MONEY AND CREDIT NCERT CBSE CLASS 10 SOCIAL SCIENCE ECONOMICS QUESTION BANK 2017-2018

1) Why are transactions made in money?

2)   What is 'double coincidence of wants'?

3)   What is a barter system?

4)   How does the use of money make it easier to exchange things?

5)   What was used as money in early ages in India?

6)   Which metals were used for making coins in India in later stages?

7)   What does modern form of money include?

8)   Does modern currency have any use of its own?

9)   Why is modem currency accepted as medium of exchange?

10)   In India who is authorised to issue notes and currency?

11)   What are 'demand deposits'?

12)   What is a 'cheque'?

13)   What do the banks do with the deposits which they accept from the public?

14)   How do banks act as a mediater?

15)   What is the main source of income of the banks, if they forward the depositor's money to the lender?

16)   What is 'credit'?

17)   What do the farmers in rural areas take loans for?

18)   What is a 'debt trap'?

19)   What is 'collateral'?

20)   What are the main 'terms of credit'?

21)   What are informal sectors of loan?

22)   What are the formal sectors of loan?

23)   What report is submitted periodically by all the banks to RBI?

24)   Why do informal sectors charge interest rate with their own risk?

25)   Why do banks and cooperatives need to lend more?

26)   Why should credit at reasonable rates be available to all?

27)   What prevents the poor from getting bank loans?

28)   What are SHGs?

29)   For what purposes do SHGs give loans to its members?

30)   Give any two advantages of SHGs. 

31) Give an example to show that double coincidence of wants is necessary in a barter system.

32)   How is modem form of currency accepted as a medium of exchange?

33)   What are 'demand deposits'?

34) How are demand deposits accepted as a means of payment?

35)   In what ways does the Reserve Bank of India supervise the functioning of banks?

36) What are the reasons why the banks might not be willing to lend to certain borrowers?

37) Analyse the role of credit for development.

38) State three disadvantages of the barter system.

39)   Why are terms of credit required for a loan or credit?

40)   Why does the formal or informal sector ask for a collateral?

41)   How are cooperatives functioning in the rural areas to solve the problem of credit?

42)   Identify transactions involving money in our day-to-day life.

43)   Why are transactions made in money?

44)   How does the use of money make it easier to exchange things?

45)   Which objects were used as money?

46)   How do farmers get into debt trap? 

47) What do the banks do with the deposits which they accept from the public?

48)   Why do we need to expand formal sources of credit in India?

49)   Why are poor households still dependent on informal sources of credit?

50)   What is the basic idea behind the SHGs for the poor? Explain in your own words.

51) What are the advantages of SHGs?

52)   What are the differences between formal and informal sources of credit?

53)   Why is currency accepted as a medium of exchange?

54)   What is a cheque? How does it replace currency?

55)   What do the banks do with the deposits which they accept from the public?

56)   What is credit? How can credit be both an asset as well as a debt trap?

57)   What are the terms of credit?

58) Why do poor farmers get into debt trap of informal sector?

59)   "The rich households are availing cheap credit from formal lenders whereas the poor households have to pay a heavy price for borrowing." Comment.

60)   Who takes the important decisions of SHGs and why? 

61) Since money acts as an intermediate in the exchange process, it is called: (a) value for money (b) exchange value (c) medium of exchange (d) none of these

62)   Modern forms of money include: (a) paper notes (b) gold coins (c) silver coins (d) copper coins

63)   Who issues currency notes on behalf of the Central government in India? (a)NABARD (b) Reserve Bank of India (RBI) (c) World Bank (d) State Bank of India (SBI)

64)   Deposits in bank accounts withdrawn on demand are called: (a) fixed deposits (b) recurring deposits (c) demand deposits (d) none of these

65)   Banks in India these days, hold about ____ per cent of their deposits as cash. (a) 50 (b) 20 (c) 15 (d) 10

