CBSE Class 10 Social Science Money and Credit MCQs Set C

Question: Why is money called a ‘medium of exchange’?
a) Since money can create loan
b) Since money adds to the value of a commodity
c) Since money is portable
d) Since money acts as an intermediate in the process of exchange
Answer: d

Question: Which bank issues notes on behalf of Government?
a) SBI
b) RBI
c) ICICI
d) HDFC
Answer: b

Question: Credit from ____ pushes the borrower into a painful situation.
a) Cooperatives
b) SHG
c) Moneylenders
d) Banks
Answer: c

Question: How much percentage of a bank’s deposits does the bank hold as cash?
a) 15%
b) 20%
c) 10%
d) 12%
Answer: a

Question: Who is the Governor of Reserve Bank of India at present?
a) Raghu Ram Rajan
b) Urjit Patel
c) P. Chidambaram
d) Narayan Reddy
Answer: b

Question: What was ‘Barter System’ based on?
a) Double coincidence of wants
b) Wants of buyer
c) Wants of seller
d) Climatic conditions
Answer: a

Question: What is the function of RBI?
a) Supervises the formal sources of loan
b) Supervises the informal sources of loan
c) To issue currency notes only
d) Provides loans to poor
Answer: a

Question: SHG members usually belong to________.
a) Different states
b) Different neighbourhood
c) One neighbourhood
d) Rich family
Answer: c

Question: What are ‘demand deposits’?
a) Deposits with banks kept for at least 10 yrs
b) Deposits with bank which can be withdrawn on demand
c) Deposits in bank in form of jewellery only
d) Deposits with banks kept for at least 5 yrs
Answer: b

Question: An asset that a borrower uses as a guarantee is called
a) collateral
b) debit card
c) credit card
d) deposits
Answer: a

Question: Demonetization was announced by Prime Minister Modi on
a) 1 January 2016
b) 8 November 2016
c) 1 July 2017
d) 28 December 2016
Answer: b

Question: The benefit of depositing money in a bank is that
a) it makes easy to get loan
b) it earns interest
c) it earns status
d) it increases country’s national income
Answer: b

Question: What is the income of a bank?
a) Deposits of the depositors
b) Salary given by government to bank officials
c) Difference between what is charged from borrowers and what is paid to depositors
d) Repayment of loans
Answer: c

Question: Which is a form of Collateral?
a) Saving account
b) Debit card
c) Credit card
d) Vehicle
Answer: d

Question: Credit is generally given at a high rate of interest by
a) cooperatives
b) self help groups
c) money lenders
d) banks
Answer: c

Question: How many members are there in Krishak Cooperative?
a) 1200
b) 1500
c) 2300
d) 2700
Answer: c

Question: In India the currency note is issued by
a) Reserve Bank of India
b) State Bank of India
c) NABARD
d) Bank of India
Answer: a

Question: Why is currency accepted as a medium of exchange?
a) Currency has no weight
b) Currency is easy to carry
c) Currency is authorized by the government of the country
d) Because RBI issues it
Answer: c

Question: What do you mean by ‘credit’?
a) Agreement in which the lender lends money, goods and services in return for the promise of future payment
b) Agreement in which the lender lends money without the promise of future payment
c) Agreement in which the moneylenders lends money to poor borrowers
d) Agreement in which only relatives lend money to borrowers
Answer: a

Question: Excess supply of money will not create inflationary pressure if, in the country,
a) demand for different goods and services increase
b) productivity increases
c) rate of tax decreases
d) rate of interest decreases
Answer: a

Question: Which of the following is a source of formal sector loan?
a) Relatives
b) Banks
c) Moneylenders
d) Traders
Answer: b

Question: ……………is authorised to issue currency in India
a) Commercial Bank
b) Reserve Bank of India
c) NABARD
d) Finance Companies
Answer: b

Question: Exchange of goods with other goods is called
a) barter exchange
b) money exchange
c) commodity exchange
d) goods exchange
Answer: a

Question: What do you mean by ‘collateral’?
a) It is a liability that the borrower bears while taking loan
b) It is a document used in the process of taking credit
c) An asset that a borrower owns and the lender uses it as a guarantee until the loan is re-paid
d) It is an asset
Answer: c

Question: In which year Reserve Bank was set up?
a) 1930
b) 1935
c) 1940
d) 1945
Answer: b

Question: The modern form of currency includes
a) silver coins
b) gold coins
c) gold and paper notes
d) paper notes and coins
Answer: d

Question: The deposits sharing the essential feature of money are called
a) fixed deposits
b) demand deposits
c) saving deposits
d) regular deposits
Answer: b

Question: Paper notes and coins are accepted as a medium of exchange because they are
a) light in weight
b) easy to carry
c) authorised by the government
d) issued by the Reserve Bank of India
Answer: c

Question: What are the terms of credit comprised of?
a) Fixed deposit
b) Voter card
c) Collateral
d) Pan card
Answer: c

