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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): Commercial banks contribute to the quantum of money supply in the economy through credit creation.
Rcason(R): As they do have note-issuing authority.
- 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 'C'. Can you explain this answer?
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Directions: In the following questions, a statement of assertion (A) ...
Commercial banks contribute to quantum of money supply in the economy through credit creation.
Commercial banks do not have the note-issuing authority, but they do contribute to the money supply in the economy.
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Directions: In the following questions, a statement of assertion (A) ...
Assertion and Reasoning
Assertion (A): Commercial banks contribute to the quantum of money supply in the economy through credit creation.
Reason (R): As they do have note-issuing authority.
Explanation
Commercial banks play an essential role in the economy by creating credit. The process of credit creation by commercial banks starts with accepting deposits from individuals and businesses. Banks use these deposits to provide loans to borrowers, which increases the money supply in the economy. This credit creation process is a crucial factor that determines the level of money supply in an economy.
The given assertion is true as commercial banks contribute to the quantum of money supply in the economy through credit creation. As banks provide loans to borrowers, the money supply in the economy increases, which leads to economic growth.
However, the given reason is false as commercial banks do not have note-issuing authority. The central bank of a country has the sole authority to issue notes and coins. In India, the Reserve Bank of India (RBI) is responsible for issuing notes and coins.
Conclusion
Therefore, the correct option is C, where Assertion (A) is true, but Reasoning (R) is false. Commercial banks contribute to the quantum of money supply in the economy through credit creation, but they do not have note-issuing authority.
Assertion (A): Commercial banks contribute to the quantum of money supply in the economy through credit creation.
Reason (R): As they do have note-issuing authority.
Explanation
Commercial banks play an essential role in the economy by creating credit. The process of credit creation by commercial banks starts with accepting deposits from individuals and businesses. Banks use these deposits to provide loans to borrowers, which increases the money supply in the economy. This credit creation process is a crucial factor that determines the level of money supply in an economy.
The given assertion is true as commercial banks contribute to the quantum of money supply in the economy through credit creation. As banks provide loans to borrowers, the money supply in the economy increases, which leads to economic growth.
However, the given reason is false as commercial banks do not have note-issuing authority. The central bank of a country has the sole authority to issue notes and coins. In India, the Reserve Bank of India (RBI) is responsible for issuing notes and coins.
Conclusion
Therefore, the correct option is C, where Assertion (A) is true, but Reasoning (R) is false. Commercial banks contribute to the quantum of money supply in the economy through credit creation, but they do not have note-issuing authority.
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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): Commercial banks contribute to the quantum of money supply in the economy through credit creation.Rcason(R): As they do have note-issuing authority.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 'C'. 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): Commercial banks contribute to the quantum of money supply in the economy through credit creation.Rcason(R): As they do have note-issuing authority.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 'C'. 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): Commercial banks contribute to the quantum of money supply in the economy through credit creation.Rcason(R): As they do have note-issuing authority.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 'C'. 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): Commercial banks contribute to the quantum of money supply in the economy through credit creation.Rcason(R): As they do have note-issuing authority.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 'C'. 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): Commercial banks contribute to the quantum of money supply in the economy through credit creation.Rcason(R): As they do have note-issuing authority.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 'C'. 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): Commercial banks contribute to the quantum of money supply in the economy through credit creation.Rcason(R): As they do have note-issuing authority.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 'C'. 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): Commercial banks contribute to the quantum of money supply in the economy through credit creation.Rcason(R): As they do have note-issuing authority.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 'C'. 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): Commercial banks contribute to the quantum of money supply in the economy through credit creation.Rcason(R): As they do have note-issuing authority.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 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
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