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Money and Credit Test - 9

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Money and Credit Test - 9
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Weekly Quiz Competition
  • Question 1
    1 / -0
    In rural areas farmers take credit for _____.
    Solution
    • In rural areas farmers take credit for crop production.
    • Farmers usually lend from co-operative societies or banks or from money lenders if banks are not available.
    • Usually, co-operative banks charge lower interest rates as compared to money lenders.
  • Question 2
    1 / -0
    Credit is generally given at a high rate of interest by _____.
    Solution
    • Money lenders are the indigenous bankers.
    • They usually lend money to people at higher rates of Interest.
    • Money lenders lending system is mostly unregulated in India.
  • Question 3
    1 / -0
    For the development of a country the credit should be _____.
    Solution
    Economic growth is prerequisite for the economic development of the country.
    Cheap and affordable credit (low-interest rates) is one of the prerequisites for economic growth of any country. 
  • Question 4
    1 / -0
    In rural areas, what is the major reason behind taking the credit?
    Solution
    • About 60% of the Indian population is dependent on agriculture.
    • Most of the Indian farmers are small and marginal farmers.
    • Rural farmers savings are very less.
    • Rural farmers seek credit for the production of crops as there are no savings left with them from the last year.
  • Question 5
    1 / -0
    Which of the following does the terms of credit NOT include?
    Solution

    • 1:Credit refers to a loan, an agreement in which the lender supplies the borrower with money, goods or services which is to be returned in future
      2:Terms of credit include interest rate, collateral (security) and documentation related to the lending of money.
  • Question 6
    1 / -0
    What do you mean by 'credit'?
    Solution
    • Credit means agreement between borrower and lender by which borrower lends money, goods and services in return for the promise of future payment.
    • If credit not repaid by the borrower then they are termed as defaulters.
    • Credit history of the borrowers will be affected.
    • In India, RBI supervises the credit of banking system.
  • Question 7
    1 / -0
    Introduction of___________ eliminated the need for double coincidence of wants.
    Solution
    • In the olden times, People exchanged services and goods for other services and goods in return.
    • The problem of double coincidence of wants arise due to the above mentioned exchange of goods system.
    • The problem was solved with the introduction of money..
    • Money is used medium of exchange and for storage of value.
    • The correct option is D.
  • Question 8
    1 / -0
    Credit from _______________ pushes the borrower into a painful situation.
    Solution
    When a poor person takes a loan he does find it convenient to go to a bank basically because he is uneducated and even does not have a collateral to present in a bank.
    Hence he reaches out to the informal sources of credit which are basically the moneylenders. When he goes to moneylenders the rates of interest charged by them is very high but since the borrower is in need he has no other option.
  • Question 9
    1 / -0
    Paper notes and coins are accepted as a medium of exchange because they are _____.
    Solution
    • In Modern times paper notes and coins are used as medium of exchange.
    • Paper notes and coins are printed and circulated by RBI in India except One Rupee notes and coins.
    • One Rupee coins are printed by the Finance Ministry.
    • Only paper notes and coins printed by Government are authorised to use.
  • Question 10
    1 / -0
    Why is money called a 'medium of exchange' ?
    Solution
    Money helps to facilitate trade because people in the economy generally recognize it as valuable. Money is called medium of exchange because money is a widely accepted token that can be used for exchange of any good or service. In old days, barter system was used as medium of exchange and later it was gold.
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