59 Views

Question : Assertion (A) Central bank as a banker to the banker to the government, works as a financial adviser.

Reason (R) Government borrows internally from banks and the general public.

 

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true, but Reason (R) is false.

 

Option 4: Assertion (A) is false, but Reason (R) is true.


Team Careers360 10th Jan, 2024
Answer (1)
Team Careers360 22nd Jan, 2024

Correct Answer: Assertion (A) is true, but Reason (R) is false.

 


Solution : The correct answer is (c) Assertion (A) is true, but Reason (R) is false.

Assertion is true because the central bank acts as a banker to commercial banks and other financial institutions, which in turn interact with the government. The central bank provides various services to commercial banks, such as maintaining their accounts, providing liquidity support, and acting as a lender of last resort. However, the central bank's role as a financial adviser to the government is not directly linked to its position as a banker to the banks. The central bank advises the government on monetary policy, exchange rate management, and overall financial stability based on its expertise in these areas.

Reason is false. While it is true that the government can borrow funds from banks and the general public through the issuance of government securities, it does not necessarily borrow internally.

 

The government can also raise funds externally through international borrowing or seek financial assistance from international organizations. The assertion implies that the government's borrowing is limited to internal sources, which is not accurate.

Therefore, the correct answer is (c) Assertion (A) is true, but Reason (R) is false.

Related Questions

UEI Global, Hotel Management ...
Apply
Training & Placement Guarantee | Top Recruiters: The Oberoi, Taj, Lee Meridien, Hyatt and many more
VIT Bhopal University | M.Tec...
Apply
M.Tech admissions open @ VIT Bhopal University | Highest CTC 52 LPA | Apply now
Amity University | M.Tech Adm...
Apply
Ranked amongst top 3% universities globally (QS Rankings).
Amity University Noida MBA Ad...
Apply
Amongst top 3% universities globally (QS Rankings)
Graphic Era (Deemed to be Uni...
Apply
NAAC A+ Grade | Among top 100 universities of India (NIRF 2024) | 40 crore+ scholarships distributed
XAT- Xavier Aptitude Test 2026
Apply
75+ years of legacy | #1 Entrance Exam | Score accepted by 250+ BSchools | Apply now
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books