NCERT Book Class 10th Economics (MCQ)
Chapter 3 : Money and Credit
MCQs on Money and Credit
1. From which language does the word ‘Mudra’ (currency) originate from the word ‘Moneta’?
a) Sanskrit
b) Latin
c) Greek
d) French
Answer: b) Latin
2. Which function of currency eliminates the problem of barter exchange?
a) Store of value
b) Medium of exchange
c) Measure of value
d) Deferred payment
Answer: b) Medium of exchange
3. Which of the following is not a characteristic of modern currency?
a) General acceptability
b) Durability
c) Divisibility
d) Heavy weight
Answer: d) Heavy weight
4. Who has the authority to issue paper currency in India?
a) Ministry of Finance
b) State Bank of India
c) Reserve Bank of India
d) NABARD
Answer: c) Reserve Bank of India
5. Due to which function of currency can we compare the value of different goods?
a) Medium of exchange
b) Measure of value
c) Store of value
d) Deferred payment
Answer: b) Measure of value
6. What is the primary function of commercial banks?
a) Issuing currency
b) Accepting deposits and providing loans
c) Managing foreign exchange
d) Formulating government policies
Answer: b) Accepting deposits and providing loans
7. What percentage of deposits do banks keep as cash reserves?
a) 5%
b) 15%
c) 25%
d) 50%
Answer: b) 15%
8. What is the process of banks granting loans called?
a) Credit creation
b) Money creation
c) Investment creation
d) Capital creation
Answer: a) Credit creation
9. Which bank in India issues currency?
a) Reserve Bank of India
b) State Bank of India
c) Punjab National Bank
d) All of the above
Answer: a) Reserve Bank of India
10. What is the Bank Rate?
a) Interest charged by banks from customers
b) Interest given by banks
c) Interest charged by RBI from commercial banks
d) Tax imposed by the government
Answer: c) Interest charged by RBI from commercial banks
11. What does “credit” mean?
a) Cash payment
b) A promise to pay in the future
c) Free grant
d) Government subsidy
Answer: b) A promise to pay in the future
12. Which of the following is not a formal source of credit?
a) Commercial banks
b) Cooperative societies
c) Moneylenders
d) Regional Rural Banks
Answer: c) Moneylenders
13. Which institution provides loans to rural poor at affordable rates?
a) RBI
b) NABARD
c) SEBI
d) SIDBI
Answer: b) NABARD
14. Typically, how many members are there in a Self-Help Group (SHG)?
a) 5-10
b) 15-20
c) 25-30
d) 50-60
Answer: b) 15-20
15. A characteristic of formal sources of credit is:
a) High interest rate
b) Low interest rate
c) No written agreement
d) No collateral required
Answer: b) Low interest rate
16. Which loan condition may prevent borrowers from taking loans?
a) Interest rate
b) Collateral
c) Documentation
d) All of the above
Answer: d) All of the above
17. What does “collateral” mean?
a) Interest rate on a loan
b) Asset pledged against a loan
c) Loan application form
d) Bank fees
Answer: b) Asset pledged against a loan
18. What is the main problem poor farmers face in obtaining loans?
a) High interest rates
b) Lack of collateral
c) Complex procedures
d) All of the above
Answer: d) All of the above
19. Unavailability of credit for farmers can lead to:
a) Decline in crop production
b) Suicides
c) Poverty cycle
d) All of the above
Answer: d) All of the above
20. (CBSE 2019) Which of the following is a formal source of credit?
a) Moneylender
b) Punjab National Bank
c) Merchant
d) Landlord
Answer: b) Punjab National Bank
21. Who primarily makes up the membership of Self-Help Groups (SHGs)?
a) Only men
b) Only women
c) Both men and women
d) Only children
Answer: b) Only women
22. How much do SHG members contribute monthly?
a) ₹25-100 per month
b) ₹500-1000 per month
c) ₹5000-10,000 per month
d) No fixed amount
Answer: a) ₹25-100 per month
23. On what basis are loans given to SHG members?
a) Based on collateral
b) Based on group’s collective responsibility
c) Based on government guarantee
d) Based on bank guarantee
Answer: b) Based on group’s collective responsibility
24. What is the main objective of SHGs?
a) Empowering women
b) Providing credit to the poor
c) Promoting income-generating activities
d) All of the above
Answer: d) All of the above
25. What is the program called that links SHGs to banks?
a) Jan Dhan Yojana
b) SHG-Bank Linkage Program
c) MUDRA Yojana
d) Stand-Up India
Answer: b) SHG-Bank Linkage Program
26. (CBSE 2019) Which function of money solves the problem of barter exchange?
