If you’re looking for a way to enhance your Class 10 Economics, then look no further than the NCERT MCQ Questions for Class 10 Economics Chapter 3 Money and Credit with Answers. MCQ Questions for Class 10 Social Science with Answers is perfect for those who are in class 10 and want to get ahead of everyone else by mastering their subject skills as soon as possible! You can practice and test your subject knowledge by solving this MCQ of Chapter 3 Economics Objective Questions.
Money and Credit Class 10 MCQs Questions with Answers
Solving Class 10 SST Economics Chapter 3 MCQ with Answers, can be of great help to students as they will be aware of all the concepts. These MCQ on Money and Credit Class 10 with Answers pave for a quick revision, thereby helping you learn more about this subject.
Question 1.
Farmers usually take crop loans at the beginning of the season and repay the loan after:
(a) Sowing
(b) Tilling
(c) Harvesting
(d) All the above
Answer
Answer: (c) Harvesting
After harvesting.
Question 2.
Credit sometimes, pushes the borrower to a situation from which recovery is:
(а) Easy
(b) Hard
(c) Very painful
(d) None of the above
Answer
Answer: (c) Very painful
To a condition which is very painful.
Question 3.
Sometimes lenders demand against loan:
(a) Payment
(b) Cheque
(c) Draft
(d) Collateral
Answer
Answer: (d) Collateral
Collateral is the security which lenders demand against loans.
Question 4.
Interest rate, security and documentation requirement, and the mode of repayment together comprise what is called the:
(a) Loan factor
(b) Credit factor
(c) Terms of loan
(d) Terms of credit
Answer
Answer: (d) Terms of credit
All are terms of credit.
Question 5.
Loans from banks and cooperatives are called:
(a) Mixed loans
(b) Term loans
(c) Formal loans
(d) Informal loan
Answer
Answer: (c) Formal loans
They are called formal loans.
Question 6.
Loans from moneylenders, traders, employers, relatives and friends are called:
(а) Mixed loans
(b) Term loans
(c) Formal loans
(d) Informal loans
Answer
Answer: (d) Informal loans
They are called informal loans.
Question 7.
The RBI monitors the banks are actually maintaining:
(а) Cash books
(b) Cash balance
(c) Cash register
(d) None of the above
Answer
Answer: (b) Cash balance
The RBI monitors the banks are actually maintaining cash balance.
Question 8.
Most of the informal lenders charge:
(a) A less interest on loans
(b) A much higher interest on loans
(c) Can be both (a) and (b)
(d) None of the above
Answer
Answer: (b) A much higher interest on loans
Most of the informal lenders charge a much higher interest on loans.
Question 9.
The rich households are availing cheap credit from formal lenders whereas the poor households:
(a) Do not get a loan
(b) Get loan at a much less interest
(c) Have to pay a heavy price for borrowing
(d) None of the above
Answer
Answer: (c) Have to pay a heavy price for borrowing
The poor households do not have papers and thus, have to pay a heavy price for borrowing.
Question 10.
Cheap and affordable credit is crucial for:
(а) The development of urban areas
(b) The development of rural areas
(c) The country’s development
(d) All the above
Answer
Answer: (c) The country’s development
For the country’s development.
Question 11.
About 85 percent of the loans taken by poor households in the urban areas are from:
(a) Formal sources
(b) Informal sources
(c) Mixed sources
(d) None of the above
Answer
Answer: (b) Informal sources
Are from informal sources, because they do not have the required documents.
Question 12.
Most loans from informal lenders carry a very high interest rate and do little to:
(a) Do anything for the poor
(b) Pay the loans
(c) Increase the income of the borrowers
(d) None of the above
Answer
Answer: (c) Increase the income of the borrowers
Loans from informal lenders do a little to increase the income of the borrowers because their rates are high.
Question 13.
It is important that the formal credit is distributed more equally so that:
(a) The rich can benefit from the cheaper loans
(b) The poor can benefit from the cheaper loans
(c) The women can benefit from the cheaper loans
(d) None of the above
Answer
Answer: (b) The poor can benefit from the cheaper loans
So that the poor people can benefit from the cheaper loans.
Question 14.
The full form of SHG is:
(а) Station House Guard
(b) State Housing Guarantee
(c) Self Happy Groups
(d) Self Help Groups
Answer
Answer: (d) Self Help Groups
It is Self Help Groups.
Question 15.
The SHGs help borrowers overcome the problem of:
(а) Lack of funds
(b) Lack of money
(c) Lack of collateral
(d) None of the above
Answer
Answer: (c) Lack of collateral
The SHGs help borrowers overcome the problem of lack of collateral.
Question 16.
