Question

Read the following statements – Assertion (A) and Reason (R): Assertion (A) : Repo Rate is increased to control the money supply. Reason (R) : “Rationing of credit” involves specifying the amount and purpose for which credit is to be given. From the given alterantives choose the correct one : Alternatives: (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 and 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.​

Answer 1

Answer:

B

Explanation:

both tha A and R are correcnt but the R is not correct explaination of A

Answer 2

Assertion (A): Repo Rate is increased to control the money supply.

Reason (R): “Rationing of credit” involves specifying the amount and purpose for which credit is to be given.

• The assertion is true because the repo rate is used by monetary authorities to control inflation
• The reason is also true as credit rationing is not a quantitative credit control measure. The credit limit for different business activities in the economy is prescribed. Both the assertion and reasoning is correct but it doesn't relate and answer or give the reason for the assertion. Therefore the correct answer is b

(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion