Class 10 Social Science (Economics)

1. What is the system called where goods are directly exchanged for other goods without using money?

• A. Barter System
• B. Credit System
• C. Monetary System
• D. Banking System

2. What essential condition must be met for a barter system transaction to occur successfully?

• A. Double coincidence of wants
• B. High liquidity
• C. Availability of paper currency
• D. Government regulation

3. Why is money accepted as a medium of exchange in modern economies?

• A. It is authorized by the country's government
• B. It is made of precious metals like gold and silver
• C. It can be easily manufactured by anyone
• D. It has intrinsic value equal to its face value

4. Which authority issues currency notes in India on behalf of the Central Government?

• A. Reserve Bank of India (RBI)
• B. State Bank of India (SBI)
• C. Ministry of Finance
• D. NITI Aayog

5. What are bank deposits that can be withdrawn by depositors on demand called?

• A. Demand Deposits
• B. Fixed Deposits
• C. Recurring Deposits
• D. Term Deposits

6. What paper instrument instructs a bank to pay a specific amount from a person's account to another person?

• A. Cheque
• B. Promissory Note
• C. Bond
• D. Collateral Paper

7. Approximately what percentage of their total cash deposits do commercial banks in India keep as cash reserves for daily withdrawals?

• A. 15%
• B. 50%
• C. 75%
• D. 100%

8. How do commercial banks earn their main source of income?

• A. By charging higher interest rates on loans than what they pay on deposits
• B. By charging high entrance fees for opening accounts
• C. From direct grants provided by the central government
• D. By charging transaction fees for issuing paper cheques

9. What is an asset that a borrower owns and pledges as a guarantee to a lender until a loan is fully repaid?

• A. Collateral
• B. Principal
• C. Dividend
• D. Credit Guarantee

10. Interest rate, collateral, documentation requirements, and the mode of repayment together constitute what?

• A. Terms of Credit
• B. Terms of Trade
• C. Monetary Policy Terms
• D. Banking Norms

11. Which of the following is an example of a formal source of credit in India?

• A. Commercial Banks and Cooperatives
• B. Moneylenders and Traders
• C. Friends and Relatives
• D. Landlords

12. Which regulatory institution supervises the functioning and lending activities of formal credit sources in India?

• A. Reserve Bank of India (RBI)
• B. Ministry of Finance
• C. Securities and Exchange Board of India (SEBI)
• D. State Governments

13. Which group relies predominantly on informal sources of credit in India?

• A. Poor rural households
• B. Large industrial corporations
• C. Well-off urban households
• D. Government contractors

14. What risk occurs when credit pushes a borrower into a situation where repayment is impossible, forcing them to sell assets or borrow further?

• A. Debt Trap
• B. Liquidity Crunch
• C. Credit Default Swap
• D. Asset Depreciation

15. What is the typical number of members in a standard Self-Help Group (SHG)?

• A. 15 to 20 members
• B. 50 to 100 members
• C. 2 to 5 members
• D. 200 to 500 members

16. Who founded the Grameen Bank of Bangladesh, which pioneered micro-credit for the poor?

• A. Muhammad Yunus
• B. Amartya Sen
• C. Mahbub ul Haq
• D. Abhijit Banerjee

17. Why do informal lenders charge extremely high interest rates compared to formal banks?

• A. There is no supervising body to control their lending practices
• B. They are mandated by law to collect high rates
• C. They face heavy corporate taxation from state governments
• D. Their operational expenses are supervised by RBI

18. Which modern forms of money have replaced historical currency mediums like grain, cattle, and metal coins?

• A. Currency notes and coins
• B. Commodities and bartered livestock
• C. Gold and silver bullion standard
• D. Agricultural produce vouchers

19. Why do informal moneylenders grant loans to poor borrowers without demanding collateral?

• A. They personally know the borrowers and can enforce repayment through social pressure
• B. They are mandated by government welfare schemes
• C. They collect zero interest from poor families
• D. The RBI guarantees insurance for their unpaid loans

20. What is a major advantage of Self-Help Groups (SHGs) for rural poor women?

• A. They help borrowers overcome the lack of collateral assets
• B. They provide free housing to members
• C. They guarantee lifelong employment in government posts
• D. They grant interest-free international loans

21. Modern currency notes differ from historical commodity money because modern paper notes:

• A. Have no intrinsic value of their own as a commodity
• B. Are made from pure silver sheets
• C. Can be consumed as food during emergencies
• D. Possess intrinsic value equal to their printed denomination

22. Which of the following is an informal source of credit?

• A. Agricultural Trader
• B. State Cooperative Bank
• C. Regional Rural Bank
• D. Urban Commercial Bank

23. What role does the Reserve Bank of India play regarding bank loan distribution?

• A. It ensures banks extend credit to small cultivators, small industries, and priority sectors, not just profit-making businesses
• B. It mandates that banks keep 100% of deposits in cash reserves
• C. It sets prices for consumer goods in retail markets
• D. It fixes salary structures for private corporate employees

24. What primary advantage do formal loans offer compared to informal credit?

• A. Lower interest rates and transparent, fair repayment terms
• B. No requirement for identity proof or documentation
• C. Total immunity from loan repayment if crops fail
• D. Unrestricted instant cash delivery without application evaluation

25. Why do rich urban households receive a higher share of formal credit than poor rural households?

• A. They possess necessary collateral documents and have better banking access
• B. Poor rural families are legally banned from opening bank accounts
• C. Formal banks are forbidden from opening rural branches
• D. Rich urban households pay zero interest on loans

26. In credit transactions, what does the term 'principal' represent?

• A. The original amount of money borrowed
• B. The extra interest amount charged by the lender
• C. The fee paid for banking processing
• D. The value of property pledged as security

27. Which organization provides cheap loans to member farmers for purchasing seeds, fertilizers, and agricultural implements?

• A. Cooperative Societies
• B. Foreign Institutional Investors
• C. Private Money Syndicates
• D. Multi-National Corporations

28. What key problem prevents poor farmers from obtaining formal loans from commercial banks?

• A. Lack of asset collateral and formal documentation
• B. Refusal to pay interest charges
• C. Excess savings deposited in bank accounts
• D. Availability of interest-free informal credit

29. Why is cheap and affordable credit considered crucial for a nation's development?

• A. It enables people to invest in agriculture, business, and industries without severe debt burden
• B. It eliminates the need for paper currency
• C. It automatically raises government tax revenues
• D. It reduces overall agricultural production costs to zero

30. How do Self-Help Groups promote self-employment among poor rural women?

• A. By providing small, affordable loans for purchasing raw materials, seeds, cattle, and machinery
• B. By offering government civil service jobs directly
• C. By buying all products manufactured in villages at fixed prices
• D. By eliminating all formal banking branches in rural districts