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Money and Credit Class 10 MCQ: The CBSE Board has introduced changes to the exam pattern for the 2024-25 session, notably increasing the percentage of multiple-choice questions (MCQs) to 20% in Class 10 exams. Each MCQ carries one mark, offering students an opportunity to score well with focused preparation. Infinity Learn provides curated MCQs for Class 10 Economics Chapter 3, aligned with the latest CBSE syllabus and accompanied by answers, aimed at helping students excel in the upcoming CBSE Class 10 Social Science Exam 2024.
By engaging with the Money and Credit Class 10 MCQs, students can assess their grasp of the subject and evaluate their preparation level effectively. This study approach facilitates a deeper comprehension of how money functions as a medium of exchange and the underlying principles governing its use in economic transactions.
Also Read: Top 10 Social Science Important Topics for Class 10
Money and Credit Class 10 MCQ Social Science Economics Chapter 3
1. Which of the following is not a primary function of money in an economy?
A. Medium of exchange
B. Store of value
C. Producer of goods
D. Unit of account
Answer: C. Producer of goods
2. In India, the Reserve Bank of India (RBI) regulates the credit activities of banks through:
A. Fiscal policy
B. Monetary policy
C. Trade policy
D. Industrial policy
Answer: B. Monetary policy
3. What does the term ‘Collateral’ mean in the context of loans?
A. Interest charged on loans
B. Loan repayment period
C. Security against loans
D. Credit history of borrower
Answer: C. Security against loans
4. Which of the following is an example of informal sources of credit?
A. Commercial banks
B. Cooperative societies
C. Money lenders
D. Regional Rural Banks (RRBs)
Answer: C. Money lenders
5. What is the main disadvantage of borrowing from informal sources of credit?
A. High rate of interest
B. Easy availability
C. Formal paperwork
D. Government regulation
Answer: A. High rate of interest
6. Which institution acts as the lender of last resort in India?
A. State Bank of India (SBI)
B. NABARD
C. Reserve Bank of India (RBI)
D. Punjab National Bank (PNB)
Answer: C. Reserve Bank of India (RBI)
7. Which one of the following statements is true about credit?
A. Credit always creates a burden on the borrower.
B. Credit can be taken only from banks.
C. Credit constitutes an arrangement where a lender provides funds, goods, or services to a borrower with the expectation of repayment in the future.
D. Credit does not involve repayment.
Answer: C. Credit constitutes an arrangement where a lender provides funds, goods, or services to a borrower with the expectation of repayment in the future.
8. What is the main advantage of the Self-Help Groups (SHGs) in providing credit to their members?
A. Low interest rates
B. No need for repayment
C. Government subsidies
D. No collateral required
Answer: D. No collateral required
9. Which of the following is not a modern form of money?
A. Currency notes
B. Cheques
C. Barter
D. Credit cards
Answer: C. Barter
10. What is the primary function of a bank?
A. Manufacturing goods
B. Providing insurance
C. Providing credit
D. Collecting taxes
Answer: C. Providing credit
12. What does the term ‘credit’ refer to in financial transactions?
(a) Debit
(b) Cash transaction
(c) Credit
(d) Trade
Answer: (c) Credit
13. What term describes deposits in bank accounts that can be withdrawn by the account holder at any time?
(a) Fixed deposits
(b) Savings
(c) Demand deposits
(d) Demand drafts
Answer: (c) Demand deposits
14. How do banks primarily utilize the deposits they receive from customers?
(a) Meet their routine expenses
(b) Extend loans
(c) Meet renovation of the bank
Answer: (c) Extend loans
15. Besides paper money, which other form of currency is increasingly prevalent today?
(a) Commodity money
(b) Metallic money
(c) Plastic money
(d) All of the above
Answer: (c) Plastic money
Money and Credit Class 10 MCQ – Extra Questions
Q1. What term describes an agreement in which the lender provides money, goods, or services to the borrower in exchange for a promise of future repayment?
A. Debit
B. Cash transaction
C. Credit
D. Trade
Answer: C. Credit
Q2. In a Self-Help Group (SHG), who primarily makes decisions regarding savings and loan activities?
A. Bank
B. Members
C. Non-government organization
D. None of the above
Answer: B. Members
Q3. In rural areas, what is the primary demand for credit typically related to?
A. Industry
B. Crop production
C. Irrigation
D. Cultivation
Answer: B. Crop production
Q4. What term describes an asset owned by the borrower (such as land, building, or deposits) that serves as security for a loan until it is repaid?
A. Debt trap
B. Guarantee
C. Collateral
D. Warranty
Answer: C. Collateral
Q5. The interest rate, collateral requirement, documentation, and repayment terms collectively make up what aspect of a loan?
A. Debt trap
B. Terms of credit
C. Guarantee
D. Warranty
Answer: B. Terms of credit
Q6. Which organizations are involved in arranging formal sector loans?
A. Banks
B. Cooperatives
C. Moneylenders
D. A & B
Answer: D. A & B (Banks and Cooperatives)
Q7. According to available data on formal and informal loans, what percentage of loans do poor households typically obtain from informal sources?
A. 60%
B. 75%
C. 85%
D. 70%
Answer: D. 70%
Q8. What term describes the interest rate charged by the central bank to commercial banks for short-term loans?
A. Retail rate
B. Base rate
C. Repo rate
D. Prime rate
Answer: C. Repo rate
Q9. In the context of credit, what does the acronym ‘SHG’ stand for?
A. Savings and Housing Group
B. Self-Help Group
C. Small Home Group
D. Social Health Group
Answer: B. Self-Help Group
Q10. What is the primary purpose of ‘plastic money’ in financial transactions?
A. Long-term savings
B. Cash withdrawals
C. Electronic payments
D. Foreign currency exchange
Answer: C. Electronic payments
Q11. Which entity regulates and supervises the functioning of banks in India?
A. SEBI
B. RBI
C. IRDAI
D. NABARD
Answer: B. RBI (Reserve Bank of India)
Q12. What term describes a situation where a borrower is unable to repay their loan due to high interest rates and difficult repayment terms?
A. Credit crunch
B. Debt trap
C. Loan default
D. Financial crisis
Answer: B. Debt trap
Q13. Which type of deposit allows account holders to withdraw money anytime without prior notice to the bank?
A. Fixed deposit
B. Recurring deposit
C. Demand deposit
D. Term deposit
Answer: C. Demand deposit
Q14. In the context of credit, what does ‘collateral’ refer to?
A. Interest charged on loans
B. Security against loans
C. Credit history of borrower
D. Bank guarantee
Answer: B. Security against loans
Q15. Which financial institution in India serves as the lender of last resort to commercial banks?
A. NABARD
B. SIDBI
C. RBI
D. SEBI
Answer: C. RBI (Reserve Bank of India)
Q16. What type of credit is extended by informal sources like moneylenders and relatives?
A. Long-term credit
B. Short-term credit
C. Medium-term credit
D. Collateral-free credit
Answer: B. Short-term credit
