CBSE 2021 Class 12 Economics Term 1 Paper

Question : 41

Total: 60

Read the following statements - Assertion (A) and Reason (R), choose the correct alternative from the alternatives given below:
Assertion (A): Notes and Coins are the only source of money supply in the economy.
Reason (R): Demand deposits with commercial bank is also a component of money supply.

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 and 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.

Solution:

(d) Assertion (A) is false but Reason (R) is true.
Explanation: Notes and coins are not the only source of money supply in the economy. There are other sources of money supply as well, such as time deposit cheques etc.

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