RBSE Solutions Class 12 Economics Chapter 25 Cashless Transaction

Question 1. Saving of time and wealth is possible :
(a) In barter exchange system
(b) In monetary system
(c) In cash transactions
(d) In cashless transactions
Answer: (d) In cashless transactions
In simple words: Cashless transactions help us save time and also manage our money better. We don't need to carry physical cash.

🎯 Exam Tip: Understand the basic advantages of cashless transactions, such as efficiency and security, as these are common themes.

Question 2. Which of the following will be called cashless transaction?
(a) Cash payment
(b) Demand draft
(c) Debit card
(d) Both (b) and (c)
Answer: (d) Both (b) and (c)
In simple words: Payments made using a demand draft or a debit card do not involve physical cash, so they are cashless.

🎯 Exam Tip: Identify different methods of payment that do not involve physical currency. These are all forms of cashless transactions.

Question 3. Which technique is not used in online payment?
(a) NIGS
(b) NEFT
(c) RTGS
(d) IMPS
Answer: (a) NIGS
In simple words: NIGS is not a recognized method for online payments, while NEFT, RTGS, and IMPS are common banking systems for electronic transfers.

🎯 Exam Tip: Learn the full forms and basic functions of common online payment systems like NEFT, RTGS, and IMPS to distinguish them from incorrect options.

Question 4. Which of the following does not need internet facility in digital payment?
(a) Internet banking
(b) E-wallet
(c) Swipe card
(d) USSD technique
Answer: (d) USSD technique
In simple words: The USSD technique lets you make digital payments using a basic phone without needing an internet connection.

🎯 Exam Tip: Recognize payment methods that cater to users without smartphones or internet access, like USSD, which is important for financial inclusion.

Question 5. The name of digital payment app promoted by government of India is :
(a) Digital app
(b) Bharat app
(c) Bhiin app
(d) Payment app
Answer: (c) Bhiin app
In simple words: BHIM is a mobile payment app launched by the Indian government to make digital transactions easier for everyone.

🎯 Exam Tip: Be aware of key government initiatives and apps related to digital payments, as these are often tested.

Question 6. Which of the following is used traditionally for cashless payment ?
(a) E wallet
(b) Internet banking
(c) Cheque or draft
(d) Debit/credit card
Answer: (c) Cheque or draft
In simple words: Cheques and demand drafts were used for cashless payments long before e-wallets or internet banking became popular.

🎯 Exam Tip: Differentiate between older, traditional cashless payment methods and newer, technology-driven ones. "Traditionally" is the keyword here.

Question 1. Write the meaning of cashless transaction.
Answer: A cashless transaction means an economic exchange done without using physical cash. Instead, money is transferred digitally or through other non-cash methods.
In simple words: A cashless transaction is when you pay for things without using paper money or coins.

🎯 Exam Tip: Define cashless transactions clearly and concisely, focusing on the absence of physical currency exchange.

Question 2. From where can cheque books be obtained ?
Answer: Cheque books can be obtained directly from banks. Account holders can request them from their respective banks.
In simple words: You can get cheque books from your bank.

🎯 Exam Tip: Know the basic services provided by banks for managing financial transactions.

Question 3. From where can we download any type of mobile app?
Answer: On Android phones, any type of mobile app can be downloaded from the Google Playstore. For other operating systems, respective app stores are used.
In simple words: You can download mobile apps from app stores like Google Playstore on Android phones.

🎯 Exam Tip: Understand the common platforms for downloading mobile applications, especially for digital payments.

Question 4. Write down one method of making online payment through bank.
Answer: One method of making an online payment through a bank is using internet banking, for example, to pay for rail tickets or other services.
In simple words: We can pay online for things like train tickets using internet banking through our bank.

🎯 Exam Tip: Provide a specific example when asked for a method, making your answer more concrete and easier to understand.

Question 5. Write down the full form of BHIM app.
Answer: The full form of BHIM app is Bharat Interface for Money. It's an Indian mobile payment application.
In simple words: BHIM stands for Bharat Interface for Money.

🎯 Exam Tip: Memorize the full forms of important acronyms related to digital payment systems.