Everyone prefers to receive payments in:
(a) Goods
(b) Cheque
(c) Draft
(d) Money
Answer
Answer: (d) Money
Money can buy anything and thus, everyone prefers to receive payments in money.
Question 17.
When both parties agree to sell and buy each others commodities it is known as:
(a) Single coincidence of wants
(b) Double coincidence of wants
(c) Coincidence of wants
(d) None of the above
Answer
Answer: (b) Double coincidence of wants
It is called double coincidence of wants.
Question 18.
Money is something that can act as a medium:
(a) For exchange of commodities.
(b) For exchange of goods
(c) Of exchange in transactions
(d) None of the above
Answer
Answer: (c) Of exchange in
transactions
Money acts as a medium of exchange in transactions.
Question 19.
In early ages, Indians used grains and cattle as:
(a) Money
(b) Food
(c) Public property
(d) None of the above
Answer
Answer: (a) Money
Grains and cattle were used as money.
Question 20.
Modern forms of currency includes:
(a) Grains and cattle
(b) Coins and paper notes
(c) Cheques and pass book
(d) None of the above
Answer
Answer: (b) Coins and paper notes
It includes coins and paper notes.
Question 21.
Which of the following banks issues currency notes on behalf of the Central government to:
(a) State Bank of India
(b) Commercial Bank of India
(c) Industrial Bank of India
(d) Reserve Bank of India
Answer
Answer: (d) Reserve Bank of India
The RBI issues currency.
Question 22.
No individual in India can:
(a) Legally refuse a payment made in rupees
(b) Legally refuse a payment made by cheque
(c) Legally refuse a payment made by draft
(d) All the above
Answer
Answer: (a) Legally refuse a payment made in rupees
No individual in India can legally refuse a payment made in rupees.
Question 23.
Banks accept the deposits of the customers and also:
(a) Give a gold coin in return
(b) Give a silver coin in return
(c) Give a cheque book
(d) Pay an interest rate on the deposits
Answer
Answer: (d) Pay an interest rate on
the deposits
Banks also pay an interest rate on the deposits.
Question 24.
Since the deposits in the bank accounts can be withdrawn on demand, these deposits are called:
(a) Smart deposit
(b) Quick deposits
(c) Demand deposits
(d) All the above
Answer
Answer: (c) Demand deposits
The deposits are called demand deposits.
Question 25.
A paper, instructing the bank to pay a specific amount to the person in whose name the paper has been made is called a:
(а) Cheque
(b) Draft
(c) Payment slip
(d) None of the above
Answer
Answer: (а) Cheque
It is called a cheque.
Question 26.
Banks use the major portion of the deposits:
(a) For constructing
(b) As fixed deposits
(c) To extend loans
(d) None of the above
Answer
Answer: (c) To extend loans
Banks use the major portion of the deposits to extend loans.
Question 27.
Banks mediate between those who have surplus funds and those:
(а) Who have fixed deposits
(b) Who have gold ornaments
(c) Who are in need of these fluids
(d) None of the above
Answer
Answer: (c) Who are in need of these fluids
Those who are in need of funds.
Question 28.
The difference between what is charged from borrowers and what is paid to depositors is:
(a) The rate of interest
(b) Never equal
(c) The main source of income of banks
(d) None of the above
Answer
Answer: (c) The main source of income of banks
It is the main source of income of banks.
Question 29.
An agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment is called:
(a) Loans
(b) Debt
(c) Credit
(d) All the above
Answer
Answer: (c) Credit
It is called credit.
Question 30.
In rural areas, the main demand for credit is for:
(a) House loan
(b) Education
(c) Crop production
(d) All the above
Answer
Answer: (c) Crop production
It is for crop production.
Write true (T) or false (F)
1. What a person desires to sell is exactly what the other wishes to buy.
Answer
Answer: True
2. In a barter system, goods are indirectly exchanged with the use of money
Answer
Answer: False
3. Since, money acts as an intermediate in the exchange process, it is called a medium of exchange.
Answer
Answer: True
4. Money is something that can act as a medium of exchange in transactions.
Answer
Answer: True
5. Modern form of money include cheques and drafts.
Answer
Answer: False
6. The modern currency is without any use of its own.
Answer
Answer: True
7. In India, the Reserve Bank of India issues currency notes on behalf of the state government.
Answer
Answer: False
8. No individual in India can legally refuse a payment made in rupees.
Answer
Answer: True
9. The other form in which people hold money is as grains and cattle.
Answer
Answer: False
10. Banks accept deposits and also pay an interest rate on the deposits.
Answer
Answer: True
11. People’s money is not safe with the banks.
Answer
Answer: False
12. The modem forms of money are closely linked to the working of the modern banking system.
Answer
Answer: True
13. Banks keep a large proportion of their deposits as cash for themselves.
Answer
Answer: False
14. Banks in India these days hold about 15 percent of their deposits in cash.
Answer
Answer: True
15. Banks use the major portion of the deposits to extend loans.
Answer
Answer: True
16. There is a huge demand for loans for various economic activities.
Answer
Answer: True
17. Banks mediate between those who are in need of money with those who do not want money.
Answer
Answer: False
18. The difference between what is charged from borrowers and what is paid to depositors is the main source of income of banks.
