Money And Credit Class 10 MCQ Quiz – Test Your Knowledge

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Are you preparing for your CBSE Class 10 Social Science board exam? This MCQ quiz on "Money and Credit" will help you revise key concepts like forms of money, the role of credit, formal and informal sources of credit, and the impact of credit on the economy.

About the Quiz

Chapter Name: Money and Credit
Subject: Social Science (Economics)
Book: NCERT Class 10 Economics
Question Type: Multiple Choice Questions (MCQs)
Leaderboard: Yes (Check Your Rank!)

Why Take This Quiz?

✔ Quick revision for CBSE exams
✔ Based on NCERT textbook concepts
✔ Leaderboard to track top performers

Click Below to Start the Quiz!

Chapter 3 - Money and Credit

1 / 15

What is a "debt trap"?

A situation where an individual or organization has too much money and cannot spend it

A situation where an individual or organization has too many assets and cannot manage them

A situation where an individual or organization becomes trapped in a cycle of debt that they are unable to escape from

A situation where an individual or organization has too many loans and cannot repay them

2 / 15

What is the role of Self-Help Groups (SHGs) in rural society?

They provide a platform for discussing and acting on social issues.

They help borrowers overcome the problem of lack of collateral.

They provide loans to small-scale industries and rural households.

All of the above.

3 / 15

Which one of the following options describes ‘Collateral’?

Asset as a guarantee for a loan

Certain products for barter

Double coincidence of wants

Trade in barter

4 / 15

Why is modern currency accepted as a medium of exchange?

Because it is used by all countries

Because it is accepted by international organizations

Because it is authorized by the government

Because it is backed by gold reserves

5 / 15

What are demand deposits?

Deposits that can be withdrawn on demand

Deposits that are used for loans

Deposits that can be withdrawn only after a fixed period

Deposits that earn a higher interest rate

6 / 15

Rita has taken a loan of Rs.7 lakhs from the bank to purchase a car. The annual interest rate on the loan is 14.5 percent and the loan is to be repaid in 3 years in monthly installments. The bank retained the papers of the new car as collateral, which will be returned to Rita only when she repays the entire loan with interest.

Analyze the loan information given above, considering one of the following correct options.

Terms of credit

Interest on loan

Mode of re-payment

Deposit criteria

7 / 15

A porter making pots, wants to exchange pots for wheat. Luckily, he meets a farmer who has wheat and is willing to exchange it for pots. What is this situation known as?

Incidence of wants

None of the above

Barter system of wants

Double incidence of wants

8 / 15

What are the main terms of credit?

Interest rate, mode of repayment, and time period

Interest rate, collateral, and documentation requirement

Collateral, documentation requirement, and mode of repayment

Interest rate, collateral, documentation requirement, mode of repayment, and time period

9 / 15

In SHGs most of the decisions regarding savings and loan activities are taken by _____.

LIC

Bank

Members

Government organization

10 / 15

Credit (loan) refers to an agreement in which the lender supplies the borrower with money, goods, or services in return for the promise of _____.

Payment made

Collateral

Future payment

No payment

11 / 15

How do SHGs help borrowers overcome the problem of lack of collateral?

Also See: CBSE Class 10 Science 2024-25 Official Sample Paper: Detailed Solutions with NCERT Book References

By requiring collateral from borrowers.

By guaranteeing loan repayment through group pressure.

By using the group's savings as collateral.

By providing loans at a higher rate of interest.

12 / 15

What is the main difference between formal and informal sources of credit?

Formal sources charge a higher rate of interest, while informal sources charge a lower rate of interest.

Formal sources require collateral, while informal sources do not require collateral.

Formal sources provide loans only to large-scale industries, while informal sources provide loans to small-scale industries and rural households.

Formal sources are supervised by the RBI, while informal sources are not supervised by any organization.

13 / 15

Find the Incorrect option

Demand deposits are a safe way of money transformation

With demand deposit payments can be made without cash

Demand deposit share the essential features of money

Demand deposit facility is like a cheque

14 / 15

Rohan has taken a loan of Rs.5 lakhs from the bank to purchase a house at a 12% rate of interest. He has to submit papers about the new house and salary records to the bank. What is this process called?

Collateral

Interest Rate

Installments

Principal Amount

15 / 15

Most agricultural laborers like Mohan depend upon loans from the informal sector. Which of the following statements about this sector is correct –

Cost of informal loans to the borrower is quite high

There is govt. bodies to supervise the informal sector

Money lenders ask for a reasonable rate of interest

Money lenders use fair means to get their money back

Your score is

The average score is 69%

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1	NEILNEEGRO	100 %	52 seconds	15
2	aaradhana	100 %	54 seconds	15
3	..	100 %	59 seconds	15
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Also See: Federalism Class 10 Most Important Questions and Answers

Key Topics Covered in the Quiz

✔ Functions of Money
✔ Types of Credit – Formal & Informal
✔ Role of Banks & Self Help Groups (SHGs)
✔ Impact of Credit on Borrowers
✔ Collateral and Terms of Credit

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Money and Credit Class 10 MCQ Quiz – Test Your Knowledge

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About the Quiz

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