66)   Major portion of the deposits is used by banks for: (a) setting up new branches (b) paying taxes (c) paying interest on loans (d) extending loans

67)   In rural areas, farmers take credit for? (a) Family (b) Health (c) Crop production (d) Education

68)   A 'debt trap' means: (a) inability to repay credit amount (b) ability to pay credit amount (c) overspending till no money is left (d) none of these

69)   Formal sources of credit do not include: (a) banks (b) cooperatives (c) employers (d) none of these

70)   Informal sector loans include: (a) NABARD (b) State Bank of India (c) moneylenders (d) both (b) and (c)

71)   Poor households in urban areas take loans from ____ sources. (a) formal (b) informal (c) both (a) and (b) (d) none of these

72)   What prevents the poor from getting bank loans? (a) Complexity of procedure (b) Absence of collateral (c) High rates of interest (d) None of these

73)   What is the name of the success story that met the credit needs of the poor, at reasonable rates, in Bangladesh? (a) Grameen Bank (b) Reserve Bank (c) Cooperative Bank (d) None of these 

74) Why money is known as a medium of exchange?

75)   Is gold seals a modern form of money or an ancient form of money?

76)   What is the main purpose for which farmers in rural areas take loan?

77)   Why do banks and cooperatives need to lend more to borrowers?

78)   Which agency was successful in meeting the credit needs of the poor at reasonable rates in Bangladesh?

79)   Which agency has the sole right to print currency notes on behalf of Government of India?

80)   Why does poor people in rural area prefer to borrow from informal sources?

81)   What are SHGs?

82)   What do you mean by Barter system?

83)   What is the relative difference between the rate of interest charged by the formal and informal sources of lending.

84)   What could be done in terms of credit availibility for India's development?

85)   What are terms of credit?

86)   Which type of households take most of their loans from the formal sector?

87)   Which source of credit advances loans to the maximum number of rural households in India?

88)   Women's self help groups discusses which social problems in their meetings?

89)   Which documents are required to be submitted to the bank for taking a house loan?

90)   Why do informal venders give loans to people not having any collateral?

91)   What is the real source of income for banks?

92)   Who supervises the credit activities of lenders in formal and informal sector?

93)   Why do banks are willing to lend to poor women when organised in SHGs even without collateral?

94)   When do we call that a borrower is in debt trap?

95)   What are included in the 'collateral ' demand that lenders make against loans? 

96)   "Money acts as an intermediate in the exchange process". Explain.

97)   In situations with high risks, credit might create further problems for the borrower. Explain.

98)   (a) Which institution supervises the functioning of formal sources of credit in India? (b) How does it supervise them? State any two points.

99)   Explain the term debt-trap. Why is it more rampant in rural areas? Give two reasons.

100)   How do banks mediate between those who have surplus money and those who need money?

101) Why is cheap and affordable credit important for the country's development? Explain three reasons.

102)   ''Whether credit would be useful or not, it depends on the situation". Give two different examples in support of this statement.

103)   (a) "Most of the poor households still depend on the informal sector for loans, both in the rural and urban areas of India". Support this statement with three examples. (b) What values have you learnt from the given statement?

104) Suppose you have won a big cash prize in a contest. If your parents ask you to deposit this sum as a fixed deposit in a bank, what values are parents having, which prompted them to give you this advice?

105)   "Loans from banks always help raise people's earning capacity". Justify this statement using suitable examples.

106)   How have the SHG's affected the economically weaker sections in rural areas? Or What is the basic idea behind the SHGs for the poor? Explain in your own words.

107)   Explain with an example, how credit plays a vital and positive role for development.

108)   How have markets been transformed in recent years? Explain with examples.

109)   What do people do with the extra cash? They deposit it with the banks by opening a bank account in their name. Banks accept the deposits and also pay an amount as interest on the deposits. In this way people's money is safe with the banks and it earns an amount as interest. People also have the provision to withdraw the money as and when they require. Since, the deposits in the bank accounts can be withdrawn on demand, these deposits are called demand deposits. Read the above passage and answer the following questions (a) What is demand deposit? (b) What are the advantages of depositing cash money in banks? (c) What values have you learnt from the passage? 

