Assertion (A): Commercial Banks contribute to quantum of money supply in the economy through credit creation
Assertion (A): Commercial Banks contribute to quantum of money supply in the economy through credit creation.
Reason (R): Commercial Banks have the note issuing authority.
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
Anurag Pathak Changed status to publish January 5, 2024
Ans – (c)
Explanation:-
Assertion A is true as commercial banks contribute to quantum of money supply in the economy through credit creation.
Reason (R) is false as commercial banks does not have the note issuing authority. This is the RBI that has the currency issuing authority.
Anurag Pathak Changed status to publish January 5, 2024
