3. Money and Credit

*नोट: यह सेक्शन रिवीजन के लिए है। अपना ज्ञान परखने के लिए ऊपर दिए गए क्विज़ में भाग लें।

1. Before the advent of money, what was the exchange of goods for goods called?
   A) Money exchange  |  B) Barter System  |  C) Credit  |  D) None of these
2. What was the main problem of the Barter system?
   A) Double Coincidence of Wants  |  B) Lack of money  |  C) Goods getting spoiled  |  D) None of these
3. In the exchange process, what does money act as?
   A) Hurdle  |  B) Medium of Exchange  |  C) Enemy  |  D) None of these
4. Who has the authority to issue currency in India?
   A) State Bank  |  B) Reserve Bank of India (RBI)  |  C) Govt of India directly  |  D) None of these
5. Which form of modern money is called plastic money?
   A) Coins  |  B) Debit/Credit cards  |  C) Cheque  |  D) None of these
6. For what main purpose do banks use the major portion of deposits?
   A) Building houses  |  B) To extend Loans  |  C) Buying gold  |  D) None of these
7. What is a Cheque?
   A) A coin  |  B) A paper instructing the bank to pay a specific amount from a person's account  |  C) A note  |  D) None of these
8. What is meant by Credit?
   A) Fraud  |  B) Loan agreement  |  C) Savings  |  D) Profit
9. Which are the Formal Sources of credit?
   A) Moneylenders  |  B) Banks and Cooperatives  |  C) Relatives  |  D) Traders
10. Moneylenders and landlords come under which source of credit?
    A) Formal  |  B) Informal Sources  |  C) Governmental  |  D) None of these
11. What is Collateral?
    A) A gift  |  B) An asset that the borrower owns and uses as a guarantee to a lender  |  C) Interest  |  D) None of these
12. Who issues ₹1 notes and coins in India?
    A) RBI  |  B) Ministry of Finance  |  C) Prime Minister  |  D) SBI
13. How many members are usually there in a Self Help Group (SHG)?
    A) 100-200  |  B) 15-20  |  C) Only 2  |  D) 500
14. What is the main demand for credit in rural areas?
    A) Wedding  |  B) Crop production (seeds, fertilizers, pesticides)  |  C) House  |  D) Car
15. Before coins, what things were used as money in India?
    A) Plastic  |  B) Grains and cattle  |  C) Iron  |  D) None of these
16. What is included in the Terms of Credit?
    A) Interest rate  |  B) Collateral  |  C) Mode of repayment  |  D) All of the above
17. At what interest rate do moneylenders usually lend?
    A) Very low  |  B) Very high  |  C) Equal to bank  |  D) Zero
18. Why is money called a 'medium of exchange'?
    A) It is beautiful  |  B) Because it can be easily exchanged for any good or service  |  C) It is paper  |  D) None of these
19. Why are bank deposits called 'Demand Deposits'?
    A) Because they can be withdrawn on demand  |  B) Because it is the bank's demand  |  C) Because it is less  |  D) None of these
20. Who is the founder of Grameen Bank of Bangladesh?
    A) Amartya Sen  |  B) Prof. Muhammad Yunus  |  C) Sheikh Hasina  |  D) None of these
21. Who supervises the functioning of formal sources of loans?
    A) Central Government  |  B) Reserve Bank of India (RBI)  |  C) Supreme Court  |  D) None of these
22. When does a Debt-trap situation arise?
    A) When earning is good  |  B) When repayment of loan becomes impossible and exceeds the income  |  C) When interest is low  |  D) None of these
23. Why do poor families depend on informal sources for loans?
    A) They lack collateral  |  B) Banks are difficult to reach  |  C) Both A and B  |  D) They want to be rich
24. What is the difference between the interest charged on loans and what is paid on deposits?
    A) No difference  |  B) It is the main source of income for banks  |  C) It is a donation  |  D) None of these
25. How do SHGs empower women?
    A) They give them money  |  B) By providing financial self-reliance and a platform to discuss social issues  |  C) They give them jobs  |  D) None of these
26. Why do terms of credit vary for different lenders?
    A) For show  |  B) Based on the creditworthiness of borrower and availability of collateral  |  C) Only by choice  |  D) None of these
27. Are digital payments also a modern form of money?
    A) No  |  B) Yes, it is a medium of exchange just like cheques and currency  |  C) Only in cities  |  D) Don't know
28. Why does RBI make banks keep a 'Cash Reserve'?
    A) To make the bank poor  |  B) To ensure security for depositors and liquidity  |  C) For show  |  D) None of these
29. What do informal lenders lack compared to formal lenders?
    A) Money  |  B) Legal rules and Supervision  |  C) Interest  |  D) None of these
30. Why is cheap and affordable credit necessary for the country's development?
    A) It encourages business and investment  |  B) It makes people rich  |  C) It closes banks  |  D) None of these
