Money and Credit Test - 24

Any future monetary claim against an individual that can be used is called credit money. Token coins, circulating promissory notes issued by the government, and demand deposits in the bank are the forms of credit money. Hence, option D is correct.

SHG's help the women and rural poor to become self-reliant. Self Help Groups are groups of rural poor people (especially women). The idea is to help them organize themselves, help them financially, provide them work, help them in other matters including domestic issues. Government provides such groups loans at very low interests and provides help to market the products of SHG. Hence, correct answer is option A.

1. The members of group can take small loan from the group itself to meet their needs.
2. The group charges Interest rate less than moneylenders which help them to repay their loan with great ease.
   
3. These group are organized by women of a rural area. So, these group gives special status to women.
   
4. These groups gradually can seek loans for the bank so as to create employment opportunities for its members.
   
5. Banks have been extending loans to these groups to meet their needs like buying fertilizers, seeds, raw materials etc.
   
6. These SHG have emerged as building blocks of the rural poor as it is the group as a whole which is responsible of the repayment of the loan. In case, of non-repayment it is taken up in a serious manner by the group members.
   

Hence, correct answer is option D.

a. Credit cards - (iii) Point of sales (PoS) machine.
b. Cheque - (iv) Demand deposits.
c. Banking - (i) Tertiary sector.
d. RBI - (ii) Currency notes.
 Hence, correct answer is option D.

Majority of the people in rural areas depend on informal sources for loans. Informal sources include landlords and rich farmers. Hence, correct answer is option A.

1:SHG (Self Help Group) important decisions in regard to loan and savings are taken by group members.
2:Self Help Groups issue loans at reasonable rate of interest.

Money can be exchange in the form of currency notes, coins, cheques, demand drafts etc. for financial transactions among the people.
Instruments like cheques, demand drafts have to be cleared by the banks.

In Self Help Groups, group members decide the savings and loan activity options.
SHG is a mutual help group.
They come together to solve their economic issues and earn income.

Debt trap is a situation where the debtor will not be able to repay the debt incurred.
Debt trap situation may arise due to the higher interest rates or change in terms and conditions of debt incurred.
Normally, debt trap will result in default of payments or bankruptcies.
In case of crop failure, when the farmer get no return for the capital invested in buying agricultural inputs.
Farmer has to sell a part of his land to repay his loan and has no resources to generate income in the next year.

• Self Help Group is a small group of 10 to 20 people formed to mutually help each other.
• SHGs help in promoting self employment, credit, awareness and savings.
• Banks supports SHGs by means of bank linkage programme.