Question

Assertion (A): Public debt is the total amount borrowed by the government to finance its development activities.

Reason (R): Public debt include debt securities (such as bonds and bills) loans and goverment employee pension obligations.

Options

• Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is true but Reason (R) is false.

• Assertion (A) is false but Reason (R) is true.

Answer 1

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

Explanation:

The assertion is true since public debt refers to the entire amount borrowed by the government to fund its expenditures, which include development and other public functions. The reason is also true because public debt is made up of debt securities such as government bonds and treasury bills, loans, and other government commitments, including certain pension liabilities. However, the justification only lists the components of public debt and does not explain why the government borrows or defines public debt as a means of financing development activities. As a result, the reason is not the appropriate explanation for the assertion.