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

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

No payment

Collateral

Future payment

2 / 15

What are the main terms of credit?

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

Interest rate, collateral, and documentation requirement

Collateral, documentation requirement, and mode of repayment

Interest rate, mode of repayment, and time period

3 / 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.

Deposit criteria

Mode of re-payment

Interest on loan

Terms of credit

4 / 15

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

Increased financial flexibility and convenience

Limited access to funds for starting businesses or making investments

Increased capacity of savings

Increased access to funds for starting businesses

5 / 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

6 / 15

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

Government organization

Members

LIC

Bank

7 / 15

What is the primary function of money?

Credit creation

All of the above

Standard of deferred payments

Medium of exchange

8 / 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?

Installments

Collateral

Principal Amount

Interest Rate

9 / 15

Which one of the following options describes ‘Collateral’?

Double coincidence of wants

Asset as a guarantee for a loan

Trade in barter

Certain products for barter

10 / 15

Mohan is an agricultural laborer. There are several months in a year when he has no work and needs credit to meet his daily expenses. He depends upon his employer, the landowner for credit who charges an interest rate of 5 percent per month. Mohan repays the money by working physically for the landowner on his farmland. Over the years his debt will –

Reduce - as the amount equivalent to his salary is being counted as monthly repayment

Remain constant - as he is working for the employer but is repaying less

Be totally repaid - as he is repaying the debt in the form of physical labor

Increase - because of increasing interest and non-payment of the monthly amount

11 / 15

Also See: Nelson Mandela: Long Walk to Freedom: Class 10 Q&A

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.

12 / 15

Find the Incorrect option

Demand deposits are a safe way of money transformation

Demand deposit facility is like a cheque

Demand deposit share the essential features of money

With demand deposit payments can be made without cash

13 / 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

Double incidence of wants

Barter system of wants

None of the above

14 / 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?

village moneylender

rich landowner

commercial bank

cooperative society

15 / 15

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

By guaranteeing loan repayment through group pressure.

By requiring collateral from borrowers.

By using the group's savings as collateral.

By providing loans at a higher rate of interest.

Your score is

The average score is 70%

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Also See: The Necklace Class 10 Important Questions Answered

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

About the Quiz

Why Take This Quiz?

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Key Topics Covered in the Quiz

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About the Quiz

Why Take This Quiz?

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