Test: Money & Credit - 2 | 20 Questions MCQ Test Indian Economy for UPSC CSE Class 10

QUESTION: 1

Assertion : SHG is a formal source of credit.
Reason : It helps the borrower to overcome the problem of lack of collateral.

A.
Both A and R are true and R is the correct explanation of A
B.
Both A and R are true and R is not the correct explanation of A
C.
A is correct but R is wrong
D.
A is wrong but R is correct

Solution:

QUESTION: 2

Organised credit is also called

A.
informal credit
B.
formal credit
C.
cooperative credit
D.
none of these

Solution:

QUESTION: 3

In which of the following systems exchange of goods is done without use of money?

A.
Credit system
B.
Barter system
C.
Banking system
D.
Collateral system

Solution:

QUESTION: 4

Which one of the following is not a modem form of money?

A.
Currency
B.
Paper notes
C.
Coins
D.
Gold

Solution:

QUESTION: 5

Assertion : The rupee is widely accepted as a medium of exchange in India.
Reason: It is authorised by the government of the country.

A.
Both A and R are true and R is the correct explanation of A
B.
Both A and R are true but R is not the correct explanation of A
C.
A is correct but R is wrong
D.
A is wrong but R is correct.

Solution:

QUESTION: 6

Bank laying down norms for bank is

A.
RBI
B.
SBI
C.
syndicate Bank
D.
all of these

Solution:

QUESTION: 7

Banks.provide a higher rate of interest on which of the following accounts?

A.
Saving account
B.
Current account
C.
Fixed deposits for long period
D.
Fixed deposits for very short period

Solution:

Fixed deposits for long period means that the bank would be able to use the money for more profit and thus would give a higher rate of interest.

QUESTION: 8

Which institution in India issues currency notes ?

A.
State Bank of India
B.
Finance ministry
C.
Reserve Bank of India
D.
President of India

Solution:

QUESTION: 9

Assertion: The credit activities of the informal sector should be discouraged.
Reason: Getting a loan from a bank is much more difficult than taking a loan from the informal resources.

A.
Both A and R are true and R is the correct explanation of A
B.
Both A and R are true but R is not the correct explanation of A
C.
A is correct but R is wrong
D.
A is wrong but R is correct

Solution:

QUESTION: 10

In agricultural stage grains were used a

A.
money
B.
commodity
C.
ingredient
D.
none of these

Solution:

QUESTION: 11

Banks use the major portion of the deposits to:

A.
Keep as reserve so that people may withdraw
B.
Meet their routine expenses
C.
Extend loans
D.
Meet renovation of bank

Solution:

QUESTION: 12

How do people hold money with banks ?

A.
As deposits
B.
As collateral
C.
As security
D.
None of the above

Solution:

QUESTION: 13

Assertion: The RBI supervises the functioning of formal sources loans in India.
Reason: RBI is authorised to issue currency notes.

A.
Both A and R are true and R is the correct explanation of A
B.
Both A and R are true but R is not the correct explanation of A
C.
A is correct but R is wrong
D.
A is wrong but R is correct

Solution:

QUESTION: 14

An example of cooperative society can be of

A.
farmers
B.
workers
C.
women
D.
all of these

Solution:

QUESTION: 15

How much deposits is kept as cash by the banks ?

A.
15 per cent
B.
20 per cent
C.
25 per cent
D.
30 per cent

Solution:

QUESTION: 16

Which of the following is True with reference to money
(i) It acts as medium of exchange.
(ii) It includes paper notes, coins and demand deposits

A.
Both (i) and (ii) are true
B.
(i) is true (ii) is false
C.
Both (i) and (ii) are false
D.
(ii) is true (i) is false

Solution:

QUESTION: 17

Chit funds come under

A.
organised credit
B.
unorganised credit
C.
discounted coupon
D.
none of these

Solution:

QUESTION: 18

In India, .......................... issues currency notes on behalf of the Central Government

A.
RBI
B.
SBI
C.
ICICI
D.
President

Solution:

QUESTION: 19

Percentage of formal sector in total credit in India in poor household is

A.
15
B.
20
C.
70
D.
80

Solution:

QUESTION: 20

Which of the following is not a feature of SHG ?
(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 (i) and (ii)
B.
Only (ii) and (iii)
C.
Only (iii) and (iv)
D.
All of the above

Solution:

Features of SHG :

(iii) After a year or two, if the group is regular in savings, it becomes eligible for availing loan from the bank.

(iv) In a SHG (Self Help Group) important decisions in regard to loan and savings are taken by group members.

Self Help Groups issue loans at reasonable rate of interest.

SHG is a mutual help group who provide support among themselves.
They come together to solve their economic issues and earn income.

Test: Money & Credit - 2

20 Questions MCQ Test Indian Economy for UPSC CSE | Test: Money & Credit - 2

Assertion : SHG is a formal source of credit.
Reason : It helps the borrower to overcome the problem of lack of collateral.

Organised credit is also called

In which of the following systems exchange of goods is done without use of money?

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