CBSE Class 10 Social Science Money and Credit MCQs Set 06

Practice MCQs for Class 10 Social Science Chapter 03 Money and Credit

Explore reliable objective questions for Chapter 03 Money and Credit tailored for Class 10 learners. Utilizing these Social Science multiple-choice formats ensures thorough preparation and strengthens problem-solving speed for upcoming school assessments.

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View or download the dedicated Chapter 03 Money and Credit MCQ resource below. Practicing these 50 objective questions regularly builds familiarity with standard exam patterns and helps secure higher marks in final Social Science evaluations.

Multiple Choice Questions

Question 1: Fill in the blank: The exchange of goods for goods is a process of ___.
(a) Buying goods through currency
(b) Selling goods through currency
(c) Bartering goods
(d) Making goods
Show Answer & Explanation

Answer: (c) Bartering goods

Explanation:
1. Exchanging goods directly for other goods, without using money, is called bartering.

Teacher's Note:
a) Goods-for-goods exchange without money is called bartering.
b) This predates the use of currency as a medium of exchange.

Question 2: Seema's teacher asked her a question, and she underlined her definition of the 'formal sector'. What could the teacher's question have been?
(a) Name the sector which includes banks and cooperatives
(b) Name the sector which includes moneylenders
(c) Name the sector which includes traders
(d) Name the sector which includes relatives and friends
Show Answer & Explanation

Answer: (a) Name the sector which includes banks and cooperatives

Explanation:
1. The formal sector of credit specifically comprises banks and cooperatives, regulated by the RBI.

Teacher's Note:
a) Banks and cooperatives make up the formal credit sector.
b) Moneylenders, traders and relatives/friends instead belong to the informal sector.

Question 3: Ms. 'T', an agricultural labourer, needs credit but has no collateral to offer. Which of the following would NOT be willing to offer her money in this situation?
(a) The village moneylender
(b) The bank situated in her village
(c) The landowner where she is working
(d) The cooperative in her locality
Show Answer & Explanation

Answer: (b) The bank situated in her village

Explanation:
1. Banks strictly require collateral before lending, unlike informal lenders such as moneylenders, employers or local cooperatives, who may lend without it (often at a cost).

Teacher's Note:
a) Banks strictly require collateral, unlike informal lenders.
b) Moneylenders, landowners and cooperatives may lend without formal collateral, though often on less favourable terms.

Question 4: In a Self-Help Group, decisions regarding savings and loan activities are mostly taken by which of the following?
(a) Bank
(b) Members
(c) NGOs
(d) All of these
Show Answer & Explanation

Answer: (b) Members

Explanation:
1. SHG members themselves decide on savings and lending activities within their group, promoting self-reliance.

Teacher's Note:
a) SHG members decide their own group's savings and lending activities.
b) This self-governance is central to how SHGs function.

Question 5: Choose the correct option about collateral.
(a) Collateral is what pushes the lender into a painful debt trap situation
(b) Collateral is the amount that RBI gets from other banks
(c) Collateral is an asset that the borrower owns and uses as a guarantee to a lender against the amount borrowed
(d) Collateral does not include jewellery
Show Answer & Explanation

Answer: (c) Collateral is an asset that the borrower owns and uses as a guarantee to a lender against the amount borrowed

Explanation:
1. Collateral is correctly defined as an asset the borrower owns, pledged as security against a loan.

Teacher's Note:
a) Collateral is an asset pledged by the borrower as loan security.
b) Jewellery, land and other valuables can all serve as collateral.

Question 6: Looking at images of punch-marked coins, Gupta coins, Tughlaq coins and Akbar's gold mohar, what were currencies in the era of kings made from?
(a) Gold, Silver and Copper
(b) Ivory and Bones
(c) Grains and Water
(d) Rice and Water
Show Answer & Explanation

Answer: (a) Gold, Silver and Copper

Explanation:
1. Historic Indian coinage was made from precious and semi-precious metals: gold, silver and copper.

Teacher's Note:
a) Ancient and medieval Indian coins were made of gold, silver and copper.
b) This preceded the introduction of paper currency.

