ECONOMICS - Money and Credit

Money and Credit

Short Questions1. What is the major source of credit for rich households in urban areas? Answer : Formal source of...

Question Mark - 3

1. What are the pre-requisites for the credit system in India to be successful for poor? Answer : To improve the cre...

2. "The use of money spans a very large part of our everyday life." Support the statement with example. Answer : Th...

3. How does the use of money make it easier to exchange things ? Give an example. OR "The Rupee is widely accepted as...

4. Why is modern currency accepted as a medium of exchange without any use of its own? Find out the reason. Answer :...

5. How are deposits with the banks beneficial for individual as well as for the nation? Explain with examples. Answe...

6. Why do the farmers take loans? Answer : Farmers often borrow money at the start of the crop season to fund their c...

7. What are the factors that influence the usefulness of a loan? Answer : Whether a loan is beneficial depends on tw...

8. How does money remove the difficulty of double coincidence of wants? Answer : Money has solved the issue of needin...

9. How can money be easily exchanged for goods or services ? Give an example to explain. Answer : People created mone...

10. "The credit activities of the informal sector should be discouraged." Support the statement with arguments. Answe...

11. "Banks are efficient medium of exchange." Support the statement with arguments. Answer : We agree with the stat...

12. How do banks mediate between those who have surplus money and those who need money? Answer : Banks play the role...

13. Why the poor people depend on informal sources of credit? Answer : Poor people rely on informal sources of credi...

14. How do banks play an important role in the economy of India ? Explain. Answer : Banks play a crucial role in Ind...

15. What are the main functions of a bank? Answer : i. Banks mainly take people's money as deposits and lend it to o...

16. In situations with high risks, credit might create further problems for the borrower. Explain. Answer : When so...

17. Explain any three loan activities of banks in India. Answer : Activities of banks in India which are involved i...

18. What is credit ? What are its importance ? Answer : Credit (loan) refers to an agreement between a lender and...

19. Why do lenders ask for 'collateral' while lending? Analyse the reasons. OR Why do banks demand 'collateral' whil...

20. "Self-Help Groups' help borrowers to overcome the problem of lack of collateral." Examine the statement. Answer...

21. How does RBI supervise the working of formal sector in India? Answer : The Reserve Bank of India (RBI) oversee...

21. What happens when there is no one to supervise informal sector lending? Answer : Moneylenders can charge any in...

22. What are the pros and cons of getting loans from informal sources? Answer : Borrowing from informal sources li...

23. Explain any three terms of Credit. Answer : The three terms of credit are as under: i. Collateral is something...

24. Why are most of the poor households deprived of the formal sector of loans? Answer : Poor households, even tod...

25. Why is it necessary to increase a large number of banks mainly in rural areas? Explain. Answer : Opening more...

26. What are "Terms of Credit"? Are they same for every borrower? Answer : The "Terms of Credit" include the agreem...

27. What is SHG? What are the two benefits of SHG? Answer : A Self-Help Group (SHG) is a group of poor people who co...

28. 'Credit has its own unique role for development. Justify the statement with arguments. Answer : Role of credit i...

29. "Deposits with the banks are beneficial to the depositors as well as to the nation." Examine the statement. Answe...

30. Why should banks and cooperative societies need to lend more? Answer : Banks and cooperative societies need to l...

Question Mark - 5

1. Why is the barter system not suitable for a modern economy? What are the merits of money? Answer : The barter syst...

2. “The rich households are availing cheap credit from formal lenders whereas the poor households have to pay a heavy pr...

3. Analyse the role of credit for development. OR 'Credit has its own unique role for development', justify the statem...

4. In India, about 80 percent of farmers are small farmers, who need credit for cultivation. (i) Why might banks be u...

5. Why is it necessary for the banks and cooperative societies to increase their lending facilities in rural areas? Expl...

6. Why do you think that richer section of the society has better access to formal sector loans while poor section does...

7. Write a note on the "Cooperative"? Answer : A cooperative or cooperative society is a group of people who work t...

8. Why do we need to expand formal sources of credit in India? Answer : We should expand formal sources of credit t...

9. What is the basic idea behind the SHGs for the poor? Explain in your own words. OR Write a note on Self-Help Grou...

10. In what ways does the Reserve Bank of India supervise the functioning of banks? Why is this necessary? OR How does...

11. What is money? What are the modern forms of money? How has it removed the difficulties of barter system? OR "Money...

12. Because of this feature, banks are willing to lend to the SHGs, even though they have no collateral. What are Self-H...

13. What are the differences between formal and informal sources of credit? Formal sources : i. These sources of c...

14. What are the merits and demerits of credit ? "Credit is useful as well as harmful, it depends on the risk involved."...

15. Write a note on the success story of ‘Grameen Bank of Bangladesh’. Answer : Grameen Bank of Bangladesh was founde...

16. How can the formal sector loans be made beneficial for poor farmers and workers? Suggest any five measures. Answer...