Money and Credit For Class 10 Economics MCQ Questions

Q 1 – Credit or loan refers to an agreement between:
(a) lender and borrower
(b) consumer and producer
(c) government and taxpayer
(d) all the above

Q 2 – Which one of the following is a formal source of credit?
(a) Traders
(b) Cooperative societies
(c) Moneylenders
(d) Friends and relatives

Q 3 – Which one of the following is the appropriate meaning of collateral?
(a) It is the sum total of money borrowed from banks.
(b) The amount borrowed from friends.
(c) It is an asset of the borrower used as a guarantee to a lender.
(d) The amount invested in a business.

Q 4 – Money
(a) eliminates double-coincidence of wants
(b) acts as a common measure of value
(c) acts as a standard of deferred payments
(d) all the above

Q 5 – Which one of the following is a modern form of currency?
(a) Paper notes
(b) Gold
(c) Silver
(d) Copper

Q 6 – Interest rate, security and documentation requirement, and the mode of repayment together comprise what is called the:
(a) Loan factor
(b) Credit factor

(c) Terms of the loan
(d) Terms of credit

Q 7 – Terms of credit are with respect to:
(a) interest rate
(b) collateral
(c) documentation
(d) all the above

Q 8 – Cheap and affordable credit is crucial for:
(а) The development of urban areas
(b) The development of rural areas
(c) The country’s development
(d) All the above

Q 9 – The system of exchanging goods for goods is called:
(a) monetary system
(b) credit system
(c) barter system
(d) exchange system

Q 10 – Which of the following is the main informal source of credit for rural households in India?
(a) Friends
(b) Relatives
(c) Landlords
(d) Moneylenders

Q 11 – At present which form of money is increasingly used apart from paper money?
(a) Commodity money
(b) Metallic money
(c) Plastic money
(d) All the above

Q 12 – Grameen Bank of Bangladesh was started in
(a) 1960s
(b) 1970s
(c) 1980s
(d) 1990s  

Q 13 – In early ages, Indians used grains and cattle as:
(a) Money
(b) Food
(c) Public property
(d) None of the above

Q 14 – What are the modern forms of money?
(a) Currency
(b) Plastic money
(c) Demand deposits
(d) All the above

Q 15 – In which country is the Grameen Bank meeting the credit needs of over 6 million poor people?
(a) Bhuta
(b) Sri Lanka
(c) Bangladesh
(d) Nepal

Q 16 – What portion of deposits are kept by the banks for their day-to-day transaction?
(a) 10%
(b) 15%
(c) 20%
(d) 25%

Q 17 – Currency is issued in India by :
(a) commercial banks
(b) regional rural banks
(c) nationalized banks
(d) Reserve Bank of India

Q 18 – No individual in India can:
(a) Legally refuse a payment made in rupees
(b) Legally refuse a payment made by cheque
(c) Legally refuse a payment made by draft
(d) All the above

Q 19 – At present which form of money is increasingly used apart from paper money?
(a) Commodity money

(b) Metallic money

(c) Plastic money

(d) All the above

Q 20 – What portion of deposits are kept by the banks for their day-to-day transactions?
(a) 10%
(b) 15%

(c) 20%
(d) 25%

Q 21 –  Which state accounts for the maximum percentage of SHGs (self-help groups) in bank credit?
(a) Andhra Pradesh
(b) Tamil Nadu
(c) Kerala
(d) Karnataka

Q 22 – Which among these is an essential feature of the barter system?
(a) Money can easily exchange any commodity
(b) It is based on the double coincidence of wants
(c) It is generally accepted as a medium of exchange of goods with money
(d) It acts as a measure and store of value

Q 23 – Who supervises the credit activities of lenders in the informal sector?
(a) Central Bank of India
(b) Commercial banks
(c) Moneylenders
(d) None

Q 24 – Banks do not give loans:
(a) to small farmers
(b) to marginal farmers
(c) to industries
(d) without proper collateral and documents

Q 25 – Which one of the following is the main source of credit for the rich households?
(a) Informal
(b) Formal
(c) Both formal and informal
(d) Neither Formal nor informal

Q 26 – Which of the following is not a source of rural credit?
(a) Regional rural banks
(b) Moneylenders
(c) Traders
(d) Government

Q 27 – Which among these is an essential feature of the barter system?
(a) Money can easily exchange any commodity
(b) It is based on double co-incidence of wants

(c) It is generally accepted as a medium of exchange of goods with money
(d) It acts as a measure and store of value

Q 28 – Regional Rural Banks were set up in ________.
(a) 1969
(b) 1979
(c) 1989
(d) 1999

Q 29 – Which one of the following is the important characteristic of the modern form of currency?
(a) It is made from precious metal
(b) It is made from things of everyday use
(c) It is authorized by the commercial banks
(d) It is authorized by the Government of the country

Q 30 – Rate of interest charged by moneylenders as compared to that charged by banks is:
(a) lower
(b) same
(c) slightly higher
(d) much higher

Q 31 – Which one of the following agencies issues currency notes on behalf of the government of India?
(a) Ministry of Finance
(b) Reserve Bank of India
(c) State Bank of India
(d) World Bank

Q 32 – Who supervises the functioning of formal sources of loans?
(a) Reserve Bank of India
(b) Central government
(c) State government
(d) None

Q 33 – Which one of the following is a major reason that prevents the poor from getting loans from the banks?
(a) Lack of capital
(b) Not affordable due to high rate of interest
(c) Absence of collateral security
(d) Absence of mediators

Q 34 – Which one of the following is not a modern form of money?
(a) Demand Deposits
(b) Paper currency
(c) Coins
(d) Precious metals

Q 35 – Which of the following is a major reason which prevents the poor from getting bank loans?
(a) Absence of collateral (security)
(b) Non-repayment of loans
(c) Higher interest rates
(d) Documentation

Q 36 – Which is not the main source of credit from the following for rural households in India?
(a) Traders
(b) Relatives and friends
(c) Commercial Banks
(d) Moneylenders

Q 37 – Which of the following is not a modern form of money?
(a) Paper notes
(b) Demand deposits
(c) Silver coins
(d) None of the above

Q 38  – Which one of the following is not a modern form of money?
(a) Demand Deposits
(b) Paper currency

(c) Coins
(d) Precious metals

Q 39 – Who helps the borrowers to overcome the problem of lack of collateral?
(a) Self-help group (SHG)
(b) State government

(c) Employers
(d) Moneylenders

Q 40 – The part of the total deposits which a bank keeps with itself in cash is
(a) zero
(b) a small proportion
(c) a big proportion
(d) 100 percent

Q 41 – Which of the following is not an advantage of a self-help group?
(a) Grant of timely loans
(b) Reasonable interests
(c) A platform to discuss various issues
(d) Does not help women to become self-reliant.

Q 42 – Identify the formal source of credit:
(a) Cooperative societies
(b) Moneylenders
(c) Traders
(d) Landlords

Ans – (a) Cooperative societies

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Q 43 – Which of the following is not true regarding the inconvenience of Barter Exchange?
(a) Lack of double coincidence of wants
(b) Absence of divisibility
(c) Difficulty in storing wealth
(d) Availability of money as a medium of exchange.

Q 44 – Which one of the following is NOT an informal sector loan for a poor rural households in India?
(a) Commercial Banks
(b) Moneylenders
(c) Traders
(d) Landlords

Q 45 – When both parties agree to sell and buy each other’s commodities it is known as:
(a) measure of value
(b) double coincidence of wants
(c) store of value
(d) credit