Answer
Answer: True
19. A large number of transactions m our day-to-day activities involve debt in some form or the other.
Answer
Answer: False
20. Credit plays a vital and positive role in an individual’s life.
Answer
Answer: True
21. In rural areas, the main demand for credit is for irrigation.
Answer
Answer: False
22. For a farmer, the failure of the crop makes loan repayment impossible.
Answer
Answer: True
23. Credit pushes the borrower into a situation from which recovery is very painful.
Answer
Answer: True
24. Credit never helps to increase earnings.
Answer
Answer: False
25. Sometimes, farmer’s in order to pay loan have to sell a portion of their land.
Answer
Answer: True
26. Collateral refers to security.
Answer
Answer: True
27. Land, building, vehicle, live stocks etc. are not examples of collateral.
Answer
Answer: False
28. If the borrower fails to repay the loan the lender has the right to sell the asset.
Answer
Answer: True
29. Property, deposits with banks, livestock are some examples of security used for lending.
Answer
Answer: False
30. The terms of credit vary substantially from one credit arrangement to another.
Answer
Answer: True
Match the following
1.
| Column-A | Column-B |
| 1. Formal loans refers to | (а) loans from moneylenders, relatives, etc |
| 2. Informal loans refers to | (b) increase earnings |
| 3. Collateral refer to | (c) debt traps |
| 4. Credit helps | (d) loans from Bank and Post Office |
| 5. Loans lead to | (e) security |
Answer
Answer:
| Column-A | Column-B |
| 1. Formal loans refers to | (d) loans from Bank and Post Office |
| 2. Informal loans refers to | (а) loans from moneylenders, relatives, etc |
| 3. Collateral refer to | (e) security |
| 4. Credit helps | (b) increase earnings |
| 5. Loans lead to | (c) debt traps |
2.
| Column-I | Column-II | Column-III |
| 1. Land, building, vehicle, livestock, etc. | (a) of the | (A) collateral |
| 2. Banks loans require proper | (b) financially | (B) self-reliant |
| 3. SHGs are the building blocks of organisation | (c) variety of | (C) sources |
| 4. SHGs help women to become | (d) refers to | (D) rural people |
| 5. Credit is available from a | (e) documents and | (E) collateral |
Answer
Answer:
| Column-I | Column-II | Column-III |
| 1. Land, building, vehicle, livestock, etc. | (d) refers to | (A) collateral |
| 2. Banks loans require proper | (e) documents and | (E) collateral |
| 3. SHGs are the building blocks of organisation | (a) of the | (D) rural people |
| 4. SHGs help women to become | (b) financially | (B) self-reliant |
| 5. Credit is available from a | (c) variety of | (C) sources |
Fill in the blanks
1. The use of ……………………… spans a very large part of our everyday life.
Answer
Answer: money
2. Modem form of money includes paper notes and ……………………… .
Answer
Answer: coins
3. The ……………………… currency is without any use of its own
Answer
Answer: modern
4. No individual or organisation is allowed to issue ……………………… .
Answer
Answer: currency
5. Since the deposits in the bank accounts can be withdrawn on demand, these deposits are called ……………………… deposits.
Answer
Answer: demand
6. Demand deposits share the essential features of ……………………… .
Answer
Answer: money
7. A ……………………… is a paper, instructing the bank to pay a specific amount from the person’s account to the person in whose name it has been made.
Answer
Answer: cheques
8. Banks use the major portion of the deposits to extend ……………………… .
Answer
Answer: loans
9. ……………………… refers to an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment.
Answer
Answer: credit
10. Farmers usually take crop loans at the beginning of the season and repay the loan after ……………………… .
Answer
Answer: harvest
11. Repayment of the loan is crucially dependent on the ……………………… from farming.
Answer
Answer: income
12. Credit pushes the person into a ……………………… trap.
Answer
Answer: debt
13. ……………………… may vary depending on the nature of the lender and the borrower.
Answer
Answer: collateral
14. The ……………………… lender include moneylenders, trader relatives, friends, etc.
Answer
Answer: informal
15. Cheap and affordable credit is crucial for the ……………………… development
Answer
Answer: country’s
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