110) Compare and contrast the role of formal and informal sour up of credit

111)   What are the two main reasons for formal credit not being available to the rural poor? Why is there a need to expand rural credit? Or Why do the rural borrowers depend on the informal sector of credit? What steps can be taken to encourage them to take loans from the formal sources? Explain any two.

112)   Cheap and affordable credit is crucial for the country's development. Explain the statement with four points. Or Why should credit at reasonable rates be available to all? Describe any four reasons. Or Why do we need to expand formal sources of credit in India? Explain any four reasons.

113) How does money solve the problem of Double Coincidence of Wants? Explain with an example of your own.

114)   What are the reasons why the banks might not be willing to lend to certain borrowers?

115) In what ways does the Reserve Bank of India (RBI) supervise the functioning of banks? Why is this necessary? Or Which government body supervises the functioning of formal sources of loans in India? Explain.

116)   Analyse the role of credit for development. 

117) The following data shows the sources of credit for rural households in India in 2003

Source            Share

Moneylenders                                   30%

Cooperative societies                       27%

Commercial banks                            25%

Others (traders. Relatives, etc)        18%

On the basis of the above table, answer the following (a) What is the share of formal sector in the total credit? (b) Suggest two measures for improving the share of formal sector in total credit. (c) Why is the moneylender still the largest single source of credit?

118)   Which government body supervises the functioning of formal sources of loans in India? Explain its functioning.

119)   Look at a ? 10 note. What is written on top? Can you explain this statement?

120)   Manav needs a loan to set up a small business. On what basis will Manav decide whether to borrow from the bank or the moneylender? Discuss.

121)   In India, about 80% of fanners are small farmers, who need credit for cultivation. (a)Why might banks be unwilling to lend to small fanners? (b) What are the other sources from which the small farmers can borrow? (c) Explain with an example how the terms of credit can be unfavourable for the small farmer. (d) Suggest some ways by which small farmers can get cheap credit.

122) Fill in the Blanks. (a) Majority of the credit needs of the _____ households are met from informal sources. (b) _____ costs of borrowing increase the debt-burden. (c) _____ issues currency notes on behalf of the Central Government. (d) Banks charge a higher interest rate on loans than what they offer on _____ (e) _____ is an asset that the borrower owns and uses as a guarantee until the loan is repaid to the lender.

123)   Choose the most appropriate answer. (a) In a SHG most of the decisions regarding savings and loan activities are taken by (i) bank (ii) members (iii) non-government organisation (b) Formal sources of credit does not include (i)banks (ii) cooperatives (iii) employers

124)   How does the use of money market eastern to exchange things?

125)   Can you think of some examples of goods and services being exchanged or wages being paid through Barter system?

126) Consider the following information A shoe manufacturer, M Salim has to make a payment to the leather supplier and writes a cheque for a specific amount. This means that the shoe manufacturer instructs his bank to pay this amount to the leather supplier. The leather supplier takes this cheque and deposits it in his own account in the bank. The money is transferred from one bank account to another bank account in a couple of days. The transaction is complete without any payment of cash Now answer the following questions (a) M Salim wants to withdraw Rs. 20,000 in cash for making payments. How would he write a cheque to withdraw money? (b) Tick the correct answer. After the transaction between Salim and Prem, (i) Salmi's balance in his bank account increases, and Prem's balance increases. (ii) Salim's balance in his bank account decreases and Prem's balance increases. (iii) Salim's balance in his bank account increases and Prem's balance decreases. (c) Suppose Salim continues to get order from traders. What would be his position after six years?

127)   Why are demand deposits considered as money?

