Money and Credit
MCQs
Class 10
1) Double coincidence of wants means ____________.
a) What a person desires to sell is exactly what the other person wishes to buy.
b) What a person desires to sell is exactly what the other person also wishes to sell.
c) What a person desires to buy is exactly what the other person also wishes to buy.
d) None of the above.
Ans: (a)
2) In a barter system where goods are directly exchanged without the use of money, double coincidence of wants is an essential feature.
a) False
b) True
Ans: (b)
3) In India, _____________ issues currency notes on behalf of the Central Government.
a) Reserve Bank of India (RBI)
b) Ministry of Finance
c) Finance Commission
d) None of the above
Ans: (a)
4) Which of the following statements is true?
a) As per Indian law, apart from RBI, no other individual or organisation is allowed to issue currency.
b) The law use of rupees as a medium of payment that cannot be refused in settling transactions in India
c) No individual in India can legally refuse a payment made in rupees.
d) All of the above.
Ans: (d)
5) Banks in India these days hold about _________ of their deposits as cash.
a) 25 per cent
b) 20 per cent
c) 15 per cent
d) 5 per cent
Ans: (c)
6) Banks use the major portion of the deposits to ______.
a) Extend loans
b) Invest in infrastructure
c) Deposit in foreign banks
d) None of the above
Ans: (a)
7) The difference between what is charged from borrowers and what is paid to depositors is the main source of banks’ income.
a) True
b) False
Ans: (a)
8) In rural areas, the main demand for credit is for ________.
a) Purchasing land
b) Purchasing a house
c) Medical expenses
d) Crop production
Ans: (d)
9) Which of the following is an example of collateral?
a) Livestock
b) Land
c) Deposits with banks
d) All of the above
Ans: (d)
10) What are the different components of the terms of credit?
a) Interest rate
b) Documentation requirements
c) Collateral
d) All of the above
Ans: (d)
11) Which of the following statements is correct?
a) Members of a cooperative pool their resources for cooperation in certain areas.
b) Besides banks, the other major source of cheap credit in rural areas is cooperative societies.
c) There are several types of cooperatives possible, such as farmers cooperatives, weavers cooperatives, and industrial workers cooperatives.
d) All of the above.
Ans: (d)
12) Which of the following are examples of informal sector loans?
a) Moneylenders
b) Traders
c) Cooperatives
d) Only (a) and (b)
Ans: (d)
13) As of 2012, the major source of credit to rural households in India was _______.
a) Moneylenders.
b) Commercial banks.
c) Cooperative societies.
d) Relatives and friends.
Ans: (a)
14) Which of the following statements is false?
a) There is no organisation which supervises the credit activities of lenders in the informal sector.
b) RBI stops the money lenders from using unfair means to get their money back.
c) Compared to the formal lenders, most of the informal lenders charge much lesser interest on loans
d) Both (b) and (c)
Ans: (d)
15) Which of the following statements is true?
a) Periodically, banks do not submit information to the RBI on how much they are lending, to whom, at what interest rate, etc.
b) The Reserve Bank of India does not supervise the functioning of formal sources of loans.
c) The RBI monitors the banks in actually maintaining cash balances.
d) None of the above.
Ans: (c)
16) ___________ of the loans taken by poor households in the urban areas are from informal sources.
a) 85 per cent
b) 70 per cent
c) 65 per cent
d) 50 per cent
Ans: (a)
17) ___________ of the loans taken by rich households in the urban areas are from formal sources.
a) 20 per cent
b) 10 per cent
c) 15 per cent
d) 90 per cent
Ans: (d)
18) ___________ of the loans taken by well-off households in the urban areas are from formal sources.
a) 54 per cent
b) 64 per cent
c) 72 per cent
d) 90 per cent
Ans: (c)
19) ___________ of the loans taken by households with few assets in the urban areas are from informal sources.
a) 72 per cent
b) 28 per cent
c) 53 per cent
d) 47 per cent
Ans: (c)
21) Modern forms of money include
(a) Dollar and Rupees
(b) Paper notes and coins
(c) Paper notes, coins and bank deposits
(d) Coins
Ans. (c)
22) In India, ....... issues currency notes on behalf of the Central Government. [CBSE March 2011, 2020 (D)]
(a) RBI
(b) SBI
(c) ICICI
(d) President
Ans. (a)
23) ............. is an asset that the borrower owns and uses this as a guarantee to the lender until the loan is repaid.
