Money and Credit Class 10 MCQ Quiz – Test Your Knowledge

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

Find the Incorrect option

What are the main terms of credit?

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

What is a "debt trap"?

What are the two forms of modern currency?

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

What is the primary function of money?

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 –

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.

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

How do banks earn income from deposits?

Why is modern currency accepted as a medium of exchange?

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

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