Class 10th - Money and Credit - Exam Pack - Most Important Questions

Exam Pack
 Class 10th - Money and Credit - Exam Pack - Most Important Questions

Very Short Answer Type Questions

A situation where the both parties have agreed

1. Double Coincidence of wants
to sell and buy each other’s commodities.

Money acts as an intermediate in the exchange

2. Money as a medium of exchange process where it facilitates the transaction to
take place.
 Class 10th - Money and Credit - Exam Pack - Most Important Questions

A system of exchange where the goods are

3. Barter Exchange being exchanged against the goods. It depends
on double coincidence of wants.

The amount deposited with the bank which the

4. Demand Deposits depositor can withdraw on his/her demand is
known as demand deposits.
 Class 10th - Money and Credit - Exam Pack - Most Important Questions

Cheque is basically a paper instructing the bank to pay a

specific amount from the person’s account to that person
5. Cheque
in whose name the cheque has been issued. Payments can
be made with the use of cheque instead of cash.

Collateral is an asset that the borrower owns and uses this

as a guarantee to a lender until the loan is repaid. If the
6. Collateral
borrower fails to repay the loan, the lender has the right to
sell the asset or collateral to obtain payment.
 Class 10th - Money and Credit - Exam Pack - Most Important Questions

It is a set of conditions under which a loan is given. It may

include rate of interest, duration of credit and other
7. Terms of credit
related conditions like, collateral, documentation
requirement and the mode of repayment.

Self help groups are small groups of 15 - 20 members who

8. Self help group come together to pool their savings and can use this fund
for themselves.
Class 10th - Money and Credit - Exam Pack - Most Important Questions

Short Answer Type Questions

How money acts as a medium of exchange?

● In the early days Barter exchange

● Economy where money is used, it acts as an intermediate in exchange.

● Example
Class 10th - Money and Credit - Exam Pack - Most Important Questions

Explain the loan activity of banks?

● Depositors depositing their saving with bank. [Interest Paid]

● Borrowers borrowing from bank. [Interest Changed]

● The difference is the earning of the bank.

 Class 10th - Money and Credit - Exam Pack - Most Important Questions

Explain any three reasons how credit helps in the development of the borrower?

● Credit is required to start any work.

● Proper utilisation can give better results.

● Example of Salim.
 Class 10th - Money and Credit - Exam Pack - Most Important Questions

Examine any three situations in which credit pushes the borrower into a debt trap?

● Credit and risk involved in it.

● Debt trap

● Example of Swapna
 Class 10th - Money and Credit - Exam Pack - Most Important Questions

Compare and contrast the role of formal and informal source of credit.

Formal Source Informal Source

● Source ● Source
● Interest rate low ● High interest rate
● Documentation and collateral ● No documentation and collateral required
 Class 10th - Money and Credit - Exam Pack - Most Important Questions

Explain any three reasons for the banks and cooperative societies to increase their
lending facilities in rural areas.

● Inclusion of power section into formal source.

● Freedom from higher interest rate.

● People can borrow cheaply.

Class 10th - Money and Credit - Exam Pack - Most Important Questions

Long Answer Type Questions

What are the modern forms of money? Why rupee is widely accepted as a
medium of exchange?

● Currency (2)

● Deposits with banks (2)

● Authorised by government authority

Class 10th - Money and Credit - Exam Pack - Most Important Questions

What do you understand by terms of credit? Explain.

➔ Interest rate, collateral and documentation requirement, and the mode of

repayment together comprise what is called the terms of credit.

● Explain each point

 Class 10th - Money and Credit - Exam Pack - Most Important Questions

Documentation Mode of
Interest Rate Collateral
requirement Payment

Borrower must pay to Collateral is an asset that Paperwork Installment/

the lender along with the borrower owns (such Lump Sum Cash/
the repayment of the as land, building, vehicle, Gold/ Property
principal. livestocks, deposits with
banks) and uses this as a
guarantee to a lender
until the loan is repaid.
Class 10th - Money and Credit - Exam Pack - Most Important Questions

“Credit is very essential in economy”. What are the different credit

arrangements for different categories of borrowers?

● Loan from Moneylenders.

● Loan from Traders.

● Loan from Banks.

● Loan from Employers.

● Loan from Cooperatives.

Class 10th - Money and Credit - Exam Pack - Most Important Questions

Which government body supervises the functioning of formal sources of

loans in India? Explain its functioning.

➔ Reserve Bank of India ( RBI)

● Monitors the bank
● Ensures that loan is given to all
● Decides the rate of interest
● Periodically banks have to submit information to RBI
Class 10th - Money and Credit - Exam Pack - Most Important Questions

What do you understand by SHGs? Explain their functioning and

contribution in eradication of poverty.

➔ Self help groups are small groups of 15 - 20 members who come together
to pool their savings and can use this fund for themselves.
● Availability of loans at low interest rates.
● No collateral required
● Empowerment of the member ( women)
● Building block of rural poor