RBSE Class 12 Economics Chapter 25 Short Answer Type Questions

Question 1. Write down any four mediums of cashless transactions.
Answer: The four mediums of cashless transactions are:
1. Through cheque
2. Through Internet banking
3. Through Swipe machine (using debit/credit cards)
4. Through Mobile apps
In simple words: Four ways to pay without cash are by cheque, internet banking, swipe machines, and mobile apps.

🎯 Exam Tip: List a variety of cashless transaction methods, from traditional to modern, to show a comprehensive understanding.

Question 3. Define E-commerce.
Answer: E-commerce, also known as E-business, is a modern way of doing business online using the internet. It allows customers to buy goods and services from their homes and sellers to reach customers globally.
In simple words: E-commerce is buying and selling things online through the internet.

🎯 Exam Tip: Focus on the key aspect of E-commerce: business transactions conducted over the internet, connecting buyers and sellers digitally.

Question 4. What precautions should be taken while performing digital transactions ?
Answer: When performing digital transactions, the following precautions should be taken:
1. Always keep your ATM PIN code a secret.
2. Use mobile apps only after confirming they are official and trustworthy.
3. Do not lend your mobile phone to anyone else for use in transactions.
4. If you suspect any doubtful or suspicious transaction, contact your bank immediately.
In simple words: To stay safe while paying digitally, keep your PIN secret, use official apps, don't let others use your phone for payments, and tell your bank right away if you see anything strange.

🎯 Exam Tip: Emphasize security measures like keeping PINs confidential and verifying app authenticity to prevent fraud in digital transactions.

Question 5. Write any four limitations of cashless transactions.
Answer: Here are four limitations of cashless transactions:
1. Problem for illiterate people: Many people who cannot read or write find it hard to use cashless methods, which limits these benefits.
2. Lack of banking habits: In many developing countries, people are not used to banking, which makes cashless transactions difficult to adopt.
3. Fear of fraud: Some people avoid cashless transactions because they worry about online fraud, even though it's often safe if passwords are kept secret.
4. Limited expansion of banking facilities: Many villages in India do not have enough bank branches or services, which means cashless options are mostly available in cities.
In simple words: Cashless payments are hard for people who can't read, for those not used to banks, because of fraud fears, and since banking is not available everywhere.

🎯 Exam Tip: When discussing limitations, consider socio-economic factors like literacy and access to banking, as well as security concerns.

Question 1. How are digital payment methods useful in the technique of E-commerce trading?
Answer: Digital payment methods are very useful in E-commerce because they allow customers to buy and sellers to sell goods and services online from anywhere in the world. E-commerce relies on the internet for business operations, and digital payments make these transactions smooth and fast. Businesses can also get customer feedback and offer various services. Governments also support digital payments to ensure quality products and services are provided efficiently.
In simple words: Digital payments make online shopping and selling much easier and faster, helping e-commerce grow and letting people buy and sell from anywhere.

🎯 Exam Tip: Highlight how digital payments are essential for the global reach and efficiency that characterize e-commerce, benefiting both buyers and sellers.

Question 2. What is cashless transaction ? Mention its major mediums in detail.
Answer: A cashless transaction means a financial exchange that happens without using physical money. It involves transferring money directly between bank accounts, which is a key part of e-commerce. It became popular in India about a decade ago.
The major mediums of cashless transactions are:
(i) Payment through cheque or draft: This is a simple way where a buyer uses a cheque or bank draft from their bank to pay a seller. Drafts are often used for larger amounts.
(ii) Payment through internet banking: Customers can buy goods and services online by transferring money directly from their bank accounts using internet banking. This removes the need for cash payments.
(iii) Payment through swipe machine: Here, payment is made using a debit or credit card at a point-of-sale (POS) machine. The amount is directly debited from the customer's account and credited to the firm's account.
(iv) Payment through ATM machine: Using an ATM card, a buyer can transfer money to a seller's account without cash. Both accounts should ideally be in the same bank, and the bank's IFSC code is needed.
(v) Payment by mobile app: With smartphones, many banks and companies offer e-wallet apps (like BHIM app from the government) that allow convenient cashless payments from home, increasing public confidence in digital transactions.
(vi) Payments by USSD technique: This method allows digital payments using basic mobile phones without internet. Users dial a special code like *9# and enter banking details to make payments.
(vii) Payment by Micro ATM: Through AADHAR Enabled Payment System (AEPS), payments are made using an Aadhar card on Micro ATM machines. This involves scanning fingerprints and requires the bank account to be linked with the Aadhar number.
In simple words: Cashless transactions are paying without physical money. Ways to do this include cheques, internet banking, debit/credit cards at swipe machines, ATM transfers, mobile apps like BHIM, USSD on basic phones, and Micro ATMs with Aadhar.

