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

In India, who issues the currency notes on behalf of the central government?

None

State Bank of India

Reserve Bank of India

Finance Minister of India

2 / 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

3 / 15

Why is modern currency accepted as a medium of exchange?

Because it is authorized by the government

Because it is used by all countries

Because it is backed by gold reserves

Because it is accepted by international organizations

4 / 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 use fair means to get their money back

Money lenders ask for a reasonable rate of interest

5 / 15

Find the Incorrect option

With demand deposit payments can be made without cash

Demand deposit share the essential features of money

Demand deposits are a safe way of money transformation

Demand deposit facility is like a cheque

6 / 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 _____.

Collateral

Payment made

No payment

Future payment

7 / 15

Rehman is a poor agricultural labor and needs a loan for cultivation on his small piece of land.

Which of the following would DEFINITELY offer him a fair interest rate and flexible terms of credit?

cooperative society

rich landowner

commercial bank

village moneylender

8 / 15

What are the two forms of modern currency?

Paper notes and mobile wallets

Paper notes and coins

Coins and credit cards

Gold and silver

9 / 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?

Principal Amount

Collateral

Interest Rate

Installments

10 / 15

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

By providing loans at a higher rate of interest.

By guaranteeing loan repayment through group pressure.

By requiring collateral from borrowers.

By using the group's savings as collateral.

11 / 15

What is a "debt trap"?

Also See: Resources and Development Class 10 Simplified Notes for Revision

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

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

12 / 15

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

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

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

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

What is a potential negative economic implication of an economy without the concept of credit?

Increased financial flexibility and convenience

Increased access to funds for starting businesses

Increased capacity of savings

Limited access to funds for starting businesses or making investments

14 / 15

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

LIC

Members

Government organization

Bank

15 / 15

Which one of the following options describes ‘Collateral’?

Double coincidence of wants

Certain products for barter

Trade in barter

Asset as a guarantee for a loan

Your score is

The average score is 64%

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Pos.	Name	Score	Duration	Points
1	Whoo	100 %	37 seconds	15
2	Pradeep TIS B5	100 %	37 seconds	15
3	Huma	100 %	37 seconds	15
4	Bhavika	100 %	41 seconds	15
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Also See: Outcomes of Democracy: Class 10 Notes Simplified

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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