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

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Money and Credit Class 10 MCQs Questions with Answers

Question 1.

Which of the following is not an advantage of self-help group?

(a) Grant of timely loans

(b) Reasonable interests

(c) A platform to discuss various issues

(d) Does not help women to become self-reliant.

Answer

Answer: (d) Does not help women to become self-reliant.


Question 2.

Identify the formal source of credit:

(a) Cooperative societies

(b) Moneylenders

(c) Traders

(d) Landlords

Answer

Answer: (a) Cooperative societies


Question 3.

Which of the following is not true regarding the in convenience of Barter Exchange?

(a) Lack of double coincidence of want

(b) Absence of divisibility

(c) Difficulty in storing wealth

(d) Availability of money as a medium of exchange.

Answer

Answer: (d) Availability of money as a medium of exchange.


Question 4

Which one of the following is not a modern form of money?

(a) Demand Deposits

(b) Paper currency

(c) Coins

(d) Precious metals

Answer

Answer: (d) Precious metals


Question 5.

Formal Sources of credit include:

(a) money lenders

(b) co-operatives

(c) Employers

(d) Finance companies

Answer

Answer: (b) co-operatives


Question 6.

Which one of the following is NOT an informal sector loans for poor rural household in India?

(a) Commercial Banks

(b) Moneylenders

(c) Traders

(d) Landlords

Answer

Answer: (a) Commercial Banks


Question 7.

In a SHG most of the decisions regarding loan activities are taken by

(a) Banks

(b) Member

(c) Non-government organizations

(d) Cooperatives

Answer

Answer: (b) Member


Question 8.

Formal Sources of credit include :

(a) money lenders

(b) co-operatives

(c) Employers

(d) Finance companies

Answer

Answer: (b) co-operatives


Question 9.

Banks do not give loans:

(a) to small farmers

(b) to marginal farmers

(c) to industries

(d) without proper collateral and documents

Answer

Answer: (d) without proper collateral and documents


Question 10.

Which one of the following agencies issues currency notes on behalf of the government of India?

(a) Ministry of Finance

(b) Reserve Bank of India

(c) State Bank of India

(d) World Bank

Answer

Answer: (c) State Bank of India


Question 11.

Which one of the following is a major reason that prevents the poor from getting loans from the banks?

(a) Lack of capital

(b) Not affordable due to high rate of interest

(c) Absence of collateral security

(d) Absence of mediators

Answer

Answer: (c) Absence of collateral security


Question 12.

Which one of the following is not a formal source of credit?

(a) Commercial Banks

(b) State Bank of India

(c) Employers

(d) Co-operatives

Answer

Answer: (c) Employers


Question 13.

Which one of the following is the important characteristic of modern form of currency?

(a) It is made from precious metal

(b) It is made from thing of everyday use

(c) It is authorised by the commercial banks

(d) It is authorised by the Government of the country

Answer

Answer: (d) It is authorised by the Government of the country


Question 14.

Which one of the following is the main source of credit for the rich households?

(a) Informal

(b) Formal

(c) Both formal and informal

(d) Neither Formal nor informal

Answer

Answer: (b) Formal


Question 15.

Which is not the main source of credit from the following for rural households in India?

(a) Traders

(b) Relatives and friends

(c) Commercial Banks

(d) Moneylanders

Answer

Answer: (a) Traders


Question 16.

Which among these is an essential feature of barter system?

(a) Money can easily exchange any commodity

(b) It is based on double co-incidence of wants

(c) It is generally accepted as a medium of exchange of goods with money

(d) It acts as a measure and store of value

Answer

Answer: (b) It is based on double co-incidence of wants


Question 17.

Which one of the following is not included in the terms of credit?

(a) Rate of Interest

(b) Mode of payment

(c) Rate of saving

(d) Collateral

Answer

Answer: (c) Rate of saving


Question 18.

Which households take more loans from the formal sector?

(a) Poor households and rich household.

(b) Well off households and households with few assets.

(c) Poor households and well off households

(d) Well off households and rich households.

Answer

Answer: (d) Well off households and rich households.


Question 19.

When both parties agree to sell and buy each others commodities it is known as:

(a) measure of value

(b) double coincidence of wants

(c) store of value

(d) credit

Answer

Answer: (b) double coincidence of wants


Question 20.

What portion of deposits are kept by the banks for their day to day transaction?

(a) 10%

(b) 15%

(c) 20%

(d) 25%

Answer

Answer: (b) 15%


Question 21.

Banks use the major portion of the deposit to:

(a) Keep reserve so that people may withdraw

(b) Meet their routine expenses

(c) Extend loans

(d) Meet renovation of the bank

Answer

Answer: (c) Extend loans


Question 22.

