Q.1. Explain the values which a borrower should observe for the proper use of loan taken. [CBSE 2018]
Q.2. How is money transferred from one bank to another bank account?
Describe how cheque payments are made and realised. [CBSE 2016]
Q.3. What is the basic feature of double coincidence of wants? In which system is it practised? [CBSE 2015]
Ans. Basic feature is that both parties agree to sell and buy each other’s commodities. What a person desires to sell is exactly what the other wishes to buy. It is practised in Barter system.
Q.4. What is meaning of Barter system? Why is double coincidence of wants an essential feature of a Barter system? [CBSE 2015]
Ans. (a) A system in which goods are directly exchanged without the use of money is called barter system.
(b) Double coincidence of wants means when both the parties - seller and purchaser - agree to sell and buy each other’s commodities. It implies that what a person desires to sell is exactly what the other wishes to buy. No money is used in such an arrangement. Therefore, it is an essential feature of barter system.
Q.1. Why is it necessary that banks and cooperatives increase their lending in rural areas? Explain. [CBSE 2018]
Q.2. Describe the pattern of formal and informal sources of credit in urban areas. Why do we need to expand formal sources of credit?
The credit activities of informal sector should be discouraged. Support the statement. [CBSE 2018]
Ans: (a) The graph given below shows the pattern of formal and informal sources of credit in urban areas:
(b) The informal lenders carry a very high-interest rate and do little to increase the income of the borrowers. So we need to expand formal sources of credit. At the same time, it is necessary that everyone receives these loans.
(c) It reduces the possibility of people getting into debt trap.
Q.3. Deposits in the banks are beneficial to the depositors as well as to nation. [CBSE 2016]
(a) To Depositors
(b) To the Nation
Q.4. Describe two different credit situations where credit plays a positive role and a negative role.
Explain an example of good credit, as mentioned in the book. [CBSE 2016]
(a) Positive Role
(b) Negative Role
Q.5. Explain three terms of credit. How these differ in different cases? [CBSE 2016]
(a) The terms of credit are as mentioned below:
(i) Interest rate.
(ii) Collateral and documentation requirement.
(iii) Mode of repayment.
(b) The terms of credit vary substantially from one credit arrangement to another.
(c) Interest rate in the formal sector, i.e., banks and cooperative is about 9-10 per cent, but in the informal sector, the moneylender and grain merchants etc. charge much higher interest.
(d) Moneylenders charge higher rate of interest and exploit the borrowers by taking control of the collateral, i.e., land.
(e) Banks insist on documentation requirement and collateral, and therefore it becomes difficult for time-poor to get loans from the banks.
Q.6. Why is modem currency accepted as a medium of exchange without any use of its own? Find out the reason. [CBSE 2015]
Ans: Modem currency is accepted as a medium of exchange without any use of its own due to reasons as mentioned below: