Question
Assertion (A): Real Flow is also known as Nominal Flow.
Reason (R): Real Flow involves flow of goods and services between firms and households.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason 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

d)

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Assertion (A): During periods of economic depression, economy is caught in a low level equilibrium trap as investment in the private sector tends to slide to its bottom.
Reason (R): The government can break the deadlock of low demand side factors by pumping investment into an economy and there by raising AD till such time the private investment is revived to achieve higher level of output and employment.
Alternatives:
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d) Both Assertion (A) and Reason (R) are false
Assertion (A): Currency Money is also termed as Fiat Money.
Reason (R): Under the law, the currency must be accepted for payment of all debts.
Alternatives:-
a) Both Assertions (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
Assertion (A): The value of the investment multiplier varies between one and infinity.
Reason (R): The minimum value of the investment multiplier is one when MPC equals zero and maximum value equals infinity when MPC equals.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
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d) Both Assertion (A) and Reason (R) are false
Assertion (A): The government budget is an annual estimated statement of revenue and expenditure during the coming fiscal year.
Reason (R): Through the government budget, it tries to reduce the regional variations.
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.
Assertion (A): Real flow and money flow are one or the same thing, presented in a different form.
Reason (R): In money flow, there is no involvement of goods in its physical form.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is False but Reason (R) is True
d) Both of the statements are false
Assertion (A): Repayment of borrowings is a capital expenditure.
Reason (R): Capital Expenditure reduces the liability of the government.
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
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Assertion (A): At the Break-Even point, consumption is equal to National Income.
Reason (R): APC falls continuously with an increase in income as the proportion of income spent on consumption keeps on decreasing.
Alternatives:
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c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True
Assertion (A): Operating Surplus does not arise in the general government sector.
Reason (R): General Government produces goods and services with the aim of earning profit without any intention of social welfare.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason 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
Assertion (A): Subsidy is a transfer payment.
Reason (R): Subsidy contributes to current flow of goods and services.
Alternatives:
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d) Assertion (A) is False but Reason (R) is True
Assertion (A): M1 measure of the money supply is defined as follows: M1 = CU + DD, where CU is Currency (notes) plus coins) held by the public and DD is ‘net’ demand deposits held by commercial banks. The word ‘net’ here implies that only deposits of the public held by the banks are to be included in the money supply.
Reason (R): The interbank deposits, which a commercial bank holds in other commercial banks, are not to be regarded as part of the money supply.
Alternatives:-
a) Both Assertions (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