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Direction: Mark the Option Which Is Most Suitable:
Assertion : There was a collapse of the system of fixed exchange rates and the introduction of a system of floating exchange rates.
Reason : From the 1960s, the rising costs of its overseas involvements weakened the US’s finances and competitive strength. It could not command confidence as the world’s principal currency.
  • a)
    If both assertion and reason are true and reason is the correct explanation of assertion.
  • b)
    If both assertion and reason are true but reason is not the correct explanation of assertion.
  • c)
    If assertion is true but reason is false.
  • d)
    If both assertion and reason are false.
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
Direction: Mark the Option Which Is Most Suitable:Assertion : There w...
The reason explains why the system of fixed exchange rates collapsed, and is true.
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Direction: Mark the Option Which Is Most Suitable:Assertion : There w...
Understanding the Assertion and Reason
The assertion states that there was a collapse of the fixed exchange rate system and the introduction of floating exchange rates. This refers to a significant shift in global finance that occurred in the early 1970s, moving away from a system established by the Bretton Woods Agreement.
Key Points of the Assertion
- Collapse of Fixed Exchange Rates: The fixed exchange rate system, where currencies were pegged to the US dollar, faced instability.
- Introduction of Floating Exchange Rates: Countries moved to allow their currencies to fluctuate based on market conditions.
Explaining the Reason
The reason provided highlights that the US's financial burdens from overseas involvements (like the Vietnam War) weakened its economic standing. This decline made it difficult for the US dollar to maintain its status as the world’s principal reserve currency.
Key Points of the Reason
- Rising Costs: Increased military and foreign expenditure drained US finances.
- Loss of Confidence: The weakened economic position led to diminished global confidence in the US dollar.
Connection Between Assertion and Reason
- Correct Explanation: The reason directly explains why the fixed exchange rate system collapsed. The US could no longer uphold the dollar's fixed value due to its deteriorating financial condition.
- Impact on Global Finance: This loss of confidence in the dollar necessitated a shift to floating exchange rates, allowing currencies to reflect their true market value.
Conclusion
Thus, both the assertion and reason are true, and the reason accurately explains the assertion. Therefore, the correct answer is option 'A'.
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Direction: Mark the Option Which Is Most Suitable:Assertion : There was a collapse of the system of fixed exchange rates and the introduction of a system of floating exchange rates.Reason : From the 1960s, the rising costs of its overseas involvements weakened the US’s finances and competitive strength. It could not command confidence as the world’s principal currency.a)If both assertion and reason are true and reason is the correct explanation of assertion.b)If both assertion and reason are true but reason is not the correct explanation of assertion.c)If assertion is true but reason is false.d)If both assertion and reason are false.Correct answer is option 'A'. Can you explain this answer?
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Direction: Mark the Option Which Is Most Suitable:Assertion : There was a collapse of the system of fixed exchange rates and the introduction of a system of floating exchange rates.Reason : From the 1960s, the rising costs of its overseas involvements weakened the US’s finances and competitive strength. It could not command confidence as the world’s principal currency.a)If both assertion and reason are true and reason is the correct explanation of assertion.b)If both assertion and reason are true but reason is not the correct explanation of assertion.c)If assertion is true but reason is false.d)If both assertion and reason are false.Correct answer is option 'A'. Can you explain this answer? for Class 10 2024 is part of Class 10 preparation. The Question and answers have been prepared according to the Class 10 exam syllabus. Information about Direction: Mark the Option Which Is Most Suitable:Assertion : There was a collapse of the system of fixed exchange rates and the introduction of a system of floating exchange rates.Reason : From the 1960s, the rising costs of its overseas involvements weakened the US’s finances and competitive strength. It could not command confidence as the world’s principal currency.a)If both assertion and reason are true and reason is the correct explanation of assertion.b)If both assertion and reason are true but reason is not the correct explanation of assertion.c)If assertion is true but reason is false.d)If both assertion and reason are false.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Class 10 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: Mark the Option Which Is Most Suitable:Assertion : There was a collapse of the system of fixed exchange rates and the introduction of a system of floating exchange rates.Reason : From the 1960s, the rising costs of its overseas involvements weakened the US’s finances and competitive strength. It could not command confidence as the world’s principal currency.a)If both assertion and reason are true and reason is the correct explanation of assertion.b)If both assertion and reason are true but reason is not the correct explanation of assertion.c)If assertion is true but reason is false.d)If both assertion and reason are false.Correct answer is option 'A'. Can you explain this answer?.
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