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Important Questions (1 Mark): Money & Credit - Class 10 MCQ


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20 Questions MCQ Test Social Studies (SST) Class 10 - Important Questions (1 Mark): Money & Credit

Important Questions (1 Mark): Money & Credit for Class 10 2024 is part of Social Studies (SST) Class 10 preparation. The Important Questions (1 Mark): Money & Credit questions and answers have been prepared according to the Class 10 exam syllabus.The Important Questions (1 Mark): Money & Credit MCQs are made for Class 10 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Important Questions (1 Mark): Money & Credit below.
Solutions of Important Questions (1 Mark): Money & Credit questions in English are available as part of our Social Studies (SST) Class 10 for Class 10 & Important Questions (1 Mark): Money & Credit solutions in Hindi for Social Studies (SST) Class 10 course. Download more important topics, notes, lectures and mock test series for Class 10 Exam by signing up for free. Attempt Important Questions (1 Mark): Money & Credit | 20 questions in 20 minutes | Mock test for Class 10 preparation | Free important questions MCQ to study Social Studies (SST) Class 10 for Class 10 Exam | Download free PDF with solutions
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Important Questions (1 Mark): Money & Credit - Question 1

System of exchanging goods for goods is called :

Detailed Solution for Important Questions (1 Mark): Money & Credit - Question 1

The correct answer is C as System of exchanging goods for goods is called barter system. Moreover this system prevailed in old times

Important Questions (1 Mark): Money & Credit - Question 2

Money

Important Questions (1 Mark): Money & Credit - Question 3

Banks in India these days hold about _________ of their deposits as cash.

Detailed Solution for Important Questions (1 Mark): Money & Credit - Question 3

Banks in India, like in most countries, are required to hold a portion of their deposits as cash. This is known as the Cash Reserve Ratio (CRR), which is mandated by the Reserve Bank of India (RBI) to ensure that banks have enough liquidity to meet their depositor's demands. The CRR is much lower than 25% or 20%, making options (a) and (b) incorrect. It is also significantly higher than 5%, which makes option (d) incorrect. Option (c) 15 per cent, is a representative figure, though the actual CRR can vary based on RBI's policy decisions.

Important Questions (1 Mark): Money & Credit - Question 4

Banks use the major portion of the deposits to ______.

Detailed Solution for Important Questions (1 Mark): Money & Credit - Question 4

The primary business model of banks involves accepting deposits from the public and then using a major portion of these deposits to extend loans to individuals, businesses, and other entities. This is how banks earn interest income. Options (b) and (c) may be part of a bank's activities but do not represent the major use of deposits. Therefore, option (a) is correct.

Important Questions (1 Mark): Money & Credit - Question 5

Terms of credit are with respect to :

Detailed Solution for Important Questions (1 Mark): Money & Credit - Question 5

The mode through which the borrower will repay the loan must be clearly mentioned. Interest rate, collateral and documentation requirement and the mode of repayment together comprise what is called the terms of credit.

Important Questions (1 Mark): Money & Credit - Question 6

Credit or loan refers to an agreement between :

Important Questions (1 Mark): Money & Credit - Question 7

The formal sector meets only about _____ of the credit needs of rural people :

Detailed Solution for Important Questions (1 Mark): Money & Credit - Question 7

A is the correct option.The formal sector still meets only about half(so 52%) of the total credit needs of the rural people. The remaining credit needs are met from informal sources.

Important Questions (1 Mark): Money & Credit - Question 8

In rural areas, the main demand for credit is for ________.

Detailed Solution for Important Questions (1 Mark): Money & Credit - Question 8

In rural areas, agriculture is often the main occupation. Credit is predominantly required for inputs into crop production, such as seeds, fertilizers, and irrigation facilities. While options (a), (b), and (c) are valid reasons for seeking credit, they do not represent the main demand in rural contexts, where agricultural needs predominate. Thus, option (d) is correct.

Important Questions (1 Mark): Money & Credit - Question 9

An asset that the borrower uses as a repayment guarantee to a lender is termed as a :

Important Questions (1 Mark): Money & Credit - Question 10

Currency is issued in India by :

Important Questions (1 Mark): Money & Credit - Question 11

Who supervises the credit activities of lenders in the informal sector ?

