In the question given below, there are 2 statements marked as Assertion (A) and Reason (R). Choose the correct alternative from the following options.

Assertion (A)- The barter system had many shortcomings including the store of value which was solved with the help of money.

Reason (R)- Money helps people in transferring their purchasing power from the present to the future.

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

The correct answer is Option 1: Both (A) and (R) are true and (R) is the correct explanation.

• Assertion (A) is true because the barter system had many shortcomings, including the difficulty in storing value. Since goods could perish or lose value over time, people needed a better way to store wealth. Money solved this problem by acting as a durable medium of exchange.

• Reason (R) is also true because money allows people to transfer their purchasing power from the present to the future. This means individuals can save money today and use it later without worrying about it deteriorating or becoming obsolete, unlike perishable barter goods.

• Since money's ability to store value directly addresses one of the major shortcomings of the barter system, Reason (R) correctly explains Assertion (A).