AI-generated practice question — model-generated for extra practice, not a previous-year CBSE board question.
Option A: Both A and R are true, and R is the correct explanation of A.
The law legalises the rupee as a medium of payment that cannot be refused, and RBI issues currency notes on behalf of the central government — thus R directly explains A.
The passage explicitly states: "the law legalises the use of rupee as a medium of payment that cannot be refused in settling transactions in India" and "the Reserve Bank of India issues currency notes on behalf of the central government." Both statements are true, and the legal backing (R) is precisely why the rupee cannot be refused (A), making R the correct explanation of A.