a) Store of value
b) Medium of exchange
c) Measure of value
d) Deferred payment
Answer: b) Medium of exchange
27. (UP Board 2020) Who has the authority to issue paper currency in India?
a) Ministry of Finance
b) State Bank of India
c) Reserve Bank of India
d) NABARD
Answer: c) Reserve Bank of India
28. (MP Board 2018) What percentage of deposits do banks keep as cash reserves?
a) 5%
b) 15%
c) 25%
d) 50%
Answer: b) 15%
29. (Bihar Board 2021) An example of an informal source of credit is:
a) Commercial bank
b) Cooperative society
c) Moneylender
d) Regional Rural Bank
Answer: c) Moneylender
30. (CBSE 2020) Typically, how many members are there in a Self-Help Group (SHG)?
a) 5-10
b) 15-20
c) 25-30
d) 50-60
Answer: b) 15-20
31. What is referred to as “plastic money”?
a) Credit card
b) Debit card
c) Cheque
d) Both a and b
Answer: d) Both a and b
32. An example of digital currency is:
a) Bitcoin
b) Paytm
c) UPI
d) All of the above
Answer: d) All of the above
33. What type of payment instrument is a cheque?
a) Cash
b) Credit
c) Barter
d) Gift
Answer: b) Credit
34. What type of monetary system does India have?
a) Commodity money
b) Fiat money
c) Metallic money
d) Barter system
Answer: b) Fiat money
35. In which form of money is interest charged?
a) Cash
b) Credit card
c) Debit card
d) Cheque
Answer: b) Credit card
36. A bank loan that allows withdrawing more than the deposited amount is called:
a) Cash credit
b) Overdraft
c) Bank guarantee
d) Term loan
Answer: b) Overdraft
37. A long-term loan provided by a bank is called:
a) Cash credit
b) Overdraft
c) Term loan
d) Personal loan
Answer: c) Term loan
38. The full form of KYC is:
a) Know Your Customer
b) Know Your Creditor
c) Keep Your Cash
d) Know Your Currency
Answer: a) Know Your Customer
39. Mobile banking services provided by banks include:
a) NEFT
b) RTGS
c) IMPS
d) All of the above
Answer: d) All of the above
40. Interest paid by banks on deposits is:
a) Simple interest
b) Compound interest
c) Either a or b
d) Not paid
Answer: c) Either a or b
41. The main informal source of credit in rural areas is:
a) Moneylender
b) Landlord
c) Merchant
d) All of the above
Answer: d) All of the above
42. What problems do farmers face when borrowing from moneylenders?
a) High interest rates
b) Unfair terms
c) Debt trap
d) All of the above
Answer: d) All of the above
43. Formal sources of rural credit include:
a) Commercial banks
b) Cooperative societies
c) Regional Rural Banks
d) All of the above
Answer: d) All of the above
44. Who issues the Kisan Credit Card (KCC)?
a) RBI
b) Commercial banks
c) Cooperative banks
d) Both b and c
Answer: d) Both b and c
45. The main objective of cooperative societies is:
a) Providing loans to members at low rates
b) Earning profit
c) Implementing government policies
d) Tax collection
Answer: a) Providing loans to members at low rates
46. What was the earliest form of money used in history?
a) Coins
b) Paper currency
c) Commodity money
d) Digital currency
Answer: c) Commodity money
47. In India, the ‘MUDRA Scheme’ is related to:
a) Issuing new currency
b) Loans to small entrepreneurs
c) Promoting digital payments
d) Increasing foreign exchange reserves
Answer: b) Loans to small entrepreneurs
48. The objective of ‘Jan Dhan Yojana’ is:
a) Providing bank accounts to all
b) Distributing free money
c) Increasing tax collection
d) Nationalizing banks
Answer: a) Providing bank accounts to all
49. The ‘Digital India’ program is related to:
a) Only internet access
b) Promoting digital payments
c) Only smartphone distribution
d) Only e-governance
Answer: b) Promoting digital payments
50. The full form of ‘UPI’ is:
a) United Payment Interface
b) Unified Payment Interface
c) Universal Payment Interface
d) Unique Payment Interface
Answer: b) Unified Payment Interface
51. Due to which problem in the barter system was money invented?
a) Problem of measuring value
b) Problem of double coincidence of wants
c) Problem of storing goods
d) Problem of transporting goods
Answer: b) Problem of double coincidence of wants
52. Which function of money allows us to save for the future?
a) Medium of exchange
b) Measure of value
c) Store of value