🎯 Exam Tip: Clearly define cashless transactions and then list and briefly explain each major medium. Provide sufficient detail for each medium without going into excessive technical jargon.

Question 3. Write the meaning of cashless transaction, while discussing its advantages in detail. Write down its limitations.
Answer: A cashless transaction is a financial exchange where no physical cash is used; instead, money is transferred digitally between accounts. This approach is increasingly seen as essential, convenient, and safe for the economy.

Advantages of Cashless transactions:
(i) Saving of time and money: Cashless methods save time spent traveling to banks or paying bills physically. Online shopping also offers discounts.
(ii) Freedom from keeping money in cash: For large purchases, carrying a lot of cash is risky and inconvenient. Cashless transactions remove this need.
(iii) Reduction in pressure on banks: When people use cashless methods, banks have less burden related to handling physical cash and maintaining records, as transactions are often computerized.
(iv) Increase in revenue: Cashless transactions transfer money directly to sellers' accounts, making income declaration more transparent and increasing tax revenue for the government.
(v) Reduction in black marketing: Cashless transactions make it harder to hide money from the government, which helps reduce black marketing and illegal activities.
(vi) Restrictions on illegal activities: Since cashless transactions are recorded, they limit speculative activities and other illegal transactions that are typically done with undisclosed cash.

Limitations of Cashless transactions:
(i) Problem for illiterate class: A significant number of illiterate and less educated people struggle with digital systems, limiting the adoption of cashless transactions.
(ii) Lack of banking habits: Many developing countries face the challenge that people do not have a habit of using bank accounts, making cashless transactions difficult.
(iii) Apprehension of fraud: Fear of online fraud prevents some people from using cashless transactions, even though fraud can be largely avoided by keeping passwords secret.
(iv) Useless in many transactions: For very small, daily transactions like buying vegetables, many prefer cash, making cashless methods seem less practical.
(v) Limited expansion of banking facilities: In a large country like India, many rural areas lack proper banking facilities, restricting cashless transactions primarily to urban areas.
(vi) Lack of effective laws to control cyber crimes: India currently lacks strong laws to quickly address and resolve cyber crimes, which can lead to customer suffering in case of fraud.
In simple words: Cashless transactions mean paying without cash. They save time, reduce the need to carry cash, help banks, increase tax revenue, and reduce illegal activities. But they are hard for uneducated people, many don't have banking habits, there's fear of fraud, they might not be useful for all small payments, banking access is limited in some areas, and cybercrime laws are not strong enough.

🎯 Exam Tip: Provide a balanced answer by defining the term and then thoroughly discussing both the benefits and drawbacks. Use clear headings for advantages and limitations.

Question 4. Write short notes on :
(i) E-wallet
(ii) USSD
(iii)AEPS
(iv)NEFT
Answer:
(i) E-wallet: An E-wallet is a mobile application issued by banks or other companies for cashless transactions. Money can be loaded into an E-wallet account using an ATM card or internet banking, allowing users to pay bills from home and conduct transactions easily and safely through their smartphones.
(ii) USSD (Unstructured Supplementary Service Data): USSD is a technique that enables digital payments even on basic mobile phones, without requiring a smartphone or internet connection. Users dial a specific code, like *9#, and enter banking details to register and make payments. It's a very simple and convenient method.
(iii) AEPS [AADHAR Enabled Payment System (AEPS)]: AEPS allows payments to be made using an Aadhar card on Point of Sale (POS) machines, often called Micro ATMs. This system relies on scanning a user's fingerprints for authentication and requires the bank account to be linked with their Aadhar number.
(iv) NEFT (National Electronic Funds Transfer): NEFT is an electronic funds transfer system maintained by the Reserve Bank of India. It allows individuals to transfer funds from one bank account to another across the country. Transactions are processed in batches throughout the day.
In simple words: E-wallet is a phone app for payments. USSD lets you pay using basic phones without internet. AEPS uses your Aadhar card and fingerprint for payment. NEFT is an online system to send money between bank accounts across India.

