Important questions, Economic Chapter - 3 Money and Credit

 Economic Chapter - 3 Money and Credit

MCQs

1. Which of the following is a modern form of money?
a) Grains
b) Gold
c) Silver
d) Cheque

2. Which organization issues currency notes on behalf of the central government in India?
a) State Bank of India
b) Reserve Bank of India
c) Punjab National Bank
d) Ministry of Finance

3. Which one of the following is the main source of income for banks?
a) Deposits from customers
b) Loans given by RBI
c) Interest on loans given to borrowers
d) Interest on deposits

4. Which among the following is an informal source of credit?
a) Bank
b) Cooperative Society
c) Moneylender
d) Self-Help Group

5. What is the main reason why banks demand collateral while giving loans?
a) To ensure repayment
b) To earn profit
c) To check black money
d) To reduce lending

2 or 3 Mark Questions

1. What is barter system? Why was it replaced by money?
2. What is Double Conincidence of want?
3. Define Demand Deposits.
4. Define Cheque. How does it differ from a currency note?
5. What is collateral? Give two examples.
6. Explain the difference between formal sector loans and informal sector loans.
7. How do Self-Help Groups (SHGs) help borrowers?
8. Why do rich households depend more on formal sources of credit while the poor depend on informal sources?
9. State two features of modern currency.

5 Mark Questions

1.  Explain the role of the Reserve Bank of India (RBI) in the Indian banking system.
2.  Why are terms of credit different for different borrowers? Explain with examples.
3.  Why do we need to expand formal sources of credit in India? Explain.
4.  Explain how credit plays a positive and a negative role in development. Support your answer with suitable examples.
5.  Describe the functioning of Self-Help Groups (SHGs). How do they help rural borrowers?
6. Write the function of banks.
7. How Reserve Bank of India keep an eye on banks.