AP 10th Class Social Economics Bits 3rd Lesson Money and Credit
Select and write the most appropriate option :
Question 1.
Which of the following statements about money is incorrect?
A) Money is used to easily exchange for goods and services.
B) Everyone prefers to receive payments in money.
C) Money is not linked td the banking system.
D) Money has a long history and comes in different forms.
Answer:
D) Money has a long history and comes in different forms.
Question 2.
Which of the following statements about credit is incorrect?
A) Credit is important in economic life.
B) Credit is needed in transactions.
C) Credit should only be available to the rich.
D) Credit comes with certain risks.
Answer:
C) Credit should only be available to the rich.
Question 3.
Which of the following is not a factor determining the terms of credit?
A) Interest rates
B) Collateral
C) Documentation requirements
D) Type of product or service being purchased
Answer:
C) Documentation requirements
Question 4.
Which of the following is not a purpose for which people might need loans?
A) Purchase of agricultural implements
B) Construction of houses
C) Medical expenses
D) Savings and loan activities
Answer:
D) Savings and loan activities
Question 5.
Which of the following statements Is true about the history of money?
A) Money has always taken the form of coins and banknotes.
B) Money has evolved over time and can now exist ¡n digital forms.
C) Money was invented recently to facilitate economic transactions.
D) Money has never been linked to the banking system.
Answer:
B) Money has evolved over time and can now exist ¡n digital forms.
Question 6.
What is the role of the Reserve Bank of India In supervising banks?
A) It ensures that banks have enough money to lend.
B) It sets the Interest rates for loans.
C) It monitors the functioning of banks.
D) it decides who can borrow from banks.
Answer:
D) it decides who can borrow from banks.
Question 7.
VhIch of the following statements about is incorrect?
A) Money can be easily exchanged for goods and services.
B) Everyon prefers to receive payments In money.
C) Money has no value and cannot be used for transactions.
D) Money is linked to the banking system.
Answer:
B) Everyon prefers to receive payments In money.
Question 8.
what is the purpose of Collateral in lending?
A) To lower interest rates (or borrowers
B) To provide security for the lender In case of default
C) To increase the credit limit for borrowers
D) To reduce the documentation requirements for borrowers
Answer:
C) To increase the credit limit for borrowers
Question 9.
WhIch of the following pairs is incorrect?
A) Money – easIly exchangeable for goods and services
B) Credit – importance in economic life
C) Collateral – an asset used as a guarantee until loan is repaid
D) Interest rate – not determines the mode of loan repayment
Answer:
D) Interest rate – not determines the mode of loan repayment
Question 10.
WhIch of the following pairs Is incorrect?
A) Banks – major source of cheap credit in rural areas
B) Cooperative societies – provIde loans based on deposits from members
C) Money – preferred form of payment in exchange for goods and services
D) Credit – only available to wealthy individuals
Answer:
D) Credit – only available to wealthy individuals
Question 11.
Which of the following pairs is incorrect?
A) Money – used to exchange for commodities and services
B) Formal sources of credit – include banks and cooperatives
C) Interest rate- determines the cost of borrowing
D) Collateral- an asset that the borrower owns and uses as a guarantee
Answer:
B) Formal sources of credit – include banks and cooperatives
Question 12.
Which of the following pairs is incorrect?
A) Money – preferred form of payment for goods and services
B) Credit – important for economic development
C) Interest rate – determines the terms of credit
D) Formal sources of credit – include moneylenders and relatives
Answer:
D) Formal sources of credit – include moneylenders and relatives
Question 13.
Which pf the following pairs is incorrect?
A) Money – easily exchangeable for commodities and services
B) Credit – involves the concept of debt
C) Collateral – an asset used as a guarantee for loans
D) Interest rate – not determines the repayment period of a loan
Answer:
D) Interest rate – not determines the repayment period of a loan
Question 14.
Which statement describes the correct sequence of events in the history of money?
A) Barter system, gold and silver coins, paper money, digital currency
B) Barter system, paper money, gold and silver coins, digital currency
C) Digital currency, paper money, gold and silver coins, barter system
D) Gold and silver coins, barter system, paper money, digital currency
Answer:
A) Barter system, gold and silver coins, paper money, digital currency
Question 15.
What are the various uses of credit in Sonpur?
A) Loans for agricultural implements, loans for construction of houses, loans for household expenses
B) Loans for cultivation and agricultural trade, loans for machinery, loans for medical expenses
C) Loans for business expansion, loans for education fees, loans for travel expenses
D) Loans for purchasing luxury items, loans for gambling, loans for entertainment expenses
Answer:
A) Loans for agricultural implements, loans for construction of houses, loans for household expenses
Question 16.
Match the terms to their definitions:
| 1) Paperwork and documents required for loan approval | a) Collateral |
| 2) An asset used as a guarantee until the loan is repaid | b) Interest rate |
| 3) A fee charged for borrowing money | c) Documentation |
A) a – 2, b – 3, c – 1
B) a – 1, b – 2, c – 3
C) a – 3, b – 2, c – 1
D) a – 3, b – 1, c – 2
Answer:
A) a – 2, b – 3, c – 1
| a) Collateral | 2) An asset used as a guarantee until the loan is repaid |
| b) Interest rate | 3) A fee charged for borrowing money |
| c) Documentation | 1) Paperwork and documents required for loan approval |
Question 17.
Assertion : Credit is an important component of economic life.
Reason : Credit enables individuals to make transactions without using physical money.
A) Both the assertion and the reason are correct, and the reason explains the assertion.
B) Both the assertion and the reason are correct, but the reason does not explain the assertion.
C) The assertion is correct, but the reason is incorrect.
D)The assertion is incorrect, but the reason is correct.
Answer:
A) Both the assertion and the reason are correct, and the reason explains the assertion.
Question 18.
Assertion : Collateral is required by lenders as a guarantee for loans.
Reason : Collateral serves as an assurance that the borrower will repay the
A) Both the assertion and the reason are correct, and the reason explains the assertion.
B) Both the assertion and the reason are correct, but the reason does not explain the assertion.
C) The assertion is correct, but the reason is incorrect.
D) The assertion is incorrect, but the reason is correct.
Answer:
A) Both the assertion and the reason are correct, and the reason explains the assertion.
Question 19.
Assertion : Informal lenders charge higher interest rates compared to formal sources of credit.
Reason : Informal lenders do not have strict regulations and can set their own interest rates.
A) Both the assertion and the reason are correct, and the reason explains the assertion.
B) Both the assertion and the reason are correct, but the reason does not explain the assertion.
C) The assertion is correct, but the reason is incorrect.
D) The assertion is incorrect, but the reason is correct.
Answer:
A) Both the assertion and the reason are correct, and the reason explains the assertion.
Question 20.
Assertion : Cooperative societies can provide cheap credit to their members.
Reason : Cooperative societies pool resources and obtain loans from banks as collateral.
A) Both the assertion and the reason are correct, and the reason explains the assertion.
B) Both the assertion and the reason are correct, but the reason does not explain the assertion.
C) The assertion is correct, but the reason is incorrect.
D) The assertion is incorrect, but the reason is correct.
Answer:
A) Both the assertion and the reason are correct, and the reason explains the assertion.