🎯 Exam Tip: For short notes, provide a concise definition and key features of each term. Mentioning its primary function and how it works is sufficient.

RBSE Class 12 Economics Chapter 25 Multiple-Choice Questions

Question 1. Medium of cashless transaction is :
(a) Payment through internet banking
(b) Payment through swipe machine
(c) Payment through ATM machine
(d) All of the options
Answer: (d) All of the options
In simple words: Internet banking, swipe machines, and ATM machines are all common ways to make payments without using physical cash.

🎯 Exam Tip: When faced with "All of the options," quickly confirm that each individual option is indeed correct to ensure "All of the options" is the best answer.

Question 2. Name of App issued by government of India :
(a) E-wallet
(b) BHIM
(c) Amazon
(d) Axis pay
Answer: (b) BHIM
In simple words: The BHIM app was created by the Indian government to make digital payments easy and accessible.

🎯 Exam Tip: Remember the specific names of government-backed digital initiatives, as they are often distinct from private sector offerings.

Question 3. By which technique cashless transaction is possible without using smart phone?
(a) USSD
(b) BHIM
(c) Micro ATMs
(d) All of the options
Answer: (a) USSD
In simple words: The USSD technique lets you do cashless transactions even with a basic mobile phone, without needing a smartphone.

🎯 Exam Tip: Understand which digital payment methods are inclusive and accessible to users with simpler mobile devices.

Question 5. When did the government ban Rs 1000 and Rs 500 notes by demonetisation?
(a) 9th November 2016
(b) 12th November 2016
(c) 9th November 2015
(d) 12th November 2015
Answer: (a) 9th November 2016
In simple words: The Indian government stopped using old Rs 1000 and Rs 500 notes on November 9, 2016.

🎯 Exam Tip: Specific dates for major economic policies like demonetisation are important facts to remember.

Question 6. How much money has the government spent on promoting digital transactions and cashless transaction?
(a) Rs 100 crore
(b) Rs 50 crore
(c) Rs 94 crore
(d) Rs 60 crore
Answer: (c) Rs 94 crore
In simple words: The government spent Rs 94 crore to encourage people to use digital and cashless ways to pay.

🎯 Exam Tip: Keep track of key financial figures related to government spending on public awareness campaigns for economic initiatives.

RBSE Class 12 Economics Chapter 25 Very Short Answer Type Questions

Question 1. What is E-commerce ?
Answer: E-commerce, or electronic business, is a modern method of conducting business using the internet. It involves buying and selling goods and services online.
In simple words: E-commerce means doing business, like buying and selling, over the internet.

🎯 Exam Tip: A simple, direct definition of E-commerce focusing on online transactions is usually sufficient for very short answer questions.

Question 2. What benefits do buyers and sellers get from e-commerce ?
Answer: Through E-commerce, buyers can conveniently purchase goods and services from their homes. Sellers, in turn, can sell their products to customers all over the world.
In simple words: Buyers can shop from home, and sellers can sell their products globally using e-commerce.

🎯 Exam Tip: Focus on the mutual benefits of e-commerce: convenience for buyers and wider reach for sellers.

Question 4. Write two mediums of cashless transactions.
Answer: Two mediums of cashless transactions are:
1. Payment through cheque or draft.
2. Payment through swipe machine (using debit/credit cards).
In simple words: You can pay without cash using a cheque or by swiping your card.

🎯 Exam Tip: Provide two distinct and common examples when asked to list mediums of cashless transactions.