128)   A House Loan Megha has taken a loan of Rs. 5 lakh from the bank to purchase a house. The annual interest rate on the loan is 12% and the loan is to be repaid in 10 years in monthly instalments. Megha had to sumbit to the bank, documets showing her employment records and salary before the bank agreed to give her the loan. The bank retained as collateral the papers of the new house, which will be returned to Megha only when she repays the entire loan with interest. Fill the following details of Megha's housing loan.

(a) Loan amount (In Rupees) (b) Duration of loan (c) Documents required (d) Interest rate (e) Mode of repayment (f) Collateral      

129)   Why do lenders ask for collateral while lending?

130) Given that a large number of people in our country are poor, does it in any way affect their capacity to borrow?

131) Fill in the blanks choosing the correct option from the brackets. While taking a loan, borrowers look for easy terms of credit. This means ...... (low/high) interest rate, ...... (easy/tough) conditions for repayment, ............ (less/more) collateral and documentation requirements.

132)   Consider the following information Krishak Cooperative functions in a village not very far away from Sonpur. It has 2300 farmers as members. It accepts deposits from its members. With these deposits as collateral, the Cooperative has obtained a large loan from the bank. (a) List the various sources of credit in Sonpur. (b) Compare the terms of credit for the small farmer, the medium farmer and the landless agricultural worker in Sonpur. (c) Can everyone in Sonpur get credit at a cheap rate? Who are the people who can?

133)   Talk to some people to find out the credit arrangement that exists in your area. Record your conversation. Note the differences in the terms of credit across people.

134) What are the differences between formal and informal sources of credit?

135)   Why should credit at reasonable rates be available for all?

136)   Should there be a supervisor, such as the Reserve Bank of India, that looks into the loan activities of informal lenders? Why would its task be quite difficult?

137)   Why do you think that the share of formal sector credit is higher for the richer households compared to the poorer households? 

138) State any three advantages of an ATM.

Question Bank
Class X Economics
Chapter- 3. Money and Credit.

One marks questions:-
1. Which system has been replaces by money as a medium of exchange?
2. Which is the modern form of money?
3. Which is an example of plastic money?
4. Which institution of India is authorized to issue currency in India?
5. How much of Bank deposits in kept by the commercial for their day to day transactions.
6. What is the main function of Reserve Bank of India?
7. When reserve Bank of India was nationalized?
8. Who is the founder of Germeen Bank?
9. What is batter system?
10. What is the role of Reserve Bank.
11. What is the full form of ATM.
12. How much of bank deposits in kept by the commercial bank for their day to day transactions?
13. Credit creation is controlled by which institution.
14. Which is the main informed source of credit for rural households in India?
15. Write the full form of SHG?
16. What is money?
17. What is saving?
18. What do you mean by Banking?
19. What is Barter system?
20. What is cheque?
21. What is Saving?
22. What is Bank?
23. Define Reserve Bank of India?
24. What is cash reserve ration?

Three (03) Marks Questions
1. What do you mean by self-help group?
2. How does money solve the problem of double coincidence of?
3. How money has become integral part of our everyday life?
4. What is double coincidence of want in barter system?
5. What is modern form of money?
6. What do you mean by credit?
7. What are different terms of credit?
8. What are formal and informal sector credits in India?
9. Why is it easy to get loan for informal source?
10. What are benefits of SHFS?
11. What is barter system?

Five (05) Marks Question
1. How does money solve the problem of double coincidence of wanch?
2. Why do we need to expand formal sources of credit in India?
3. How does the Reserve Bank of India supervise the functioning of banks? Why is this necessary?
4. Analyse the role of credit for development.
5. How money has become integral part of our everyday life?
6. Explain demand deposits as a form of money?
7. Explain the role of cheque in demand deposit as a form of money.
8. Explain the demand for credit in rural areas.
9. How RBI manages the formal sector credit in India?
10. Explain informal sector credit in India.
11. Differentiate between formal and informal sources of credit.
12. Why is it difficult to take loan from formal source?
13. Why is it easy to get loan from informal source?
14. Why are demand deposits considered as money?

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