Direction: In the questions given below are two statements labelled as Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct? Assertion (A) Flexible exchange rate involves deflationary effect. Reason (R) Flexible exchange rate promotes international trade. Codes

• A.                                  Both A and R are true, and R is the correct explanation of A
• B.                     Both A and R are true, but R is not the correct explanation of A
• C.                     A is true, but R is false
• D.                     A is false, but R is true