Question

Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R
Assertion A: There is an inverse relationship between the demand of foreign exchange and the exchange rate.
Reason R: A higher exchange rate implies higher prices of foreign goods resulting in lower demand for foreign goods and lower demand for foreign exchange.
In the light of the above statements, choose the correct answer from the options given below

• A. Both A and R are true and R is the correct explanation of A
• B. Both A and R are true but R is NOT the correct explanation of A
• C. A is true but R is false
• D. A is false but R is true

Answer 1

Answer: (A)

Both A and R are true and R is the correct explanation of A

Answer 2

The correct option is (A): Both A and R are true and R is the correct explanation of A