Question 5. How can customer take benefit of swipe machine ?
Answer: Customers can use a swipe machine to make cashless payments by using their debit-cum-ATM card or credit card. This allows for quick and easy transactions.
In simple words: Customers can use their debit or credit card with a swipe machine to pay without cash.

🎯 Exam Tip: Explain the practical application of payment technologies from the user's perspective, mentioning the specific cards used.

Question 6. Write the full form of BHIM App.
Answer: The full form of BHIM App is Bharat Interface for Money. It is an initiative by the Indian government.
In simple words: BHIM stands for Bharat Interface for Money.

🎯 Exam Tip: Correctly stating full forms of acronyms is essential for factual accuracy.

Question 7. What type of App is BHIM App?
Answer: The BHIM App is a government App. It was launched by the Indian government to promote digital payments.
In simple words: BHIM is an app from the government.

🎯 Exam Tip: Identify whether an application or initiative is government-backed or private, as this often indicates its purpose and scope.

Question 8. BHIM App is dedicated to which individual ?
Answer: The BHIM App is dedicated to Dr. Bhimrao Ambedkar. His name was chosen to honor his contributions.
In simple words: The BHIM App is named after Dr. Bhimrao Ambedkar.

🎯 Exam Tip: Knowing the historical or cultural context behind the naming of schemes or apps can provide valuable insights.

Question 9. Write the full name of USSD technique.
Answer: The full name of the USSD technique is Unstructured Supplementary Service Data. It's a method for mobile communication.
In simple words: USSD means Unstructured Supplementary Service Data.

🎯 Exam Tip: Ensure precise recall of full forms for technical terms in digital payments.

Question 10. Write the full form of AEPS.
Answer: The full form of AEPS is AADHAR Enabled Payment System. It uses Aadhar for secure transactions.
In simple words: AEPS stands for AADHAR Enabled Payment System.

🎯 Exam Tip: Understanding the full form helps in comprehending the functionality of the payment system.

Question 12. Write one limitation of cashless transactions.
Answer: One limitation of cashless transactions is the problem faced by the illiterate class. Many people who cannot read or write struggle to use digital payment systems.
In simple words: A problem with cashless payments is that people who cannot read or write find them difficult to use.

🎯 Exam Tip: Focus on a significant socio-economic barrier when asked about limitations of digital payment systems.

Question 13. Write one precaution to be taken during cashless transactions.
Answer: One precaution to take during cashless transactions, especially while using net banking, is to regularly update your account statement. This helps in monitoring transactions and spotting any unauthorized activity.
In simple words: A key precaution is to regularly check your bank statement when doing cashless transactions.

🎯 Exam Tip: Emphasize proactive monitoring of financial records as a crucial safety measure in digital transactions.

Question 14. When should mobile app be used?
Answer: A mobile app should only be used after verifying it officially. This ensures it is a legitimate and secure application from a trusted source, protecting your financial data.
In simple words: Always use mobile apps for payments only after making sure they are official and safe.

🎯 Exam Tip: Prioritize verification of mobile apps from official sources to protect against malware and phishing attacks.

Question 15. Why should we not change the registered mobile number in bank account ?
Answer: We should not change the registered mobile number in a bank account often because all important messages and alerts regarding payments and transactions are sent to that specific number. Changing it frequently can lead to missed notifications and security risks.
In simple words: Don't change your bank's registered mobile number often because all payment messages go to that number.

🎯 Exam Tip: Explain the importance of a stable registered mobile number for receiving critical bank alerts and maintaining transaction security.

RBSE Class 12 Economics Chapter 25 Short Answer Type Questions (SA-I)

Question 1. Internet is important for which type of business?
Answer: The internet is crucial for businesses that involve basic infrastructure, consumer services, and value-added services. It helps these businesses operate efficiently and reach a wider audience.
In simple words: The internet is important for businesses that deal with basic services, helping customers, and adding value to products.

🎯 Exam Tip: Broadly categorize the types of businesses that benefit most from internet connectivity, focusing on services and value creation.