(a) Will
(b) Collateral
(c) Fixed Deposit
(d) Education
25) Which of the following is a formal source of credit?
(a) Moneylenders
(b) Relative
(c) Trader
(d) Commercial Banks
Ans. (d)
26) Which of the following is not a feature of SHG? [CBSE March 2011]
(i) They are controlled by the RBI.
(ii) The group charges no rate of interest from its members.
(iii) After a year or two, if the group is regular in savings, it becomes eligible for availing loan from the bank.
(iv) Most of the important decisions regarding the savings and loan activities are taken by the group members.
(a) Only (1) and (II)
(b) Only (ii) and (ii)
(c) Only (iii) and (iv)
(d) All of the above
Ans. (a)
27) Which one of the following is not included in the modern form of money?
(a) Paper notes
(b) Coins
(c) Cattle
(d) Demand deposits
28) Anything which is by the people in generally accepted exchange of goods and services is called: [CBSE March 2011]
(a) Money
(b) Barter
(c) Credit
(d) Loans
Ans. (a)
29) Terms of credit does not include: [CBSE March 2011,2012]
(a) Interest rate
(b) Collateral
(c) Cheque
(d) Mode of repayment
Ans.(c)
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30) Which one of the following authorises money as a medium of exchange? [CBSE March 2011]
(a) Reserve Bank of India
(b) Self Help Groups
(c) The Central Government
(d) The President of India
Ans. (a)
31) Which of the following is not true regarding the inconvenience of Barter Exchange ? [CBSE March 2011]
(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.
Ans. (d)
32) The informal sector credit includes loans from: [CBSE March 2011]
(a) Moneylender
(b) Self Help Groups
(c) Co-operative Societies
(d) Banks
Ans. (a)
33)What do you mean by collateral? [CBSE March 2011]
(a) It is the total sum of money with a person.
(b) It is the things kept in the locker.
(c) It is the guarantee given by the lender to the borrower.
(d) It is the security to a lender until the loan is repaid.
Ans. (d)
35) In a Self Help Group most of the decision regarding savings and loan activities an taken by:[CBSE March 2011]
(a) Banks
(b) Members
(c) Non Government Organizations
(d) Moneylenders (b)
Ans. (b)
36). Banks do not give loans:
(a) To small farmers
(b) To marginal farmers
(c) To industries
(d) Without proper collateral and documents
Ans. (d)
37) Which one of the following is correct about the double coincidence of wants? [CBSE March 2012)
(a) A person desires to sell what the other wishes to buy without goods.
(b) A person desires to sell double of his goods to other.
(c) Both parties agree to sell and buy each othe commodities.
(d) All of the above.
Ans. (c)
38) What percentage of the loans is taken from informal sources by the poor households in urban area? [CBSE March 2012)
(a) 90
(b) 47
(c) 72
(d) 85
Ans. (d)
39) What percent of their deposits do banks hold as cash?
(a) 50 percent
(b) 80 percent
(c) 60 percent
(d) 15 percent
Ans. (d)
40) Which one of the following institutions authorised to issue currency notes? [CBSE March 2011)
(a) Reserve Bank of India
(b) Parliament of India
(c) President of India
(d) State Bank of India
Ans. (a)
41) What is the main source of Income for banks?[CBSE March 2012)
(a) Interest on loans
(b) Interest on deposits
(c) Difference between the interest charged on borrowers and depositors
(d) None of these
Ans. (c)
42) Which one of the following terms is not included against loans?
(a) Interest rate
(b) Collateral
(c) Documentation
(d) Lender's land
Ans. (d)
43) Banks provide a higher rate of interest on which one of the following accounts?
(a) Saving Account
(b) Current Account
(c) Fixed deposits for long period
(d) Fixed deposits for very short period
Ans. (c)
44) Which one of the following options provides assured payment? [CBSE 2020]
(a) Voucher
(b) Demand Deposit (d) Collateral
(c) Cheque
Ans. (b)
45) Which of the following is an example of informal sector credit agency?
(a) Government
(b) Money lender
(c) Bank
(d) RBI
Ans. (b)
46) Which of the following organisation supervises the credit activities of the formal sector?
(a) Government
b) RBI
(c) World Bank
d) Self Help Groups
Ans. (b)
47) Which of the following is the most important source of credit for Rural India?
(a) Money lenders
(b) Relatives
(c) Banks
(d) Self Help Groups
Ans. (c)