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Money and Credit Class 10 MCQs Questions with Answers
In a SHG, most of the decisions regarding savings and loan activities are taken by:
(c) Non-government organisation
(d) None of the above
Answer: (b) Members
Formal sources of credit do not include :
(d) None of the above
Answer: (c) Employers
Why do banks keep a small proportion of the deposits as cash with themselves ?
(a) To extend loan to the poor
(b) To extand loan facility
(c) To pay salary to their staff
(d) To pay the depositors who might come to withdraw money
Answer: (d) To pay the depositors who might come to withdraw money
Which one of the following is a modern form of currency ?
(d) Paper notes
Answer: (d) Paper notes
The Informal source of credit does not include which one of the following ?
(c) Cooperative Societies
Answer: (c) Cooperative Societies
Which one of the following statements is most appropriate regarding transactions made in money ?
(a) It is the easiest way
(b) It is the safest way
(c) It is the cheapest way
(d) It promotes trade
Answer: (d) It promotes trade
Bank provide a higher rate of interest on which one of the following accounts ?
(a) Saving account
(b) Current account
(c) Fixed deposits for long period
(d) Fixed deposits for very short period
Answer: (c) Fixed deposits for long period
Which one of the following is the main source of credit for rich urban households in India ?
(a) Formal sector
(b) Informal sector
Answer: (a) Formal sector
Which one of the following is an essential feature of barter system ?
(a) It promotes local market
(b) It spreads social field of an individual
(c) It requires double coincidence of wants
(d) It is an easy way
Answer: (c) It requires double coincidence of wants
Which one of the following is the new way of providing loans to the rural poors ?
(a) Co-operative societies
(c) Relatives and friends
Answer: (d) SHGs
Which of the following is the main informal source of credit for rural house¬holds in India ?
Answer: (d) Moneylenders
Which one of the following is the main source of credit for rich urban house¬holds ?
(d) Self-Help Groups
Answer: (c) Banks
Why money is called a medium of exchange ?
Answer: Because it acts as an intermediate in the exchange process.
What is barter system ?
Answer: The system of exchanging goods is known as the barter system.
Mention any two products which were used as medium of exchange before the invent of money.
What is a bank ?
Answer: A bank is an institution that accepts the surplus deposits and grants loan to the people or businessmen.
Mention the most essential feature of barter system.
Answer: Double coincidence of wants.
What is included in the modern form of money ?
(ii) Demand Deposits.
Mention any two functions of banks.
(i) They accept deposits.
(ii) They advance loans.
Mention any two items which can be used as collateral.
Answer: Land and buildings.
Mention any two main sources of credit for rural households.
(i) Cooperative and Commercial Banks.
(ii) Professional and agriculture money-lenders.
‘Poor households are still dependent on informal sources of credit’. Give reason.
(i) Banks are not present everywhere in rural India.
(ii) Getting a loan from banks is much more difficult than taking a loan from informal sources.
Why people deposit money in bank ? Give two reasons.
(i) People’s money remains safe with the banks.
(ii) They earn interest on their deposits.
Name the organisation which issues currency notes in India on behalf of the Central Government.
Answer: Reserve Bank of India.
Mention a major source of income for the banks.
Answer: The difference between what is charged from borrower and what is paid to depositors is the main source of income for the banks.
What are demand deposits ?
Answer: The deposits with the bank which can be withdrawn on demand are known as demand deposits.
Answer: It is an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment.
Why are most of the poor households deprived from the formal sector of loans ?
Answer: Due to lack of collateral.
How do the deposits with banks become their source of income ?
Answer: Because these deposits are used for lending and through lending banks earns interest.
Define informal sources of credit.
Answer: These include money lenders, traders, relatives and friends. These are not controlled by the government.
Name the organisation which supervises the functioning of formal sources of credit.
Answer: The Reserve Bank of India.
Why one cannot refuse a payment made in rupees in India ?
Answer: In India, the legalised use of rupee as a medium of payment that cannot be refused in setting transactions in India.
Answer: By acting as a medium of exchange.
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