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MCQ Questions for Class 10 Economics Chapter 3 Money and Credit with Answers

Students can practice the NCERT MCQ Questions for Class 10 Economics Chapter 3 Money and Credit with Answers Pdf free download is available here. Revise all the concepts easily by taking help from the MCQ Questions for Class 10 Economics with Answers are prepared based on the latest exam pattern. Students can refer to these Money and Credit Class 10 MCQs Questions with Answers and assess their preparation level.

Money and Credit Class 10 MCQs Questions with Answers

Question 1.
In a SHG, most of the decisions regarding savings and loan activities are taken by:
(a) Bank
(b) Members
(c) Non-government organisation
(d) None of the above

Answer

Answer: (b) Members


Question 2.
Formal sources of credit do not include :
(a) Banks
(b) Cooperatives
(c) Employers
(d) None of the above

Answer

Answer: (c) Employers


Question 3.
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

Answer: (d) To pay the depositors who might come to withdraw money


Question 4.
Which one of the following is a modern form of currency ?
(a) Gold
(b) Silver
(c) Copper
(d) Paper notes

Answer

Answer: (d) Paper notes


Question 5.
The Informal source of credit does not include which one of the following ?
(a) Traders
(b) Friends
(c) Cooperative Societies
(d) Money-lenders

Answer

Answer: (c) Cooperative Societies


Question 6.
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

Answer: (d) It promotes trade


Question 7.
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

Answer: (c) Fixed deposits for long period


Question 8.
Which one of the following is the main source of credit for rich urban households in India ?
(a) Formal sector
(b) Informal sector
(c) Moneylenders
(d) Traders

Answer

Answer: (a) Formal sector


Question 9.
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

Answer: (c) It requires double coincidence of wants


Question 10.
Which one of the following is the new way of providing loans to the rural poors ?
(a) Co-operative societies
(b) Traders
(c) Relatives and friends
(d) SHGs

Answer

Answer: (d) SHGs


Question 11.
Which of the following is the main informal source of credit for rural house¬holds in India ?
(a) Friends
(b) Relatives
(c) Landlords
(d) Moneylenders

Answer

Answer: (d) Moneylenders


Question 12.
Which one of the following is the main source of credit for rich urban house¬holds ?
(a) Money-lenders
(b) Businessman
(c) Banks
(d) Self-Help Groups

Answer

Answer: (c) Banks


Question 13.
Why money is called a medium of exchange ?

Answer

Answer: Because it acts as an intermediate in the exchange process.


Question 14.
What is barter system ?

Answer

Answer: The system of exchanging goods is known as the barter system.


Question 15.
Mention any two products which were used as medium of exchange before the invent of money.

Answer

Answer:
(i) Gold
(ii) Copper.


Question 16.
What is a bank ?

Answer

Answer: A bank is an institution that accepts the surplus deposits and grants loan to the people or businessmen.


Question 17.
Mention the most essential feature of barter system.

Answer

Answer: Double coincidence of wants.


Question 18.
What is included in the modern form of money ?

Answer

Answer:
(i) Currency
(ii) Demand Deposits.


Question 19.
Mention any two functions of banks.

Answer

Answer:
(i) They accept deposits.
(ii) They advance loans.


Question 20.
Mention any two items which can be used as collateral.

Answer

Answer: Land and buildings.


Question 21.
Mention any two main sources of credit for rural households.

Answer

Answer:
(i) Cooperative and Commercial Banks.
(ii) Professional and agriculture money-lenders.


Question 22.
‘Poor households are still dependent on informal sources of credit’. Give reason.

Answer

Answer:
(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.


Question 23.
Why people deposit money in bank ? Give two reasons.

Answer

Answer:
(i) People’s money remains safe with the banks.
(ii) They earn interest on their deposits.


Question 24.
Name the organisation which issues currency notes in India on behalf of the Central Government.

Answer

Answer: Reserve Bank of India.


Question 25.
Mention a major source of income for the banks.

Answer

Answer: The difference between what is charged from borrower and what is paid to depositors is the main source of income for the banks.


Question 26.
What are demand deposits ?

Answer

Answer: The deposits with the bank which can be withdrawn on demand are known as demand deposits.


Question 27.
Define credit.

Answer

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.


Question 28.
Why are most of the poor households deprived from the formal sector of loans ?

Answer

Answer: Due to lack of collateral.


Question 29.
How do the deposits with banks become their source of income ?

Answer

Answer: Because these deposits are used for lending and through lending banks earns interest.


Question 30.
Define informal sources of credit.

Answer

Answer: These include money lenders, traders, relatives and friends. These are not controlled by the government.


Question 31.
Name the organisation which supervises the functioning of formal sources of credit.

Answer

Answer: The Reserve Bank of India.


Question 32.
Why one cannot refuse a payment made in rupees in India ?

Answer

Answer: In India, the legalised use of rupee as a medium of payment that cannot be refused in setting transactions in India.


Question 33.

Answer

Answer: By acting as a medium of exchange.


We think the shed NCERT MCQ Questions for Class 10 Economics Chapter 3 Money and Credit with Answers Pdf free download will benefit you to the fullest. If you need any kind of assistance while practicing CBSE Class 10 Economics Money and Credit MCQs Multiple Choice Questions with Answers, do leave us your queries and we will look into it and add it accordingly.

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