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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.
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