Question 2. At present, which medium is used for digitalisation?
Answer: Currently, computers, telecommunication networks, and cable TV networks are widely used for digitalization. These technologies help in converting information and processes into a digital format.
In simple words: Today, computers, phone networks, and cable TV are used a lot for making things digital.

🎯 Exam Tip: Identify the core technological components that drive the process of digitalization in the modern era.

Question 4. In developing countries governments are promoting which type of economical transaction?
Answer: In developing countries, governments are actively promoting cashless transactions. This helps in formalizing the economy, increasing transparency, and reducing the circulation of black money.
In simple words: Governments in developing countries are encouraging people to use cashless payments.

🎯 Exam Tip: Understand the strategic reasons why governments in developing nations prioritize cashless transactions, often linking to economic growth and transparency.

Question 5. Cashless transaction is a medium of what ?
Answer: A cashless transaction is a medium of E-commerce. In India, this method has been used for about 10 years, showing its growing integration with digital trade.
In simple words: Cashless transactions are a way to do e-commerce, and they've been used in India for about ten years.

🎯 Exam Tip: Connect cashless transactions directly to the broader concept of e-commerce, highlighting their fundamental relationship.

Question 6. Write two advantages of cashless transactions.
Answer: Two advantages of cashless transactions are:
1. Saving of money and time: Digital payments reduce the need for physical travel to banks or payment centers.
2. Freedom from keeping money in cash: People do not need to carry large amounts of physical cash, which increases security.
In simple words: Cashless payments save you money and time, and you don't have to carry a lot of cash around.

🎯 Exam Tip: List practical benefits that directly impact individuals, such as convenience and security, when asked for advantages.

Question 7. Write four mediums of cashless transactions.
Answer: The four mediums of cashless transactions are:
1. Payment through cheque or bank draft.
2. Payment through internet banking.
3. Payment through swipe machine.
4. Payment through mobile app.
In simple words: Four ways to pay without cash are cheques, internet banking, card swiping, and mobile apps.

🎯 Exam Tip: Provide a diverse list of cashless transaction methods, covering both traditional and modern digital options.

Question 8. Write four benefits of cashless transactions.
Answer: The four benefits of cashless transactions are:
1. Saving of time and money: Digital payments are quick and eliminate the need for physical cash handling.
2. Freedom from keeping cash: Reduces the risk and inconvenience of carrying large sums of money.
3. Reduction in pressure on banks: Less physical cash handling eases operational load on banks.
4. Increase in tax revenue: Digital transactions provide better transparency, which helps in tracking income and increases government tax collection.
In simple words: Cashless payments save time, free you from carrying cash, reduce bank workload, and help the government collect more taxes.

🎯 Exam Tip: Include both individual and societal benefits when listing advantages, such as personal convenience and macroeconomic improvements.

RBSE Class 12 Economics Chapter 25 Short Answer Type Questions (SA-II)

Question 1. Why are developing economies encouraging cashless transactions?
Answer: Developing economies are encouraging cashless transactions because the world is rapidly changing in the 21st century, and these countries are moving from less developed to more advanced stages. Cash is heavily used in their economies, which increases the amount of money in circulation and the demand for new currency. Printing and distributing currency costs the RBI a lot of money. Therefore, by promoting cashless transactions, governments in developing countries aim to reduce these costs, increase financial transparency, and encourage a modern digital payment culture.
In simple words: Developing countries want more cashless payments to save money spent on printing cash, manage finances better, and help their economies grow digitally.

🎯 Exam Tip: Explain the economic and administrative reasons behind the promotion of cashless transactions in developing economies, such as cost reduction and financial transparency.

Question 2. Explain E-commerce ?
Answer: E-commerce, or electronic business, is an advanced and modern business method that operates entirely through the internet. It enables consumers to purchase goods and services from their homes and allows sellers to reach customers globally. E-commerce also helps sellers get important feedback from consumers about their products, continuously improving their offerings.
In simple words: E-commerce is a modern way to do business online, letting people buy from home and sellers reach customers everywhere, while also getting feedback.

🎯 Exam Tip: Define E-commerce clearly, highlighting its internet-based nature and the benefits it offers to both consumers (convenience) and businesses (global reach, feedback).