Detailed Solution for Important Questions (1 Mark): Money & Credit - Question 11

The Reserve Bank of India supervises the functioning of formal sources of loans. In contrast, there is no organization which supervises the credit activities of lenders in the informal sector. Loans taken by poor people from informal lenders sometimes, lead them to debt-trap because of high interest rate.
Hence, the correct answer is 'None'.

Important Questions (1 Mark): Money & Credit - Question 12

Rich households in urban areas avail cheap credit from

Detailed Solution for Important Questions (1 Mark): Money & Credit - Question 12
Rich households know about the formal loans. and they know that formal loans have less interest rates. so they avail the facility.
whereas the poor and the needy. do not know about the benefits of formal loans over informal ones and they are fooled by these thinkings.

The most important point is that for formal loans collateral and some guarantees have to be shown which the poor lack so they are unable to avail the formal sector of credit.
Important Questions (1 Mark): Money & Credit - Question 13

Which of the following is an example of collateral?

Detailed Solution for Important Questions (1 Mark): Money & Credit - Question 13

Collateral is an asset that a borrower offers to a lender as security for a loan. If the borrower fails to repay the loan, the lender has the right to seize the collateral. Livestock, land, and deposits with banks are all common forms of collateral, as they can be easily valued and sold by the lender if necessary. Therefore, option (d) "All of the above" is the correct answer.

Important Questions (1 Mark): Money & Credit - Question 14

Which of the following are examples of informal sector loans?

Detailed Solution for Important Questions (1 Mark): Money & Credit - Question 14

The informal sector includes those sources of credit that are not regulated by formal financial institutions and government policies. Moneylenders and traders often provide loans without formal procedures and documentation, thus falling into the category of informal sector loans. Cooperatives, however, are considered part of the formal sector because they are organized groups that operate under specific regulations. Therefore, option (d) "Only (a) and (b)" is correct.

Important Questions (1 Mark): Money & Credit - Question 15

Rate of interest charged by moneylenders as compared to that charged by banks is :

Detailed Solution for Important Questions (1 Mark): Money & Credit - Question 15

D is the correct option.A moneylender's loan will generally have a higher APR (Annual Percentage Rate) than a loan from a credit union or a bank. The APR will be at least 23% and may be much more in some cases.

Important Questions (1 Mark): Money & Credit - Question 16

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

Detailed Solution for Important Questions (1 Mark): Money & Credit - Question 16

Despite efforts to increase the reach of formal banking and financial services in rural areas, moneylenders have historically been a major source of credit for rural households in India. This is due to the ease of access, lack of formal requirements, and the traditional reliance on these sources, despite often higher interest rates. Therefore, option (a) is correct.

Important Questions (1 Mark): Money & Credit - Question 17

A Self-Help Group usually has :

Detailed Solution for Important Questions (1 Mark): Money & Credit - Question 17

A SHG (self help group) is a community based group with 10-20 members. They are usually women from similar social and economic backgrounds, all voluntarily coming together to save small sums of money, on a regular basis.

Important Questions (1 Mark): Money & Credit - Question 18

Which one of the following is a formal source of credit?

Detailed Solution for Important Questions (1 Mark): Money & Credit - Question 18

Cooperative societies are formal sources of credit because they are regulated entities that pool resources from their members to provide loans and other financial services. Unlike traders, moneylenders, and borrowing from friends and relatives, cooperatives operate under specific legal frameworks and guidelines, making them part of the formal financial system. Thus, option (b) is correct.

Important Questions (1 Mark): Money & Credit - Question 19

Which of the following is not a feature of Self Help Groups (SHGs)?

Detailed Solution for Important Questions (1 Mark): Money & Credit - Question 19

Self Help Groups (SHGs) are considered part of the formal financial sector as they are often linked with banks for the purposes of microfinance. SHGs consist of members who pool their savings and may use this collective saving as collateral. They also offer loans to members at nominal rates of interest. While they operate at the grassroots level, their connection to formal banking systems for credit linkage programs places them within the formal sector. Thus, option (d) is incorrect, making it the right answer to the question.

Important Questions (1 Mark): Money & Credit - Question 20

_________ are widely accepted as a medium of exchange.

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