Class 10th Economics Chapter – 3 Money and Credit MCQ with Answer

October 14, 2022

Class 10th Economics Chapter – 3 Money and Credit

Textbook	NCERT
Class	10^th
Subject	Social Science (Economics)
Chapter	3^rd
Chapter Name	Money and Credit
Category	Class 10th Economics
Medium	English
Source	Last Doubt

Class 10th Economics Chapter – 2 Sectors of Indian Economy MCQ With Answer Learn related to topics such as money as a medium of exchange, modern forms of money, loan activities of banks, two different credit situations, terms of credit, loans from cooperatives, formal sector credit in India, informal sector credit in India, and self-help groups for poor.

Class 10th Economics Chapter – 3 Money and Credit

Chapter – 3

Money and Credit

MCQ

(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.

Answer – (A) what a person desires to sell is exactly what the other person wishes to buy.

(2) 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

Answer – (A) Reserve Bank of India (RBI)

(3) Which of the following statements are true?

A. As per Indian law, apart from RBI, no other individual or organisation is allowed to issue currency.
B. The law legalises the use of rupee 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 are true.

Answer – (D) All of the above are true.

(4) Banks in India these days hold about ________ of their deposits as cash.

A. 25 percent
B. 20 percent
C. 15 percent
D. 5 percent

Answer – (C) 15 percent

(5) 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

Answer – (A) Extend loans

(6) In rural areas, the main demand for credit is for _______.

A. Purchasing land
B. Purchasing house
C. Medical expenses
D. Crop production

Answer – (D) Crop production

(7) Which of the following is an example of collateral?

A. Livestocks
B. Land
C. Deposits with banks
D. All of the above

Answer – (D) All of the above

(8) What are the different components of the terms of credit?

A. Interest rat
B. Documentation requirements
C. Collateral
D. All of the above

Answer – (D) All of the above

(9) Which of the following statements are 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 are the cooperative societies.
C. There are several types of cooperatives possible such as farmers cooperatives, weavers cooperatives, industrial workers cooperatives.
D. All of the above statements are true.

Answer – (D) All of the above statements are true

(10) Which of the following are examples of the informal sector loans?

A. Moneylenders
B. Traders
C. Cooperatives
D. Only A. and B.

Answer – (D) Only A. and B.

(11) As of 2012, the major source of credit to the rural households in India was _______.

A. Money lenders.
B. Commercial banks.
C. Cooperative societies.
D. Relatives and friends.

Answer – (A) Money lenders.

(12) Which of the following statements are 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 charges much lesser interest on loans
D. Only B. and C.

Answer – (D) Only B. and C.

(13) Which of the following statements are 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 balance.
D. None of the above statements are true.

Answer – (C) The RBI monitors the banks in actually maintaining cash balance.

(14) ______ of the loans taken by poor households in the urban areas are from informal sources.

A. 85 percent
B. 70 percent
C. 65 percent
D. 50 percent

Answer – (A) 85 percent

(15) ______ of the loans taken by rich households in the urban areas are from formal sources.

A. 20 percent
B. 10 percent
C. 15 percent
D. 90 percent

Answer – (D) 90 percent

(16) ______ of the loans taken by well-off households in the urban areas are from formal sources.

A. 54 percent
B. 64 percent
C. 72 percent
D. 90 percent

Answer – (C) 72 percent

(17) Which of the following could lead to a debt trap?

A. The high interest rate for borrowing can mean that the amount to be repaid is greater than the income of the borrower.
B. Higher cost of borrowing means a larger part of the earnings of the borrowers is used to repay the loan.
C. The high interest rate for borrowing can mean that the amount to be repaid is lesser than the income of the borrower.
D. Both A. and B.

Answer – (D) Both A. and D.

NCERT Solution Class 10th Economics All Chapters MCQ

Chapter – 1 Development

Chapter – 2 Sectors of Indian Economy

Chapter – 3 Money and Credit

Chapter – 4 Globalisation and the Indian Economy

Chapter – 5 Consumer Rights

NCERT Solution Class 10th Economics All Chapters Notes

Chapter – 1 Development

Chapter – 2 Sectors of Indian Economy

Chapter – 3 Money and Credit

Chapter – 4 Globalization and the Indian Economy

Chapter – 5 Consumer Rights