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Money and Banking — Economics STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceEconomicsMoney and Banking1 Mark
Question
Assertion (A): The currency notes do not carry as much value in it, as is written, still possess general acceptance.
Reason (R): Currency notes are backed by a legal promise from the central bank.
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
✓

Answer

a) Explanation:-Yes currency notes material is not that of value equal to the value given to it as it is legally back by the legal promise the central bank. Thus it is accepted at the value given to it by the RBI.

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