MCQs for Class 10 Social Science Economics Chapter 3 Money and Credit: In this article, we have covered all the important MCQs for Free for Class 10 Term 1 2021-22 Board Exams. In accordance with the latest pattern, Padhle is here with MCQ Questions for Class 10.

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Class 10 Social Science Economics Chapter 3 Money and Credit MCQ

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

Answer: (b) Cooperative societies

2. Who issues the currency notes in India?
(a) Currency notes are issued by the Finance Commission.
(b) All the nationalized banks can issue the currency notes.
(c) Only Reserve Bank of India can issue currency notes.
(d) Any individual or organization can issue cur¬rency notes with the permission of the govt.

Answer: (c) Only Reserve Bank of India can issue currency notes.

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 guarantee to a lender.
(d) The amount invested in a business.

Answer: (c) It is an asset of the borrower used as guarantee to a lender.

4. Which among the following banks issues currency notes on behalf of the Central Government in India?
(a) RBI
(b) State Bank of India
(c) Bank of India
(d) Central Bank of India

Answer: (a) RBI

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

Answer: (a) Paper notes

6. Credit or loan refers to an agreement between :
(a) lender and borrower
(b) consumer and producer
(c) government and tax payer
(d) all the above

Answer: (c) government and tax payer

7. Which one of the following is the newer way of providing loans to the rural poor, particularly women?
(a) Cooperative Banks
(b) Grameen Banks
(c) Self-Help Groups
(d) Moneylenders

Answer: (c) Self-Help Groups

8. What do the banks do with the deposits which I they accept from the customers?
(a) Banks use these deposits for charitable activities.
(b) Banks use a major portion of deposits to extend loans.
(c) Banks use deposits to give bonus to their employees.
(d) Banks use deposits to set up more branches in the country.

Answer: (b) Banks use a major portion of deposits to extend loans.

9. System of exchanging goods for goods is called :
(a) monetary system
(b) credit system
(c) barter system
(d) exchange system

Answer: (c) barter system

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

Answer: (d) Moneylenders

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11. What is the main source of income of a bank?
(a) Bank charges that the depositors pay for ; keeping their money safe is the main ; source of the bank’s income.
(b) The difference between what is charged from the borrowers and paid to the depositors is the main source of bank’s income.
(c) Banks earn huge amounts of money by investing the money of the depositors in various company shares.
(d) The Government of India gives huge amounts of money to the banks to help their smooth functioning.

Answer: (b) The difference between what is charged from the borrowers and paid to the depositors is the main source of bank’s income.

12. 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

Answer: (c) Plastic money

13. Name the system in which the double coincidence of wants is an essential feature.
(a) Barter system
(b) Money economy
(c) Global economy
(d) None of these

Answer: (a) Barter system

14. An agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment refers to
(a) Debt
(b) Deposit
(c) Credit
(d) Collateral

Answer: (c) Credit

15. 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

Answer: (b) a small proportion

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16. Grameen Bank of Bangladesh was started in
(a) 1960s
(b) 1970s
(c) 1980s
(d) 1990s

Answer: (b) 1970s

17. Which body (authority) supervises the functioning of formal sources of loans?
(a) Finance Ministry
(b) Head Office of each Bank
(c) Reserve Bank
(d) Cooperative Societies

Answer: (c) Reserve Bank

18. Terms of credit are with respect to :
(a) interest rate
(b) collateral
(c) documentation
(d) All of the above

Answer: (d) All of the above

19. In a SHG, most of the decisions regarding loan activities are taken by
(a) Banks
(b) Members
(c) Non-government organisation
(d) Cooperative

Answer: (b) Members

20. Money-lenders usually demand a ‘security’ from the borrower. What is the formal word used for the ‘security’, such as land, vehicle, livestock, building, etc.?
(a) Deposit
(b) Collateral
(c) Credit
(d) Guarantee

Answer: (b) Collateral

21. Regional Rural Banks were set up in __.
(a) 1969
(b) 1979
(c) 1989
(d) 1999

Answer: (a) 1969

22. In which country is the Grameen Bank meeting the credit needs of over 6 million poor people?
(a) Bhutan
(b) Sri Lanka
(c) Bangladesh
(d) Nepal

Answer: (c) Bangladesh

23. Which of the following is not an informal source of credit?
(a) Money-lender
(b) Relatives and Friends
(c) Commercial Banks
(d) Traders

Answer: (c) Commercial Banks

24. A typical Self Help Group usually has
(a) 100-200 members
(b) 50-100 members
(c) less than 10 members
(d) 15-20 members

Answer: (d) 15-20 members

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

Answer: (b) 15%

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

Answer: (d) None of the above

27. Which households take more loans from the formal sector?
(a) Poor households and rich household.
(b) Well off households and households with few assets.
(c) Poor households and well off households
(d) Well off households and rich households.

Answer: (d) Well off households and rich households.

28. Which among these is an essential feature of 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

Answer: (b) It is based on double co-incidence of wants

29. 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

Answer: (b) Formal

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

Answer
Answer: (d) Precious metals

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