Question 3. Explain cashless transaction.
Answer: A cashless transaction is an economic activity where money is exchanged without using physical cash. This doesn't mean there's a shortage of cash, but rather that people prefer to settle their transactions digitally. It promotes a culture of digital payments.
The common cashless modes of transactions include:
1. Through cheque or bank draft.
2. Through internet banking.
3. Through swipe machine (using debit/credit cards).
4. Through mobile app.
In simple words: A cashless transaction is paying for things without physical money, using digital ways instead. Common methods are cheques, online banking, card payments, and mobile apps.

🎯 Exam Tip: Define cashless transactions precisely, emphasizing digital settlement over physical cash. Supplement the definition with a concise list of common transaction modes.

Question 5. What is BHIM?
Answer: Bharat Interface for Money (BHIM) is a payment app. It helps users make simple, fast, and secure digital transactions. Users can send and receive money directly with this app.
In simple words: BHIM is a mobile app for making quick and easy payments. It helps people send and receive money directly.

🎯 Exam Tip: When defining an app like BHIM, mention its full form and main purpose (simple, fast, secure transactions) for a complete answer.

Question 6. What is the importance of cashless transaction?
Answer: Cashless transactions are important because they reduce cash in the economy, which helps lessen corruption and black marketing. They also take pressure off the Reserve Bank of India (RBI) from having to print too much currency. Cashless transactions save time and effort as people do not need to visit banks for various payments. The government also promotes digital transactions by offering discounts. Overall, cashless transactions are convenient, safe, and necessary for a modern economy.
In simple words: Cashless payments help reduce corruption and save time. They also make the economy stronger and safer by lowering the need for physical cash.

🎯 Exam Tip: When discussing importance, focus on both individual benefits (convenience, safety) and broader economic benefits (reduced corruption, less burden on RBI).

Question 7. Explain the precautions that should be taken while dealing in digital transactions.
Answer: When doing digital transactions, it's important to take several precautions. These include keeping your ATM PIN code secret and never writing it down with your cards. You should only use mobile payment apps after checking they are official and safe. Do not lend your mobile phone to anyone else for making payments. Also, maintain secrecy when entering your ATM card PIN on a swipe machine. If you ever suspect any fraud or a doubtful transaction, contact your bank right away.
In simple words: Always keep your PIN secret, use official apps, and never share your phone for payments. If anything looks suspicious, call your bank immediately.

🎯 Exam Tip: Always list specific, actionable safety measures. Emphasize secrecy of personal details and immediate reporting of suspicious activity.

Question 8. What are the mediums of cashless transactions?
Answer: The different ways to make cashless transactions include:
1. Payment through cheque or bank draft.
2. Payment through internet banking.
3. Payment through swipe machine.
4. Payment through ATM machine.
5. Payment through Mobile app.
6. Payment through USSD technique.
7. Payment through Micro ATMs.
In simple words: Cashless payments can be done using cheques, internet banking, swipe machines, ATMs, mobile apps, USSD, and Micro ATMs.

🎯 Exam Tip: List as many mediums as possible for full marks. Grouping similar methods (e.g., card-based, app-based) can help remember them.

RBSE Class 12 Economics Chapter 25 Essay Type Questions

Question 1. Explain the relevance of cashless transactions in context of India.
Answer: Cashless transactions are very important for India, especially after the demonetization of Rs 500 and Rs 1,000 notes in November 2016. This event pushed the government to encourage people to use less cash. In a large country like India, printing and managing currency is costly and takes time, making cashless options a better choice. The government and private companies offer discounts and cashback to promote digital transactions. The Indian government spent Rs 94 crore on advertisements to make digital payments popular. Thus, cashless transactions are a simple, convenient, and necessary tool for India's fast-growing economy.
In simple words: Cashless transactions are vital for India because they help the economy grow, reduce the cost of printing money, and offer convenience. The government actively promotes them with incentives.

🎯 Exam Tip: Connect the relevance to specific events (like demonetization) and government initiatives, and highlight both economic and practical benefits for India.