(A) is true but (R) is false
(R) is true but (A) is false
(A) is true and (R) offers correct explanation to (A)
Answer is Wrong!
Answer is Right!
The correct answer is C.
Assertion (A) is true because a well-developed money market provides the central bank with a tool to influence the cost and availability of credit. The central bank can buy and sell government securities in the money market to increase or decrease the supply of money. This can affect interest rates, which in turn affect the cost of borrowing money.
Reasoning (R) is also true because a well-organized money market is essential for the central bank to
effectively implement its monetary policy. The central bank needs to be able to buy and sell government securities quickly and easily in order to influence the money supply. A well-organized money market provides the central bank with this ability.Therefore, both (A) and (R) are true and (R) offers correct explanation to (A).