Money and Credit (Quiz) - Social Science

Welcome to your Money and Credit (Quiz)

What does collateral refer to in the context of borrowing?

The amount of money borrowed

An asset used as security against a loan

A personal guarantee

A type of loan agreement

None

What is the function of a cheque in the banking system?

To serve as currency

To withdraw cash

To make a payment from the bank account

To record financial transactions

None

Which of the following statements reflects a significant advantage of using money in transactions?

It reduces the need for a mutual agreement on goods

It creates more barriers in trading

It increases the complexity of exchanges

It allows for easier exchanges between diverse parties

None

Which of the following best describes 'medium of exchange'?

A type of currency with intrinsic value

A method of saving money

An item used only for trading

Anything that is accepted in exchange for goods and services

None

What percentage of loans do poor households in urban areas typically take from informal sources?

84%

33%

50%

17%

None

What is a common requirement specified in loan agreements?

High collateral value

Interest rate

Fixed repayment period

Both B and C

None

Why do farmers usually take crop loans at the beginning of the season?

To invest in stocks

To cover expenses on seeds, fertilizers, and equipment

To pay off old debts

To buy livestock

None

What role does the Reserve Bank of India (RBI) play in the lending process?

It monitors informal lenders.

It supervises the functioning of formal lenders like banks.

It provides loans directly to borrowers.

It eliminates the need for loans.

None

Which of the following is NOT a modern form of money

Grains

Demand deposits

Paper notes

Coins

None

10.

Who issues currency notes in India?

International monetary organizations

Central Bank of India

State Bank of India

The Reserve Bank of India

None

11.

What can happen if a member fails to repay a loan within an SHG?

The loan is forgiven by the bank.

The member gets a longer repayment period.

Other members will follow up seriously on the repayment.

The group dissolves immediately.

None

12.

Which of the following is considered a formal source of credit?

Friends and relatives

Moneylenders

Traders

Banks and cooperatives

None

13.

What does the term "debt-trap" refer to in Swapna's situation?

A method of saving money

A situation where credit leads to further debt and financial distress

A scenario that leads to improved financial status

A situation where a borrower successfully repays loans

None

14.

Why is it important for banks and cooperatives to lend more to rural areas?

To limit the number of loans given to the poor.

To increase their profit margins.

To reduce the dependence on informal sources of credit.

To allow informal lenders to charge less.

None

15.

What is the main source of income for banks?

Interest on deposits

Government grants

Difference between interest charged on loans and interest paid on deposits

Transaction fees

None

16.

What characterizes demand deposits?

They earn interest only when not used

They can be withdrawn on demand

They are not accepted as a medium of exchange

They cannot be withdrawn

None

17.

What does 'double coincidence of wants' refer to?

The need for two parties to agree on a price

The requirement that both parties must want what the other is offering

The simultaneous exchange of money and goods

The use of two currencies in transactions

None

18.

What do banks primarily do with the deposits they accept?

Store them safely

Distribute among depositors

Extend loans to borrowers

Invest in stock markets

None

19.

How does the group benefit when members take loans from an SHG?

The group can collectively decide on loan terms and repayment.

Loans are granted without any conditions.

Loans are provided without any interest.

Members are not accountable to each other for repayments.

None

20.

What is a Self-Help Group (SHG)?

An informal lending group with no structure.

A government initiative to provide loans to the rich.

A bank that offers low-interest loans to poor families.

A group of individuals who pool savings to provide loans to members.

None

21.

What social issues can be addressed during the regular meetings of SHGs?

Marketing strategies

Only financial issues

Health, nutrition, and domestic violence

Government policies

None

22.

What percentage of their deposits do banks in India typically keep as cash?

15%

10%

20%

25%

None

23.

Why do poorer households often depend on informal sources for credit?

They have easier access to formal banks.

Banks require collateral, which they often lack.

Informal lenders offer lower interest rates.

They prefer the informal lending process.

None

24.

Why is modern currency accepted as a medium of exchange?

Because it is a commonly used commodity

Because it is authorized by the government

Because it has intrinsic value

Because it is made of precious metals

None

25.

Why do informal lenders typically charge higher interest rates?

They offer loans without any collateral.

They are more efficient than banks.

They are unregulated and can set rates as they choose.

They have lower operating costs.

None

Time's up

3 thought on “Money and Credit (Quiz)”

Maanya Reddy Boddu says:
November 7, 2024 at 6:55 am
I did a quiz on money and credit can u pls say all the answers in the above quiz
Reply
1. Preeti says:
  November 7, 2024 at 1:17 pm
  Good Evening, Maanya. Quiz has automatic feature of telling answers after completing all the quiz questions.
2. Preeti says:
  November 7, 2024 at 1:32 pm
  Once you complete the quiz questions, all the correct answers will automatically appear on the screen. Give it a try and feel free to reach out if you have any other queries. Thank you!

3 thought on “Money and Credit (Quiz)”

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