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Overview: Money & Credit Video Lecture | Social Studies (SST) Class 10

78 videos|503 docs|131 tests

FAQs on Overview: Money & Credit Video Lecture - Social Studies (SST) Class 10

1. What is money and credit?
Ans. Money is a medium of exchange that is widely accepted in transactions for goods and services. It can be in the form of coins, banknotes, or digital currency. Credit, on the other hand, refers to the ability to borrow money or purchase goods and services with the promise of repayment in the future.
2. How does money function as a medium of exchange?
Ans. Money functions as a medium of exchange by providing a common unit of value that is universally accepted. It eliminates the need for barter system and allows individuals to trade their goods and services for money, which can later be used to purchase other goods and services.
3. What are the advantages of using credit?
Ans. Using credit provides several advantages, such as the ability to make large purchases without having to pay the full amount upfront. It also allows individuals to build a credit history, which can be helpful for future borrowing. Additionally, credit cards often offer rewards and cashback programs, providing additional benefits to users.
4. What are the risks associated with credit?
Ans. The risks associated with credit include the possibility of accumulating debt that becomes difficult to repay, leading to financial strain and potential bankruptcy. High interest rates and fees can also make credit expensive if not managed properly. Moreover, late or missed payments can negatively impact an individual's credit score, making it harder to obtain credit in the future.
5. How does the central bank control money supply in an economy?
Ans. The central bank controls the money supply in an economy through various tools, such as open market operations, reserve requirements, and setting interest rates. By buying or selling government securities, the central bank can influence the amount of money in circulation. Adjusting reserve requirements and interest rates also impact the lending capacity of commercial banks, thereby affecting the overall money supply.
78 videos|503 docs|131 tests

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