Question : Assertion (A): Money as a medium of exchange, has overcome the problem of lack of double coincidence under the C-C economy.
Reason (R): Currency has a general acceptance which makes it convenient to use and has segregated buying and selling activities.
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.
Correct Answer: Both Assertion (A) and Reason(R) are true and Reason (R) is the correct explanation of Assertion (A)
Solution : The correct answer is (a) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
Assertion is true because in a C-C economy, direct exchange of goods and services requires a double coincidence of wants, meaning both parties involved in the exchange must want what the other party has to offer. Money eliminates this problem by serving as a universally accepted medium of exchange, allowing individuals to trade goods and services for money and then use that money to acquire other goods and services without the need for a direct coincidence of wants.
Reason is also true. Currency, as a widely accepted medium of exchange, is generally recognized and used by individuals and businesses for buying and selling goods and services. The use of currency streamlines economic transactions and separates the act of buying from the act of selling, facilitating trade and making economic activities more efficient.Reason (R) provides the correct explanation for Assertion.
