Question

14.
In the question given below, there are two statements marked as Assertion
(A) and
Reason (R) Read the statements and choose the correct option.
Assertion (A) : Development is sustained by a proper credit policy.
Reason (R) : By giving loans to industries and trade, banks provide them
with the necessary funds required for carrying on their business without
problems. This results in increased production and services, more
employment and profits.
(a) Both A and Rare true but Ris not the correct explanation of A
(b) Both A and R are true, and R is the correct explanation of A.
(c) A is wrong but Ris correct.
(d) A is correct but Ris wrong.​

Answer 1

Answer:

B) Both A and R are true, and R is the correct explanation of A.

Answer 2

Answer:

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

Explanation:

• It is indeed true that Credit plays an important role to enhance development.
• Had there been no proper credit policy, the farmers, the businessmen, the traders, the  industrialists, would not have been able to expand their production, their business over the past several years.
• This would have ultimately led to decreased development of the economy and increased poverty.
• The results would have been severe with dwindling living standards.
• Moreover, an increase in credit from the formal sector rather than the informal sector which have very high interest rates, would drop down the exploitation of the borrowers. This would consequently contribute to national development.

Hope you got the answer and the reason for why the answer is (b).

Thank you.