CBSE Class 10 Social Science Important Questions: In this article, we would be going through some of the most important multiple choice questions and assertion reason questions from the 3rd chapter of CBSE Class 10 SST Economics syllabus.
Money and Credit is the third chapter of the 4th unit of CBSE Class 10 Social Science (Economics) curriculum. Money and Credit chapter covers the fascinating subject of money – history of money and how various forms were used at different times, allowing students to realise the social situation in which these forms were used. The topic mentioned in the syllabus under the chapter are as follows:
- Money as a medium of exchange
- Modern forms of Money
- Loan activities of Banks
- Two different Credit situations
- Terms of Credit
- Formal Sector Credit in India
- Self Help Groups for the Poor
To view the complete syllabus of CBSE Class 10 Social Science Economics Chapter three, visit CBSE Class 10 Social Science Syllabus 2022-2023.
ALSO CHECK: CBSE Class 10 Social Science DELETED Syllabus 2022-2023
All the important questions have been prepared by subject experts after careful analysis of the latest NCERT Economics textbook ‘Understanding Economic Development ’, the latest syllabus, sample paper and marking scheme for 2022-23 and the previous year question papers. Although currently we have provided only the multiple choice questions and assertion reason questions, we will be adding other types of questions soon.
CBSE Class 10 Social Science Economics Chapter 3 Important Questions
MULTIPLE CHOICE QUESTIONS
- Which one of the following is a formal source of credit?
- Traders
- Cooperative societies
- Moneylenders
- Friends and relatives
2. 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.
3. Which one of the following is the appropriate meaning of collateral?
- It is the sum total of money borrowed from banks.
- The amount borrowed from friends.
- It is an asset of the borrower used as guarantee to a lender.
- The amount invested in a business.
4. 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
5. Which one of the following is the newer way of providing loans to the rural poor, particularly women?
- Cooperative Banks
- Grameen Banks
- Self-Help Groups
- Moneylenders
6. Banks use the major portion of the deposit to:
(a) Keep reserve so that people may withdraw
(b) Meet their routine expenses
(c) Extend loans
(d) Meet renovation of the bank
7. Double coincidence of wants means ____________.
- What a person desires to sell is exactly what the other person wishes to buy.
- What a person desires to sell is exactly what the other person also wishes to sell.
- What a person desires to buy is exactly what the other person also wishes to buy.
- None of the above.
8. Which one of the following is not included in the terms of credit?
(a) Rate of Interest
(b) Mode of payment
(c) Rate of saving
(d) Collateral
9. Banks use the major portion of the deposits to
- Extend loans
- Invest in infrastructure
- Deposit in foreign banks
- None of the above
10. A person can withdraw money from a bank by issuing a cheque. What is a cheque?
(a) Loan taken by the bank.
(b) Loan taken by the depositor from the bank.
(c) Paper instructing the bank to pay a specific amount.
(d) Paper valid to withdraw money
11. Which of the following statements are correct?
- Members of a cooperative pool their resources for cooperation in certain areas.
- Besides banks, the other major source of cheap credit in rural areas is the cooperative societies.
- There are several types of cooperatives possible such as farmers’ cooperatives, weavers cooperatives, industrial workers cooperatives.
- All of the above statements are true.
12. All the banks act as mediator between————- and ———-.
- rural people, urban people
- literates, illiterates
- people, government
- depositors, borrowers
13. Which of the following statements is false
- There is no organisation which supervises the credit activities of lenders in the informal sector.
- RBI stops the money lenders from using unfair means to get their money back.
- Compared to the formal lenders, most of the informal lenders charges much lesser interest on loans
- All of the above
14. Organised credit is also called
- informal credit
- formal credit
- cooperative credit
- none of these
15. Name the system in which the double coincidence of wants is an essential feature.
- Barter system
- Money economy
- Global economy
- None of these
16. Match the following with the appropriate reason people might borrow money for:
a) Auto rickshaw driver I) To buy a house
b) A businessman whose factory has been closed ii) To buy a new shop for him
c) Small trader iii) To revive his business
d) Govt. servant iv) To buy a new vehicle.
17. Which of the following could lead to a debt trap?
- The high interest rate for borrowing can mean that the amount to be repaid is greater than the income of the borrower.
- Higher cost of borrowing means a larger part of the earnings of the borrowers is used to repay the loan.
- The high interest rate for borrowing can mean that the amount to be repaid is lesser than the income of the borrower.
- both (a) and (b)
18. The modern currency is without any use of its own, then why is it accepted as a medium of exchange?
- Because it is convenient
- It has digital and manual system
- It can be used in foreign exchange
- Is authorized by the government of the country
19. Since money acts as an intermediate in the exchange process, it is called
- Medium of trade
- Medium of Exchange
- Medium of Business
- Medium of transaction
20. People also have the provision to withdraw the money as and when they require the deposits in the bank accounts to be withdrawn, what are these deposits called?
- Fixed deposits
- Savings
- Demand deposits
- Demand drafts
21. Madhurim wants to withdraw Rs 20,000 in cash for making payments to Prem after Prem receives the
money, he deposits it in his own account? What is the result?
- Salim’s balance in his bank account increases and Prem’s balance increases.
- Salim’s balance in his bank account decreases and Prem’s balance increases.
- Salim’s balance in his bank account increases and Prem’s balance decreases
- None of the above
22. The facility of cheques against demand deposits makes it possible to directly settle payments without the use of………
- Deposit slip
- Cash
- Moneylender
- Other funds
23 ………….refers to an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment.
- Debit
- Cash transaction
- Credit
- Trade
ASSERTION REASON QUESTIONS
DIRECTION : Mark the option which is most suitable :
(a) If both assertion and reason are true, and reason is the correct explanation of assertion.
(b) If both assertion and reason are true, but reason is not the correct explanation of assertion.
(c) If assertion is true, but reason is false.
(d) If both assertion and reason are false.
- Assertion: In India, no individual can refuse to accept a payment made in rupees.
Reason: Rupee is the legal tender in India.
- Assertion: The facility of demand deposits makes it possible to settle payments without the use of cash.
Reason: Demand deposits are paper orders which make it possible to transfer money from one person’s account to another person’s account.
- Assertion: In India, no individual can refuse to accept payment made in rupees.
ReasoN: Rupee is the legal tender in India
- Assertion: Banks keep only a small proportion of their deposits as cash with themselves.
Reason: Banks in India these days hold about 15 per cent of their deposits as cash.
5 Assertion: The modern currency is used as a medium of exchange; however, it does not have a use of its own.
Reason: Modern currency is easy to carry
- Assertion: Banks charge a higher interest rate on loans than what they offer on deposits.
Reason: The difference between what is charged from borrowers and what is paid to depositors is their main source of income.
- Assertion: Banks charge a higher interest rate on loans than what they offer on deposits.
Reason: The difference between what is charged from borrowers and what is paid to depositors is their main source of income.
- Assertion: Rohan took credit in the form of advance payment from a buyer and he delivered the goods to the buyer on time and also earned profit. The credit made Rohan better off in this situation.
Reason: Credit can never push a person into a debt trap.
9, Assertion: Credit would be useful or not depending on the risk involved in a situation.
Reason: The chance of benefiting from credit is highest in the agriculture sector.
- Assertion: Credit would be useful or not depends on the risk involved in a situation.
Reason: The chance of benefiting from credit is highest in the agriculture sector.
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