CBSE X Money and Credit practice questions

Question 1

Money serves as an intermediary in the exchange of goods. What is this function called?

Accepted Answer

Medium of exchange

Answer

Face value

Answer

A production input

Answer

A guarantee of profit

Question 2

What is the double coincidence of wants in barter?

Accepted Answer

Each party wants what the other offers and agrees to exchange

Answer

Only one party wants the other’s product

Answer

Both parties must sell identical products

Answer

Neither party needs the other’s product

Question 3

Why can expanded cooperative lending benefit rural members?

Accepted Answer

It can improve access to comparatively affordable formal credit and reduce reliance on expensive informal borrowing

Answer

It guarantees all members never have to repay

Answer

It requires all members to borrow only from moneylenders

Answer

It prevents any productive use of credit

Question 4

Why are ordinary withdrawable bank balances called demand deposits?

Accepted Answer

They can be withdrawn on demand

Answer

They cannot ever be withdrawn

Answer

They are compulsory taxes

Answer

They are always loans from moneylenders

Question 5

Members can take small loans from the group itself to their needs, The group charges interest on these loans but this is still less than what the moneylenders charge. After a year or two, if the group is regular in savings, it becomes eligible for availing loan from the bank. Loan is sanctioned in the name of the group and is meant to create self-employment opportunities for the members. Analyse the information regarding activities of the SHG given above and tell when does it become eligible to get loan from the bank?

Accepted Answer

If it is regular in Savings

Answer

If it gives some portion of farm produce to bank

Answer

If it enrolls large number of women members in the group.

Answer

If it is doing good social work

Question 6

Which combination describes RBI supervision of banks and its purpose?

Accepted Answer

Checking required reserves and lending information to support regulation and appropriate credit allocation

Answer

Choosing every household’s groceries

Answer

Replacing all banks with moneylenders

Answer

Ending every reporting requirement

Question 7

How do banks mediate between savers and borrowers?

Accepted Answer

They accept deposits and lend a portion to people needing funds, retaining required liquidity

Answer

They keep every deposit permanently idle

Answer

They give all deposits away without repayment

Answer

They only exchange goods through barter

Question 8

What is the double coincidence of wants?

Accepted Answer

Both parties have to agree to sell and buy each other’s commodities.

Answer

Exchanging commodity for commodity.

Answer

Credit on commodity.

Answer

Loan on commodity till sold further.