary liability of the central bank.Reason (R): The Central bank controls credit, whereas commercial banks create credit with the currency held by the public.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? 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): Currency held by the public is a monetary liability of the central bank.Reason (R): The Central bank controls credit, whereas commercial banks create credit with the currency held by the public.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? 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): Currency held by the public is a monetary liability of the central bank.Reason (R): The Central bank controls credit, whereas commercial banks create credit with the currency held by the public.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?.
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): Currency held by the public is a monetary liability of the central bank.Reason (R): The Central bank controls credit, whereas commercial banks create credit with the currency held by the public.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? in English & in Hindi are available as part of our courses for Commerce.
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Here you can find the meaning 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): Currency held by the public is a monetary liability of the central bank.Reason (R): The Central bank controls credit, whereas commercial banks create credit with the currency held by the public.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? defined & explained in the simplest way possible. Besides giving the explanation 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): Currency held by the public is a monetary liability of the central bank.Reason (R): The Central bank controls credit, whereas commercial banks create credit with the currency held by the public.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?, 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): Currency held by the public is a monetary liability of the central bank.Reason (R): The Central bank controls credit, whereas commercial banks create credit with the currency held by the public.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? 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): Currency held by the public is a monetary liability of the central bank.Reason (R): The Central bank controls credit, whereas commercial banks create credit with the currency held by the public.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? theory, EduRev gives you an
ample number of questions to practice 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): Currency held by the public is a monetary liability of the central bank.Reason (R): The Central bank controls credit, whereas commercial banks create credit with the currency held by the public.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? tests, examples and also practice Commerce tests.
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