Question 7: Arrange forms of currency by usage, from oldest to most recent: (I) Paper Currency, (II) Grain and cattle, (III) Coins, (IV) Net banking and digital payments.
(a) (III)-(IV)-(I)-(II)
(b) (II)-(III)-(I)-(IV)
(c) (I)-(II)-(III)-(IV)
(d) (IV)-(III)-(II)-(I)
Show Answer & Explanation

Answer: (b) (II)-(III)-(I)-(IV)

Explanation:
1. Grain and cattle were the earliest form of exchange (II), followed by metal coins (III), then paper currency (I), and most recently digital/net banking payments (IV).

Teacher's Note:
a) Correct order: grain/cattle → coins → paper currency → digital payments.
b) This traces the historical evolution of money across millennia.

Question 8: Fill in the blank: Bank deposits are also called ___.
(a) Collateral
(b) Demand deposits
(c) Cheque
(d) Currency
Show Answer & Explanation

Answer: (b) Demand deposits

Explanation:
1. Bank deposits that can be withdrawn on demand are called demand deposits.

Teacher's Note:
a) Bank account deposits are also known as demand deposits.
b) They can be withdrawn by the account holder on demand.

Question 9: Choose the correct pair.
(a) SHG – Group of Banks
(b) Banks – Informal source of credit
(c) Collateral – Bitcoin
(d) Terms of credit – Time duration
Show Answer & Explanation

Answer: (d) Terms of credit – Time duration

Explanation:
1. Terms of credit genuinely include the repayment time duration (along with interest rate and collateral), making this the correctly matched pair.

Teacher's Note:
a) Terms of credit include repayment time duration, interest rate and collateral.
b) The other pairs misstate facts about SHGs, banks and collateral.

Question 10: Why does a farmer need initial working capital in the sowing season? (I) To buy seeds to sow. (II) To buy raw materials. (III) To buy fertilisers. (IV) To build a cold storage.
(a) (III) and (IV) only
(b) (I), (II) and (III)
(c) (I), (II), (III) and (IV)
(d) (I) and (III)
Show Answer & Explanation

Answer: (b) (I), (II) and (III)

Explanation:
1. Seeds, raw materials and fertilisers (I, II, III) are all immediate sowing-season needs; building cold storage (IV) is a longer-term infrastructure investment, not a sowing-season working capital need.

Teacher's Note:
a) Seeds, raw materials and fertilisers are immediate sowing-season needs.
b) Cold storage construction is a separate, longer-term investment, not sowing-season working capital.

Question 11: Match: (A) NSSO, (B) NABARD, (C) RBI, (D) NITI Aayog with their fields of interest: (I) Data on Self-Help Groups, (II) Economic planning, (III) Formal and Informal Sector credit data and surveys, (IV) Monitors banks and credit activities.
(a) (A)-(I), (B)-(III), (C)-(IV), (D)-(II)
(b) (A)-(III), (B)-(I), (C)-(IV), (D)-(II)
(c) (A)-(II), (B)-(III), (C)-(IV), (D)-(I)
(d) (A)-(IV), (B)-(III), (C)-(II), (D)-(I)
Show Answer & Explanation

Answer: (b) (A)-(III), (B)-(I), (C)-(IV), (D)-(II)

Explanation:
1. NSSO collects formal/informal sector credit data and surveys (III); NABARD holds data on Self-Help Groups (I); RBI monitors banks and credit activities (IV); and NITI Aayog focuses on economic planning (II).

Teacher's Note:
a) NSSO = credit data/surveys; NABARD = SHG data.
b) RBI = monitors banks/credit; NITI Aayog = economic planning.

Question 12: Assertion (A): If the borrower fails to repay the loan, the lender does not have the right to sell the asset/collateral to obtain payment. Reason (R): Collateral acts like a guarantee against the borrowed money.
(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
Show Answer & Explanation

Answer: (d) (A) is wrong but (R) is correct

Explanation:
1. Assertion A is actually false, since lenders DO have the right to sell collateral if a loan isn't repaid; Reason R, that collateral acts as a guarantee, is correctly true.

Teacher's Note:
a) Lenders DO have the right to sell collateral on default, making A false.
b) R correctly describes collateral's role as a guarantee, even though it doesn't explain the (false) assertion A.

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FAQs

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