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Read the following… (Class 12 Economics SQP 2025-26, Q9)

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EconomicsCBSE Class 12 · Sample paper, session 2025-26 · 1 mark · Assertion-reason

CBSE Class 12 Economics sample paper 2025-26: question 9

From the official CBSE sample question paper for 2025-26, section A, question 9, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q9 · 1 mark · Assertion-reasonCompetency-basedOpen Economy Macroeconomics

Read the following statements: Assertion (A) and Reason (R). Choose the correct option from those given below:
Assertion (A): External Assistance is recorded in the Current Account of the Balance of Payments of a nation.
Reason (R): External Assistance includes bilateral and multilateral loans received/extended by a nation.

  1. (A)Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
  2. (B)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
  3. (C)Assertion (A) is true, but Reason (R) is false.
  4. (D)Assertion (A) is false, but Reason (R) is true.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2025-26.

Hints

Open one hint at a time and try again before the next.

Hint 1

Does a loan change the country's assets or liabilities?

Hint 2

Check where borrowing is recorded in the BoP.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Assertion: False. External assistance (loans) creates a liability, so it is recorded in the capital account of the BoP, not the current account.

    Reason: True. External assistance covers bilateral and multilateral loans received or extended by a country.

  2. A is false and R is true. Option (D).

    1 mark

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

Where the marks are

  • Truth of A and R and the link between them (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Open Economy Macroeconomics, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2025-26: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.