Assertion: In agricultural based countries, agro products are exchanged for manufactured goods whereas industrialised nations export machinery and finished products and import food grains and other raw materials.

Reasoning: At different stages of economic development of countries, the nature of items traded undergo changes.

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

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

Assertion: In agricultural based countries, agro products are exchanged for manufactured goods whereas industrialised nations export machinery and finished products and import food grains and other raw materials. This statement is correct because agricultural countries generally export agro-based and raw products while importing manufactured goods, whereas industrialised countries export machinery and finished products and import raw materials and food grains.

Reasoning: At different stages of economic development of countries, the nature of items traded undergo changes. This statement is correct because the type of goods traded by a country changes according to its stage of economic development. Industrially developed countries mainly trade manufactured goods, while developing agricultural economies trade primary products.

The Reason correctly explains the Assertion because differences in economic development determine the nature of imports and exports of countries.

NCERT: Stage of economic development: At different stages of economic development of countries, the nature of items traded undergo changes. In agriculturally important countries, agro products are exchanged for manufactured goods whereas industrialised nations export machinery and finished products and import food grains and other raw materials.