| Direction: In the questions given below are two statements labelled as Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct? |
| Assertion (A) Flexible exchange rate is a shock absorber. |
| Reason (R) Flexible exchange rate does not save the internal economy from the disturbing affects from abroad. |
A) Both A and R are true, and R is the correct explanation of A
B) Both A and R are true, but R is not the correct explanation of A
C) A is true, but R is false
D) A is false, but R is true
Correct Answer: C
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