Assertion [A] Currency held by public is a monetary liability of central bank. |
Reason [R] Central bank controls credit, whereas commercial banks create credit with the currency held by public. |
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: B
Solution :
As currency held by general public has very low intrinsic value as compared to its denominated value, it becomes the monetary liability of the issuing authorities.You need to login to perform this action.
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