d) Deferred payment
Answer: c) Store of value
53. Who has the authority to issue one-rupee notes and coins in India?
a) Reserve Bank of India
b) Ministry of Finance
c) State Bank of India
d) NABARD
Answer: b) Ministry of Finance
54. What is it called when banks keep a small portion of deposits as cash?
a) Cash Reserve Ratio (CRR)
b) Statutory Liquidity Ratio (SLR)
c) Bank Rate
d) Repo Rate
Answer: a) Cash Reserve Ratio (CRR)
55. What percentage of bank deposits are kept as SLR?
a) 5-10%
b) 15-18%
c) 25-30%
d) 40-50%
Answer: b) 15-18%
56. What is the main advantage of formal sources of credit?
a) High interest rate
b) Regular interest rate
c) Low interest rate
d) No documentation required
Answer: c) Low interest rate
57. Who is the main informal source of credit in rural areas?
a) Commercial banks
b) Cooperative societies
c) Moneylenders
d) Regional Rural Banks
Answer: c) Moneylenders
58. What is the repayment rate like in Self-Help Groups (SHGs)?
a) Very low
b) Very high
c) Average
d) No fixed rate
Answer: b) Very high
59. What is the main feature of Kisan Credit Card (KCC)?
a) Only cash withdrawals
b) Loans only for agricultural purposes
c) Flexible loan facility
d) Only for large farmers
Answer: c) Flexible loan facility
60. Which statement is correct about cooperative societies?
a) They work to earn profits
b) They work in the interest of members
c) They are only for government employees
d) They operate only in urban areas
Answer: b) They work in the interest of members
61. (CBSE 2018) Which function of money solves the problem of barter exchange?
a) Store of value
b) Medium of exchange
c) Measure of value
d) Deferred payment
Answer: b) Medium of exchange
62. (UP Board 2019) Who has the authority to issue paper currency in India?
a) Ministry of Finance
b) State Bank of India
c) Reserve Bank of India
d) NABARD
Answer: c) Reserve Bank of India
63. (MP Board 2020) What percentage of deposits do banks keep as cash?
a) 5%
b) 15%
c) 25%
d) 50%
Answer: b) 15%
64. (Bihar Board 2021) An example of an informal source of credit is:
a) Commercial bank
b) Cooperative society
c) Moneylender
d) Regional Rural Bank
Answer: c) Moneylender
65. (CBSE 2020) Typically, how many members are there in a Self-Help Group (SHG)?
a) 5-10
b) 15-20
c) 25-30
d) 50-60
Answer: b) 15-20
66. What is UPI (Unified Payments Interface)?
a) A type of credit card
b) Instant mobile payment system
c) A type of bank cheque
d) Foreign currency exchange system
Answer: b) Instant mobile payment system
67. What is the full form of RTGS?
a) Real Time Gross Settlement
b) Real Time Government Settlement
c) Real Time Global Settlement
d) Real Time Group Settlement
Answer: a) Real Time Gross Settlement
68. How long does NEFT take to transfer money?
a) Instant
b) 1-2 hours
c) 2-4 hours
d) Next working day
Answer: d) Next working day
69. What is the main feature of IMPS?
a) Only large amount transfers
b) 24×7 instant transfer
c) Only international transfers
d) Only government transactions
Answer: b) 24×7 instant transfer
70. Which scheme was launched by the Indian government for digital payments?
a) Jan Dhan Yojana
b) Digital India
c) MUDRA Yojana
d) Pradhan Mantri Garib Kalyan Yojana
Answer: b) Digital India
71. In which year was the Reserve Bank of India established?
a) 1935
b) 1947
c) 1950
d) 1969
Answer: a) 1935
72. What was the main objective of bank nationalization?
a) To extend banking services to rural areas
b) To privatize banks
c) To promote foreign banks
d) To increase interest rates
Answer: a) To extend banking services to rural areas
73. What is the main objective of microfinance institutions?
a) To give loans to large industries
b) To provide small loans to the poor and small entrepreneurs
c) To fund only government projects
d) To promote foreign investment
Answer: b) To provide small loans to the poor and small entrepreneurs
74. In which year were 14 major banks nationalized in India?
a) 1947
b) 1969
c) 1991
d) 2000
Answer: b) 1969
75. What was the main problem with the barter system?
a) Lack of money
b) Lack of double coincidence of wants
c) Absence of banks
d) Government control
Answer: b) Lack of double coincidence of wants