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Read the following… (Class 12 Economics 2026, Q9)

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EconomicsCBSE Class 12 · Board exam 2026, set 58/5/1 · 1 mark · Assertion-reason

CBSE Class 12 Economics 2026: question 9

Set in the CBSE Class 12 board exam of 2026, paper 58/5/1, 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) : Transfers from Abroad (remittances) are to be recorded on the credit side of capital account of Balance of Payments (BoP).
Reason (R) : All the transactions that lead to inflow of foreign currency from the rest of the world are recorded on the credit side of Balance of Payments (BoP).

  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 58/5/1.

Hints

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

Hint 1

In which account do gifts and remittances go?

Hint 2

Inflow of foreign exchange = credit entry.

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. Remittances (transfers from abroad) are unilateral transfers recorded on the credit side of the current account, not the capital account.

    Reason: True. Every transaction that brings foreign currency into the country (exports, transfers received, borrowing from abroad) is recorded on the credit side of the BoP.

  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 paper2026 board paper, set 58/5/1: 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.