Question

Assertion (A): Silver from Peru and Mexico enhanced Europe’s wealth in the sixteenth century.

Reason (R): Europe used this silver to finance its trade with Asia.

Options

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

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

• (A) is true, but (R) is false.

• (A) is false, but (R) is true.

Answer 1

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

Explanation:

During the sixteenth century, the discovery of silver mines in Peru and Mexico significantly increased Europe’s financial might, proving the assertion. This silver was critical since Asian markets, such as India and China, had a strong demand for precious metals but little interest in European products. As a result, Europe used American silver to finance and grow its highly profitable trade with Asia, proving that Reason is both true and a direct explanation for how Europe’s wealth was enhanced.