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): Demand Deposits are not legal tenders. Reason (R): They are with the bank, so only can be used as a legal tender when cheques are issued for the transfer.

Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

Assertion (A) is true but reason (R) is false.

Assertion (A) is false but reason (R) is true.

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 with the government and banks is not included in the Money Supply. Reason (R): Currency can be legally used to make payment of debts or other obligations.

Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

Assertion (A) is true but reason (R) is false.

Assertion (A) is false but reason (R) is true.

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 Money is also termed as Fiat Money. Reason (R): Under the law, the currency must be accepted for payment of all debts.

Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

Assertion (A) is true but reason (R) is false.

Assertion (A) is false but reason (R) is true.

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): Paper Money is becoming more popular these days. Reason (R): It is generally acceptable and convenient to carry.

Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

Assertion (A) is true but reason (R) is false.

Assertion (A) is false but reason (R) is true.

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) Central bank as a banker to the government, works as a financial adviser. Reason (R) Government borrows internally from banks and the general public.

Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

Assertion (A) is true but reason (R) is false.

Assertion (A) is false but reason (R) is true.

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 Supply is considered to be a stock concept. Reason (R): Money Supply is measured at a particular point in time.

Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

Assertion (A) is true but reason (R) is false.

Assertion (A) is false but reason (R) is true.

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): Central Bank, as an adviser to the government it advises the government on all monetary and economic matters. Reason (R): Central Bank acts as an agent of the central government.

Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

Assertion (A) is true but reason (R) is false.

Assertion (A) is false but reason (R) is true.

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): Higher the value of LRR, the higher the value of total deposits that are generated in the economy. Reason (R): There exists an inverse relation between Money Multiplier and LRR.

Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

Assertion (A) is true but reason (R) is false.

Assertion (A) is false but reason (R) is true.

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): We can still encounter a barter system in the modern economic system. Reason (R): People exchange old clothes for utensils.

Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

Assertion (A) is true but reason (R) is false.

Assertion (A) is false but reason (R) is true.

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 supply is a stock concept. Reason (R): Money supply is measured over a period of time.

Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

Assertion (A) is true but reason (R) is false.

Assertion (A) is false but reason (R) is true.

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): The monetary policy is a policy formulated by the central bank. Reason (R): The policy involves measures taken to regulate the supply of money, availability, and cost of credit in the economy.

Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

Assertion (A) is true but reason (R) is false.

Assertion (A) is false but reason (R) is true.

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): Net Demand Deposits (and not Gross Demand Deposits) of Commercial Banks are included in Money Supply. Reason (R): Inter-Bank Deposits are the deposits held by banks on behalf of other banks and do not belong to the public.

Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

Assertion (A) is true but reason (R) is false.

Assertion (A) is false but reason (R) is true.

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): The currency notes do not carry as much value in it, as is written, still possess general acceptance. Reason (R): Currency notes are backed by a legal promise from the central bank.

Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

Assertion (A) is true but reason (R) is false.

Assertion (A) is false but reason (R) is true.

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.

Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

Assertion (A) is true but reason (R) is false.

Assertion (A) is false but reason (R) is true.

Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as: Assertion : Repo rate is fixed by the Reserve bank of India, while Reverse repo rate is fixed by the commercial bank themselves. Reason: Both repo rate and reverse repo rate is fixed by the Reserve bank of India ,as it is an apex bank.

Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

Assertion (A) is true but reason (R) is false.

Assertion (A) is false but reason (R) is true.

Money and Banking- Assertion and Reason Type Questions- 2 Free MCQ Practice Test with Solutions

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