Money and Credit (Quiz) - Social Science

Welcome to your Money and Credit (Quiz)

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

It provides loans directly to borrowers.

It monitors informal lenders.

It supervises the functioning of formal lenders like banks.

It eliminates the need for loans.

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

A method of saving money

A scenario that leads to improved financial status

A situation where a borrower successfully repays loans

A situation where credit leads to further debt and financial distress

What is a common requirement specified in loan agreements?

High collateral value

Both B and C

Interest rate

Fixed repayment period

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 allows for easier exchanges between diverse parties

It increases the complexity of exchanges

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

25%

15%

20%

10%

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

To record financial transactions

To make a payment from the bank account

To withdraw cash

To serve as currency

Why do informal lenders typically charge higher interest rates?

They are unregulated and can set rates as they choose.

They are more efficient than banks.

They offer loans without any collateral.

They have lower operating costs.

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

Marketing strategies

Government policies

Only financial issues

Health, nutrition, and domestic violence

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

The group dissolves immediately.

The member gets a longer repayment period.

Other members will follow up seriously on the repayment.

The loan is forgiven by the bank.

10.

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

To buy livestock

To cover expenses on seeds, fertilizers, and equipment

To pay off old debts

To invest in stocks

11.

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

Informal lenders offer lower interest rates.

Banks require collateral, which they often lack.

They have easier access to formal banks.

They prefer the informal lending process.

12.

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

A type of currency with intrinsic value

A method of saving money

Anything that is accepted in exchange for goods and services

An item used only for trading

13.

What do banks primarily do with the deposits they accept?

Extend loans to borrowers

Store them safely

Distribute among depositors

Invest in stock markets

14.

What does collateral refer to in the context of borrowing?

An asset used as security against a loan

A type of loan agreement

The amount of money borrowed

A personal guarantee

15.

What does 'double coincidence of wants' refer to?

The simultaneous exchange of money and goods

The need for two parties to agree on a price

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

The use of two currencies in transactions

16.

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

33%

50%

17%

84%

17.

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

The group can collectively decide on loan terms and repayment.

Members are not accountable to each other for repayments.

Loans are granted without any conditions.

Loans are provided without any interest.

18.

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

Traders

Friends and relatives

Moneylenders

Banks and cooperatives

19.

What is the main source of income for banks?

Government grants

Interest on deposits

Transaction fees

Difference between interest charged on loans and interest paid on deposits

20.

Who issues currency notes in India?

The Reserve Bank of India

State Bank of India

International monetary organizations

Central Bank of India

21.

Which of the following is NOT a modern form of money

Paper notes

Grains

Coins

Demand deposits

22.

Why is modern currency accepted as a medium of exchange?

Because it is authorized by the government

Because it has intrinsic value

Because it is a commonly used commodity

Because it is made of precious metals

23.

What is a Self-Help Group (SHG)?

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

A government initiative to provide loans to the rich.

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

An informal lending group with no structure.

24.

What characterizes demand deposits?

They can be withdrawn on demand

They are not accepted as a medium of exchange

They cannot be withdrawn

They earn interest only when not used

25.

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 allow informal lenders to charge less.

To reduce the dependence on informal sources of credit.

3 thoughts 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.
  Reply
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!
  Reply

3 thoughts on “Money and Credit (Quiz)”

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