Money and Credit Mcq

Class -X

Sub - Eco MCQ. Chap --3 (Money and Credit)

1. The exchange of goods for goods is known as :

(a) Banker of option. (b) Bills of exchange
(c) Barter Systen (iv) Currency

2. The problem with the barter system is --

(a) Double coincidence of wants. (b) A good transport system
(c) Advertising. (d) Communication
3. What a person desires to sell is exactly what the other wishes to buy ---

(a) Terms of credit. (b) Double coincidence of wants
(c) Selling. (d) Trade

4. Money acts as -----

(a) Medium of exchange. (b) Medium of information
(c) Medium of trade. (d) None

5. Currency is issued by:

(a) RBI on behalf of central government
(b) By president of India.
(c) By finance minister
(d) None of them

6. Which of the following statements are true regarding currency ?

(a) It includes paper notes and coins
(b) It is issued by RBI on behalf of the government.
(c) No other individual or organisation is allowed to issue it.
(d) No individual in India can legally refuse a payment made in rupees.

(i) a , b and c. (ii) a , b and d. (iii) b , c and d. (iv) a , b , c and d


7. A demand deposit is the ____.

(a) Interest paid on a deposit
(b) Amount you can take as a loan
(c) Facility to withdraw money at any time
(d) Facility to open a bank account on demand

8. A __________ is a paper instructing the bank to pay a specific amount from the

person’s account to the person in whose name the cheque has been issued.

(a) Demand Deposit. (b) Cheque. (c) Draft. (d) None

9. Major portion of the deposits is used by banks for :

(a) setting up new branches (b) paying taxes
(c) paying interest on loans (d) extending loans

10. Which of the following statements regarding Bank are true ?

(a) Banks in India these days hold about 15 per cent of their
deposits as cash.
(b) Banks use the major portion of the deposits to extend loans .
(c) Banks charge a higher interest rate on loans than what they offer on deposits.
(d) The difference between what is charged from borrowers and

what is paid to depositors is their main source of income.

(i) a , b , c and d. (ii) a , b and c. (iii) b , c and d. (iv) a , b and d

11. Which of the following statements regarding Credit are true ?

(a) It is an agreement between the lender and the borrower.
(b) Money , goods or services are supplied in it.
(c) The agreement is done in promise of future payment.
(d) Credit is also known as loan.

(i) a , b , c and d. (ii) a , b and d. (iii) a , b and c. (iv) b , c and d

12. Formal sources of credit do not include:

(a) banks. (b) cooperatives
(c) employers. (d) none of these

13. Informal sector loans include:

(a) NABARD. (b) State Bank of India
(c) Moneylenders. (d) both (b) and (c)

14. A bank gives loan to people on certain conditions, which are known as ____.

(a) Terms of credit
(b) Conditions of banks
(c) Conditions of the government
(d) Terms of RBI

15. A person is said to be in a debt trap when ____.

(a) He takes credit from the informal sector
(b) He cannot get credit from the formal sector
(c) The loan amount is less than their requirement
(d) The loan repayment amount exceeds their income

16. Terms of credit are :

(a) Documentation. (b) Collateral
(c) Mode of repayment. (d) Interest Rate

(i) a , b and c. (ii) a , b , c and d. (iii) a , b and d. (iv) a , c and d

17. What is the term used by a bank for the security that it asks against a loan?

(a) Collateral. (b) Deposit
(c) Guarantee. (d) Security

18. Which of the following statements are true regarding collateral ?

(a) It is a security against loan.
(b) It refers to assets owned by borrowers.
(c) It may include land , building , livestocks , vehicle , deposit with banks etc
(d) In case of non-payment of loans the lenders can sell the collateral to obtain
payment.

(i) a , b and c. (ii) a , c and d. (iii) b , c and d. (iv) a , b , c and d

19. Which of the following statements regarding formal sectors of credit are true :-

(a) They include banks and cooperatives.
(b) Their functioning is supervised by the RBI.
(c) They charge less interest rate as compared to that of informal sectors.
(d) They require collateral to provide loans.

(i) a , b and c. (ii) a , c and d. (iii) b , c and d. (iv) a , b , c and d

20. In a SHG, most of the decisions regarding savings and loan activities are taken by:

(a) bank. (b) Group Members
(c) Non-government organisation. (d) Government

Answers :-

1. C 2. A 3. B 4. A 5 . A
6. iv 7. C 8. B 9. D 10. iv
11. i 12. C 13. C 14. A 15 . D
16.iv 17. A 18. iv 19. iv 20. B