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Money and Credit Set-2

Test your knowledge on Money and Credit from Economics, Class 10.

The chapter "Money and Credit" is a cornerstone of the Class 10 Economics syllabus, providing students with a fundamental understanding of how modern economies function. It explores the transition from the barter system to modern forms of money, the crucial role of banking institutions, and the diverse sources of credit available in India. For the CBSE Board exams, this chapter is vital as it frequently carries high-weightage questions ranging from the functions of the Reserve Bank of India to the socio-economic impact of Self-Help Groups (SHGs) in rural development.

Understanding the distinction between formal and informal sectors of credit is essential for scoring well in both objective and subjective sections. This practice quiz is meticulously designed to align with the NCERT curriculum and the latest 2024-25 CBSE pattern. It covers conceptual definitions, analytical scenarios, and critical thinking problems to ensure students are well-prepared for competency-based questions that test the practical application of economic concepts.

30

Minutes

30

Questions

1 / -0

Marking Scheme

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Questions in this Quiz

Q1: Which of the following is a pre-requisite for the Barter System to function?

  • Use of gold coins

  • Presence of a central bank

  • Double coincidence of wants

  • High credit availability

Q2: Why is money called a 'medium of exchange'?

  • Because it is made of precious metals

  • Because it acts as an intermediate in the exchange process

  • Because it is issued by the government

  • Because it can be stored easily

Q3: Modern currency in India is authorized by which body?

  • State Bank of India

  • Ministry of Finance

  • Reserve Bank of India

  • World Bank

Q4: What are 'Demand Deposits'?

  • Deposits that can be withdrawn only after a fixed period

  • Deposits in the form of gold and silver

  • Deposits in bank accounts that can be withdrawn on demand

  • Loans taken by the public from the bank

Q5: A cheque is a paper instructing the bank to pay a specific amount from the person’s account to:

  • The Reserve Bank of India

  • The person in whose name the cheque has been issued

  • The Central Government

  • Any person who holds the cheque book

Q6: What is the main source of income for banks?

  • Fees charged for opening accounts

  • Interest earned from the Reserve Bank of India

  • The difference between the interest charged on loans and interest paid to depositors

  • Taxes collected from the public

Q7: Which of the following is NOT a 'Term of Credit'?

  • Interest rate

  • Collateral

  • Mode of repayment

  • Depositor's age

Q8: Collateral is defined as:

  • The total amount of loan

  • An asset that the borrower owns and uses as a guarantee to a lender

  • The interest paid on a loan

  • The profit made by the bank

Q9: In a situation of 'Debt-trap', the borrower is:

  • Able to pay the loan easily

  • Earning high profits from the loan

  • Pushed into a situation where recovery is very painful

  • Provided with more loans at 0%0\% interest

Q10: Which sector of credit is supervised by the Reserve Bank of India?

  • Informal Sector

  • Formal Sector

  • Both Formal and Informal

  • Neither

...and 20 more questions.

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