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
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Deposits that can be withdrawn only after a fixed period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Deposits in bank accounts that can be withdrawn on demand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 interest
Q10. Which sector of credit is supervised by the Reserve Bank of India?
Informal Sector
Formal Sector
Both Formal and Informal
Neither
Q11. Which of the following is an informal source of credit?
Cooperative Societies
Commercial Banks
Moneylenders
Regional Rural Banks
Q12. Why is the formal sector of credit relatively better than the informal sector?
It charges very high interest rates
It involves no documentation
It charges lower interest rates and follows legal rules
It uses unfair means to get the money back
Q13. Which group of people mostly depends on informal sources of credit in India?
Rich urban households
Well-off rural households
Poor households
Large-scale industrialists
Q14. What is the main objective of a Self-Help Group (SHG)?
To provide loans to large industries
To organize rural poor, particularly women, into small groups to pool savings
To collect taxes for the government
To provide free education to members
Q15. How many members does a typical SHG usually have?
More than
...and 15 more challenging questions available in the interactive simulator.