Read the following statements - Assertion (A) and Reason (R):
Assertion:The demand for money tells us what makes people desire a certain amount of money.
Reasoning: Since money is required to conduct transactions, the value of transactions will determine the money people will want to keep.
From the given alternatives choose the correct one:

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

The correct answer is option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

Assertion:The demand for money tells us what makes people desire a certain amount of money. This is correct. It indicates the reasons behind holding money, such as for transactions, precaution, or speculation.
Reasoning: Since money is required to conduct transactions, the value of transactions will determine the money people will want to keep. This is also correct. This is because higher transaction values necessitate holding more money to facilitate those transactions.

While the reason is true in that the demand for money is influenced by the need for transactions, it doesn’t fully explain why people desire a specific amount of money. Demand for money includes factors beyond transaction value, such as precautionary and speculative motives.