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Read the following… (Class 12 Economics 2026, Q8)

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EconomicsCBSE Class 12 · Board exam 2026, set 58/1/1 · 1 mark · Assertion-reason

CBSE Class 12 Economics 2026: question 8

Set in the CBSE Class 12 board exam of 2026, paper 58/1/1, section A, question 8, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q8 · 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) : Unilateral Transfers are recorded in the Current Account of the Balance of Payments (BoP) of a nation.

Reason (R) : Capital account records transactions which cause a change in the assets or liabilities of the country.

  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 question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 58/1/1.

Hints

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

Hint 1

Do gifts and remittances create a claim to be repaid?

Hint 2

Does R talk about the same account as A?

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: True. Unilateral transfers (gifts, remittances, grants) need no repayment and are recorded in the current account of the BoP.

    Reason: True. The capital account records transactions that change a country's assets or liabilities (loans, investment).

  2. R describes the capital account, so it does not explain why transfers go into the current account. Option (B).

    1 mark

Answer: (B) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).

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 paper2026 board paper, set 58/1/1: 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.