Which is not the main source of credit from the following for rural households in India?

(a) Traders

(b) Relatives and friends

(c) Commercial Banks

(d) Moneylanders

Answer

Answer: (a) Traders


Question 23.

Credit or loan refers to an agreement between:

(a) lender and borrower

(b) consumer and producer

(c) government and tax payer

(d) all the above

Answer

Answer: (a) lender and borrower


Question 24.

Money

(a) eliminates double-coincidence of wants

(b) acts as a common measure of value

(c) acts as a standard of deferred payments

(d) all the above

Answer

Answer: (d) all the above


Question 25.

Terms of credit are with respect to:

(a) interest rate

(b) collateral

(c) documentation

(d) all the above

Answer

Answer: (d) all the above


Question 26.

System of exchanging goods for goods is called:

(a) monetary system

(b) credit system

(c) barter system

(d) exchange system

Answer

Answer: (c) barter system


Question 27.

At present which form of money is increasingly used apart from paper money?

(a) Commodity money

(b) Metallic money

(c) Plastic money

(d) All the above

Answer

Answer: (c) Plastic money


Question 28.

The part of the total deposits which a bank keeps with itself in cash is

(a) zero

(b) a small proportion

(c) a big proportion

(d) 100 percent

Answer

Answer: (b) a small proportion


Question 29.

What are the modern forms of money?

(a) Currency

(b) Plastic money

(c) Demand deposits

(d) All the above

Answer

Answer: (d) All the above


Question 30

Currency is issued in India by :

(a) commercial banks

(b) regional rural banks

(c) nationalised banks

(d) Reserve Bank of India

Answer

Answer: (d) Reserve Bank of India


Question 31.

Terms of credit are with respect to :

(a) interest rate

(b) collateral

(c) documentation

(d) all the above

Answer

Answer: (d) all the above


Question 32.

At present which form of money is increasingly used apart from paper money?

(a) Commodity money

(b) Metallic money

(c) Plastic money

(d) All the above

Answer

Answer: (c) Plastic money


Question 33.

Which state accounts for maximum percentage of SHGs (self-help groups) in bank credit?

(a) Andhra Pradesh

(b) Tamil Nadu

(c) Kerala

(d) Karnataka

Answer

Answer: (a) Andhra Pradesh


Question 34.

Who supervises the credit activities of lenders in the informal sector?

(a) Central Bank of India

(b) Commercial banks

(c) Moneylenders

(d) None

Answer

Answer: (d) None


Question 35.

Which of the following is not a source of rural credit?

(a) Regional rural banks

(b) Moneylenders

(c) Traders

(d) Government

Answer

Answer: (d) Government


Question 36.

Which state accounts for maximum percentage of SHGs (self-help groups) in bank credit?

(a) Andhra Pradesh

(b) Tamil Nadu

(c) Kerala

(d) Karnataka

Answer

Answer: (a) Andhra Pradesh


Question 37.

Regional Rural Banks were set up in ________.

(a) 1969

(b) 1979

(c) 1989

(d) 1999

Answer

Answer: (a) 1969


Question 38.

Rate of interest charged by moneylenders as compared to that charged by banks is:

(a) lower

(b) same

(c) slightly higher

(d) much higher

Answer

Answer: (d) much higher


Question 39.

Who supervises the functioning of formal sources of loans?

(a) Reserve Bank of India

(b) Central government

(c) State government

(d) None

Answer

Answer: (a) Reserve Bank of India


Question 40.

Formal sources of credit include

(a) banks

(b) moneylenders

(c) employers

(d) all the above

Answer

Answer: (a) banks


Question 41.

Which of the following is a major reason which prevents the poor from getting bank loans?

(a) Absence of collateral (security)

(b) Non-repayment of loans

(c) Higher interest rates

(d) Documentation

Answer

Answer: (a) Absence of collateral (security)


Question 42.

Which of the following is not a modern form of money?

(a) Paper notes

(b) Demand deposits

(c) Silver coins

(d) None of the above

Answer

Answer: (c) Silver coins


Question 43.

Which one of the following authorises money as a medium of exchange?

(a) Reserve Bank of India

(b) Self Help Groups

(c) The Central Government

(d) The President of India.

Answer

Answer: (a) Reserve Bank of India


Question 44.

Who helps the borrowers to overcome the problem of lack of collateral?

(a) Self-help group (SHG)

(b) State government

(c) Employers

(d) Moneylenders

Answer

Answer: (a) Self-help group (SHG)


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