100+ Money And Credit Class 10 MCQ and Answers

These Money And Credit Class 10 MCQ and Answers are the most important part of your NCERT Text book. Money and credit both play an important role in our day to day live. The meaning of both may sound similar, but there is a difference between them. The primary function of money is that of a medium of exchange, whereas the primary function of credit is “borrowing money” and the same has to be repaid at a deferred date. We made a playlist of NCERT Class 10 Economics Chapter-wise best questions and answers. You can check.

Money And Credit Class 10 MCQ and Answers

1. Which can be used as the best medium of exchange?

(a) Gold

(b) Land

(c) Money

(d) Goods

Answer: c

2. Which is/are modern forms of money?

(a) Paper notes

(b) Coins

(c) Both paper notes and coins

(d) None

Answer: c

3. Who issues the currency notes in India?

(a) Currency notes are issued by the Finance Commission.

(b) All the nationalized banks can issue the currency notes.

(c) Only Reserve Bank of India can issue currency notes.

(d) Any individual or organization can issue cur¬rency notes with the permission of the govt.

Answer: c

4. Which among the following banks issues currency notes on behalf of the Central Government in India?

(a) RBI

(b) State Bank of India

(c) Bank of India

(d) Central Bank of India

Answer: a

5. What do the banks do with the deposits which I they accept from the customers?

(a) Banks use these deposits for charitable activities.

(b) Banks use a major portion of deposits to extend loans.

(c) Banks use deposits to give bonus to their employees.

(d) Banks use deposits to set up more branches in the country.

Answer: b

6. What is the main source of income of a bank?

(a) Bank charges that the depositors pay for ; keeping their money safe is the main ; source of the bank’s income.

(b) The difference between what is charged from the borrowers and paid to the depositors is the main source of bank’s income.

(c) Banks earn huge amounts of money by investing the money of the depositors in various company shares.

(d) The Government of India gives huge amounts of money to the banks to help their smooth functioning.

Answer: b

7. An agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment refers to

(a) Debt

(b) Deposit

(c) Credit

(d) Collateral

Answer: c

8. Which body (authority) supervises the functioning of formal sources of loans?

(a) Finance Ministry

(b) Head Office of each Bank

(c) Reserve Bank

(d) Cooperative Societies

Answer: c

9. Money-lenders usually demand a ‘security’ from the borrower. What is the formal word used for the ‘security’, such as land, vehicle, livestock, building, etc.?

(a) Deposit

(b) Collateral

(c) Credit

(d) Guarantee

Answer: b

10. Which among the following options will be the cheapest source of credit in rural areas?

(a) Bank

(b) Cooperative Society

(c) Money-lender

(d) Finance Company

Answer: b

11. In which country is the Grameen Bank meeting the credit needs of over 6 million poor people?

(a) Bhuta

(b) Sri Lanka

(c) Bangladesh

(d) Nepal

Answer: c

12. A typical Self Help Group usually has

(a) 100-200 members

(b) 50-100 members

(c) less than 10 members

(d) 15-20 members

Answer: d

13. Which of the following is not an informal source of credit?

(a) Money-lender

(b) Relatives and Friends

(c) Commercial Banks

(d) Traders

14. Why is currency accepted as a medium of exchange?

(a) Because the currency is authorised by the government of the country.

(b) Because it is liked by the people who use it.

(c) Because the use of currency has its origin in ancient times.

(d) Because the currency is authorised by the World Bank.

Answer: a

15. What is the defect of the barter system?

(a) Lack of double coincidence of wants

(b) Difficulty in the measurement of value

(c) Difficulty in store of value

(d) All of these

Answer: d

16. Which of the following is the credit money?

(a) Cheque and draft

(b) Promissory note

(c) Exchange note

(d) All of these

Answer: d

17. Which among the following is the near money?

(a) Bonds

(b) Insurance policy

(c) Securities

(d) All of these

Answer: d

18. Which of the following is the feature of money?

(a) General acceptability

(b) Homogeneous unit

(c) Liquid asset

(d) All of these

Answer: d

19. In order to encourage investment in the economy, the Central Bank may ________

(a) Reduce Cash Reserve Ratio

(b) Increase Cash Reserve Ratio

(c) Sell Government securities in the open market

(d) Increase Bank Rate

Answer: a

20. Institution that accepts deposits for lending purpose is known as __________

(a) Commercial Bank

(b) Central Bank

(c) Government

(d) Public

Answer: a

21. Which of the following is the function of a commercial bank?

(a) Accepting deposits

(b) Credit creation

(c) Agency function

(d) All of these

Answer: d

22. The central bank can increase the availability of credit by:

(a) Rasing repo rate

(b) Raising reverse repo rate

(c) Buying government securities

(d) Selling government securities

Answer: d

23. Giving permission to withdraw money by an amount more than deposited to is known as _________

(a) Advance

(b) Overdraft

(c) Loan

(d) None of these

Answer: b

24. What are the alternative measures of money supply in India?

(a) M1

(b) M2

(c) M3 and M4

(d) All of these

Answer: d

25. Who circulates all mint and one rupee not in India?

(a) Ministry of Finance

(b) RBI

(c) Ministry of External Affairs

(d) State Government

Answer: a

26. Which of the following is the narrow measure of the money supply?

(a) M2

(b) M3

(c) M1

(d) M4

Answer: c

27. When was the minimum reserve system started in India?

(a) 1947

(b) 1948

(c) 1951

(d) 1957

Answer: d

28. Which is the most liquid measure of the money supply?

(a) M4

(b) M3

(c) M2

(d) M1

Answer: d

29. High Powered Money includes:

(a) C + DD + OD

(b) C + R + OD

(c) C + R + TD

(d) C + DD + TD

Answer: b

30. Indian Monetary System is based on ________

(a) Paper Standard

(b) Metallic Standard

(c) Gold Standard

(d) Credit Money Standard

Answer: a

More Related MCQs on Class 10 Economics

Chapter 1: Understanding Economic Development
Chapter 2: Sectors of Indian Economy
Chapter 3: Money and Credit
Chapter 4: Globalisation and the Indian Economy
Chapter 5: Consumer Rights