The chapter “Money and Credit” is very important for Class 10 Economics because it explains how economic transactions take place in daily life and how money makes exchange easier. It also helps students understand the role of banks, credit, and different sources of loans in a developing economy like India.
For CBSE board exams, this chapter is frequently tested through concept-based MCQs, case-based questions, and application-based questions. A clear understanding of money, banking, credit, collateral, formal and informal loans, and self-help groups helps students score well and also connects economics with real-life financial decisions.
30
Minutes
30
Questions
1 / -0
Marking
Q1. What is the most important function of money in a modern economy?
To reduce production
To act as a medium of exchange
To increase population
To replace goods completely
Q2. In a barter system, exchange becomes difficult mainly because:
Money is too costly
Goods are not useful
Double coincidence of wants is required
Banks do not exist
Q3. Which of the following is an example of modern currency?
Grain
Cattle
Paper notes and coins
Salt
Q4. In India, paper currency is issued by:
State Bank of India
Reserve Bank of India
Ministry of Finance only
Local commercial banks
Q5. Which of the following is a store of value?
Money
Wheat only
Labour
Rainwater
Q6. Why is money widely accepted as a means of payment?
It is heavy
It is universally accepted
It is made of gold only
It can be eaten
Q7. Which of the following is not a form of modern money?
Currency notes
Coins
Cheques
Barter goods
Q8. What is a cheque?
A legal tender coin
A paper instructing the bank to pay a specific amount
A type of loan
A bank note printed by RBI
Q9. What is demand deposit?
Money kept in a bank account and withdrawable anytime
Money buried underground
A loan taken from a moneylender
Gold kept at home
Q10. Banks can use the money deposited by people because:
The bank becomes the owner of all deposits
Depositors never need their money
Only a small part is kept as cash reserve and the rest is lent out
The government forces all deposits to be lost
Q11. The main source of income of a bank is:
Gifts from customers
Interest on loans
Sale of goods
Tax collection
Q12. Which institution in India is the regulator of banks?
Supreme Court
Reserve Bank of India
Planning Commission
Election Commission
Q13. Credit means:
Giving money or goods now and receiving payment later
Only saving money in a bank
Printing currency notes
Exchanging one coin for another
Q14. Which of the following is a formal source of credit?
Moneylender
Friend
Commercial bank
Trader charging high interest
Q15. Which of the following is an informal source of credit?
Co-operative bank
Moneylender
Regional rural bank
Bank branch
...and 15 more challenging questions available in the interactive simulator.