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Test: Money & Credit - 2 - UPSC


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

Test: Money & Credit - 2 for UPSC 2023 is part of Indian Economy for UPSC CSE preparation. The Test: Money & Credit - 2 questions and answers have been prepared according to the UPSC exam syllabus.The Test: Money & Credit - 2 MCQs are made for UPSC 2023 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Money & Credit - 2 below.
Solutions of Test: Money & Credit - 2 questions in English are available as part of our Indian Economy for UPSC CSE for UPSC & Test: Money & Credit - 2 solutions in Hindi for Indian Economy for UPSC CSE course. Download more important topics, notes, lectures and mock test series for UPSC Exam by signing up for free. Attempt Test: Money & Credit - 2 | 20 questions in 20 minutes | Mock test for UPSC preparation | Free important questions MCQ to study Indian Economy for UPSC CSE for UPSC Exam | Download free PDF with solutions
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Test: Money & Credit - 2 - Question 1
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Assertion : SHG is a formal source of credit.
Reason : It helps the borrower to overcome the problem of lack of collateral.

Detailed Solution for Test: Money & Credit - 2 - Question 1

Correct answer is D. A is wrong but R is correct
Explanation: 
Self-Help Groups (SHGs) are informal associations of people who choose to come together to find ways to improve their living conditions. It can be defined as self governed , peer controlled information group of people with similar socio-economic background and having a desire to collectively perform common purpose.
Self-Help Groups are emerging as an important source of credit because:
1. They charge less interest on the loans than what the moneylenders charge. The members can take loans from the groups to meet their daily needs
2. All decisions regarding savings and loans are taken by the members of the group.
3. If the group is regular in its savings they can also take loan from the bank. Loan is sanctioned in the name of the group.
4. They help borrowers to overcome the problem of collateral and have freed them from the clutches of the moneylenders.

Test: Money & Credit - 2 - Question 2
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Organised credit is also called

Test: Money & Credit - 2 - Question 3
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In which of the following systems exchange of goods is done without use of money?

Test: Money & Credit - 2 - Question 4
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Which one of the following is not a modem form of money?
Test: Money & Credit - 2 - Question 5
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Assertion : The rupee is widely accepted as a medium of exchange in India.
Reason: It is authorised by the government of the country.
Test: Money & Credit - 2 - Question 6
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Bank laying down norms for bank is
Test: Money & Credit - 2 - Question 7
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Banks.provide a higher rate of interest on which of the following accounts?
Detailed Solution for Test: Money & Credit - 2 - Question 7

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.

Test: Money & Credit - 2 - Question 8
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Which institution in India issues currency notes ?
Test: Money & Credit - 2 - Question 9
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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.
Test: Money & Credit - 2 - Question 10
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In agricultural stage grains were used a
Test: Money & Credit - 2 - Question 11
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Banks use the major portion of the deposits to:
Test: Money & Credit - 2 - Question 12
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How do people hold money with banks ?
Test: Money & Credit - 2 - Question 13
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Assertion: The RBI supervises the functioning of formal sources loans in India.
Reason: RBI is authorised to issue currency notes.
Test: Money & Credit - 2 - Question 14
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An example of cooperative society can be of
Test: Money & Credit - 2 - Question 15
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How much deposits is kept as cash by the banks ?
Test: Money & Credit - 2 - Question 16
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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
Test: Money & Credit - 2 - Question 17
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Chit funds come under
Test: Money & Credit - 2 - Question 18
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 In India, .......................... issues currency notes on behalf of the Central Government
Test: Money & Credit - 2 - Question 19
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Percentage of formal sector in total credit in India in poor household is
Test: Money & Credit - 2 - Question 20
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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.
Detailed Solution for Test: Money & Credit - 2 - Question 20

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.
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