MCQ Class 10 Social Science Chapter 3 Money and Credit

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Money and Credit Class 10 Social Science MCQs Questions with Answers

Refer below for MCQ Class 10 Social Science Chapter 3 Money and Credit with solutions. Solve questions and compare with the answers provided below

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

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

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

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.

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

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

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

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

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

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

Question. What do you mean by ‘credit’?
(a) Agreement in which the lender(bank or moneylender) 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 lends money to borrowers

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

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

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

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

Question. Credit from____ pushes the borrower into a painful situation.
(a) Cooperateves
(b) SHG
(c) Moneylenders
(d) Banks

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

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

Question. SHG members usually belongs to________.
(a) Different states
(b) Different neighbourhood
(c) One neighbourhood
(d) Rich family

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

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

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

Question. How many members are their in SHG?
(a) 10-15
(b) 15-20
(c) 20-25
(d) 25-30

Question. _______credit is crucial for the development of a country.
(a) Higher cost of
(b) Less
(c) Cheap
(d) Industrial

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.

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

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

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

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 Resrve Bank of India.

Question. The terms of credit comprise of ________.
(a) Fixed deposit
(b) Voter card
(c) Collateral
(d) Pan card

Question. Organisations of rural poor, that help borrowers to overcome the problem of lack of collateral are
(a) Self Help Groups.
(b) Service Holder Groups.
(c) Self Housing Groups.
(d) Soul Harassing Groups.

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

Question. Formal sources of loans include loans from 
(A) Banks
(B) Money lenders
(C) Co-operatives socities
(D) Traders.
(a) a and b
(b) a and d
(c) b and c
(d) a and 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

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

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

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

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

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

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

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

Question. Bank use 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

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

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

Question. The purpose of devaluation of India 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.

Question. Which one of the following statement is incorrect regarding commercial banking?
(a) It deals with money. It accepts deposits and advance 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 institutions whose aim is to earn profit

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

Question. Monetary Measures to control inflation_______ 
(a) Reduction in public expenditure
(b) Increase in cash reserve ratio
(c) Increase in taxes
(d) Surplus budget

FILL IN THE BLANKS

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

Question. __________costs of borrowing increase the debt-burden.

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

Question. __________issues currency notes on behalf of the Central Government.

TRUE / FALSE 

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

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

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

Question. Money is medium of Exchange.

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

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