Question: Credit activities of the commercial banks are regulated by
a) Central government
b) State government
c) State Bank of India
d) Reserve Bank of India
Answer: d

Question: Money is accepted as a ‘medium of exchange’ because
a) money can create loan
b) money adds to the value of a commodity
c) money is portable
d) money facilitates the process of exchange
Answer: d

Question: How many members are there in a SHG?
a) 10–15
b) 15–20
c) 20–25
d) 25–30
Answer: b

Question: Which organisations help rural poor borrowers overcome the problem of lack of collateral?
a) Self Help Groups
b) Service Holder Groups
c) Self Housing Groups
d) Soul Harassing Groups
Answer: a

Question: Why is it necessary that banks and cooperatives increase their lending particularly in rural areas?
a) To reduce the dependence on informal sources of credit
b) To promote informal sources of credit in urban areas
c) To provide high interest rate
d) To increase the deposits of commercial banks
Answer: a

Question: Formal sources of loans include loans from:
A) Banks
B) Money lenders
C) Co-operative societies
D) Traders
a) a and b
b) a and d
c) b and c
d) a and c
Answer: d

Question: People deposit money in the bank because
A) Get interest
B) Money remains secured
C) Money is used in country’s development
D) Value of money increases
a) A and B
b) B and C
c) A, B and C
d) A, B, C and D
Answer: a

Question: Example of barter exchange is
a) Purchasing wheat with money
b) Purchasing fruits with money
c) Purchasing milk with money
d) Purchasing sugar with wheat
Answer: d

Question: Absence of __________ is one of the major reasons which prevent the poor from getting bank loans.
a) Ration card
b) Cash money
c) Collateral
d) Account with that bank
Answer: c

Question: In a SHG (Self Help Group) important decisions in regard to loan and savings are taken by:
a) Govt. organization
b) Bank
c) Non-government organization
d) Members
Answer: d

Question: _______ credit is crucial for the development of a country.
a) Higher cost of
b) Less
c) Cheap
d) Industrial
Answer: c

Question: IMF stands for what?
a) International Military Force
b) International Monetary Fund
c) Indian Monetary Fund
d) Indian monetary force
Answer: b

Question: Bank uses the major portion of the deposits to:
a) Keep as reserve so that people may withdraw
b) Meet their routine expenses and salary of staff
c) Meet renovation and expansion of bank
d) Extend loans
Answer: d

Question: The rate at which Central Bank gives credit to commercial banks is called?
a) Bank Rate
b) Interest Rate
c) Cash Reserve Ratio
d) Statutory Liquidity Ratio
Answer: a

Question: Which of the following is an example of working capital?
a) Tools
b) Machine
c) Building
d) Raw Material
Answer: d

Question: The purpose of devaluation of Indian rupee is:
a) To reduce imports and to increase exports
b) To increase imports and to reduce exports
c) To reduce differences between value of goods and value of services imported
d) To maintain favourable balance of payments
Answer: d

Question: Which one of the following statements is incorrect regarding commercial banking?
a) It deals with money. It accepts deposits and advances loans
b) It deals with credit and has power to create credit
c) It deals with the general public
d) It is not a commercial institution whose aim is to earn profit
Answer: d

Question: Which Bank was merged with Punjab National Bank in 1993?
a) New Bank of India
b) Bank of Maharashtra
c) Kashi Nath Bank
d) Indus Bank
Answer: a

Question: Monetary measures to control inflation include:
a) Reduction in public expenditure
b) Increase in cash reserve ratio
c) Increase in taxes
d) Surplus budget
Answer: c

FILL IN THE BLANKS

Question: __________issues currency notes on behalf of the Central Government.
Answer: Reserve Bank of India

Question: __________costs of borrowing increase the debt-burden.
Answer: high

Question: Banks charge a higher interest rate on loans than what they offer on __________.
Answer: deposits

Question: __________is an asset that the borrower owns and uses as a guarantee until the loan is repaid to the lender.
Answer: Collateral

TRUE / FALSE

Question: Money is medium of Exchange.
Answer: True

Question: Bank uses major portion of the deposits to expand loan activities.
Answer: True

Question: Income of Bank is what is charged from borrower & what is paid to depositor.
Answer: True

Question: A liablity that a borrower uses as a guarantee is called collateral.
Answer: False

Match the column

Column ‘A’ Column ‘B’
(i) Formal source of credit comes from      (a) Informal source of credit
(ii) SHGs stand for                                     (b) Commercial bank
(iii) RBI                                                       (c) Exchange
(iv) Moneylenders                                      (d) Self Help Groups
(v) Money is a medium of                          (e) Central Bank of India
Answer
(A) (i)-(b), (ii)-(d), (iii)-(e), (iv)-(a), (v)-(c)
(B) (i)-(d), (ii)-(b), (iii)-(e), (iv)-(a), (v)-(c)
(C) (i)-(b), (ii)-(d), (iii)-(e), (iv)-(c), (v)-(a)
(D) (i)-(b), (ii)-(d), (iii)-(a), (iv)-(e), (v)-(c)