31. What is the basis of 'acceptability' of money?
    A) Its beauty  |  B) It is authorized by the government  |  C) Its weight  |  D) None of these
32. What is the biggest advantage of payment by cheque?
    A) No need to keep cash  |  B) Money goes directly from one account to another  |  C) Security  |  D) All of the above
33. Why is 'documentation' important in terms of credit?
    A) To waste time  |  B) For legal confirmation of loan details and repayment  |  C) Only show  |  D) None of these
34. Who takes the decision regarding 'loans' in SHGs?
    A) Bank  |  B) Members of the group themselves  |  C) Government  |  D) Moneylender
35. How are Cooperatives beneficial for farmers?
    A) They charge very high interest  |  B) They provide loans and agricultural inputs at low interest  |  C) They don't provide seeds  |  D) None of these
36. Are banks ready to give loans to everyone?
    A) Yes  |  B) No, they demand collateral and proof of income  |  C) Only to friends  |  D) None of these
37. An example of the positive role of credit is:
    A) Taking a loan to increase production and gain income  |  B) Not being able to repay the loan  |  C) Losing money in gambling  |  D) None of these
38. What can be the negative role of credit?
    A) Expanding business  |  B) A farmer getting into heavy debt due to crop failure  |  C) Depositing money in bank  |  D) None of these
39. How did money solve the difficulty of 'double coincidence'?
    A) By making goods expensive  |  B) By measuring value of goods in money and making exchange easy  |  C) By finishing goods  |  D) None of these
40. What impact do bank lending activities have on society?
    A) Economic activity increases  |  B) Poverty is eradicated  |  C) Capital formation occurs  |  D) All of the above
41. How does the RBI ensure that banks do not lend only to rich traders?
    A) RBI demands regular information and reports from banks  |  B) It closes the bank  |  C) It takes away money  |  D) None of these
42. How do SHGs overcome the lack of collateral despite having none?
    A) Government gives money  |  B) Collective responsibility of the group acts as a guarantee for the bank  |  C) They steal  |  D) None of these
43. Apart from interest rate, what are other conditions of a loan called?
    A) Terms of Credit  |  B) Bank rules  |  C) Business terms  |  D) None of these
44. Where can the Barter system still be seen today?
    A) In stock market  |  B) In some small transactions in rural areas  |  C) In malls  |  D) None of these
45. If most of the credit in the country is taken from informal sources, what will happen?
    A) Development will be fast  |  B) High interest rates will decrease net income and affect development  |  C) Banks will flourish  |  D) None of these
46. How has the 'digital' form of money changed bank operations?
    A) Increased work  |  B) Increased speed of transactions and reduced documentation  |  C) Closed banks  |  D) None of these
47. What do banks accept as Collateral?
    A) Land titles, FD, livestock, house  |  B) Only utensils  |  C) Only promises  |  D) None of these
48. Do SHGs only help financially?
    A) Yes  |  B) No, they also discuss social issues like health, nutrition, and domestic violence  |  C) They only teach  |  D) None of these
49. Why does the 'value' of money change over time?
    A) Due to paper  |  B) Due to Inflation and purchasing power  |  C) Due to color  |  D) None of these
50. What was the main objective of Grameen Bank of Bangladesh?
    A) To lend to the rich  |  B) To meet the credit needs of the poor, especially women  |  C) Fighting wars  |  D) None of these
51. What is the importance of cooperative banks in India?
    A) They are private  |  B) They are a cheap option of credit for rural and agricultural development  |  C) They are only in Delhi  |  D) None of these
52. Why is money considered 'universally accepted'?
    A) Because the law binds to accept it  |  B) Because it is gold  |  C) Because it is free  |  D) None of these
53. What is meant by 'Crossing' a cheque?
    A) Cutting it  |  B) Ensuring payment only into the recipient's bank account  |  C) Cancelling it  |  D) None of these
54. How can informal lenders behave with the borrower?
    A) They are kind  |  B) They can use unfair means and exploit  |  C) They don't ask for money  |  D) None of these
55. Is using a credit card taking a 'loan'?
    A) Yes, it is a credit limit given by the bank  |  B) No, it is savings  |  C) Don't know  |  D) None of these
56. What is the benefit of 'formal' expansion of credit to the economy?
    A) Corruption increases  |  B) Financial inclusion and transparency of loans increase  |  C) Banks sink  |  D) None of these
57. Why do rich families in urban areas use formal credit sources more?
    A) They are aware  |  B) They have enough collateral and proof of income  |  C) They own banks  |  D) None of these
58. What could be the future of money?
    A) Only coins  |  B) Fully cashless and digital currency (CBDC)  |  C) Return of barter  |  D) None of these
59. Why is only a small part of deposits kept as cash in banks?
    A) Lack of space  |  B) Because only a few depositors come to withdraw money daily  |  C) Fear of theft  |  D) None of these
60. What does RBI control through Monetary Policy?
    A) Elections  |  B) Money supply and interest rates  |  C) Roads  |  D) None of these