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1. Money is accepted as a medium of exchange because
A. It is made of gold
B. It has its own utility
C. It is authorised by the government
D. It can be easily carried
2. What is the main problem in a barter system?
A. Lack of goods
B. Double coincidence of wants
C. Lack of sellers
D. Absence of quality goods
3. Which organisation issues currency notes in India?
A. State Bank of India
B. Reserve Bank of India
C. Ministry of Finance
D. Government of India directly
4. What are deposits that can be withdrawn on demand called?
A. Fixed deposits
B. Recurring deposits
C. Demand deposits
D. Savings certificates
5. The facility of cheque against demand deposits makes it possible to
A. Withdraw loans directly
B. Settle payments without cash
C. Earn more interest
D. Open more accounts
6. Why do banks keep only a small proportion of deposits as cash?
A. To avoid theft
B. Because all depositors withdraw at once
C. Because only some depositors withdraw on a given day
D. To give more to government
7. What is the main source of income for banks?
A. Service fees
B. Government subsidies
C. Difference between interest on loans and deposits
D. Tax collections
8. Credit refers to
A. Borrowing without repayment
B. Money given as gift
C. An agreement to repay in future
D. Only cash loans
9. In Salim’s case, credit was used for
A. Personal expenses
B. Buying luxury goods
C. Meeting production expenses
D. Repaying earlier loans
10. Swapna’s case shows that credit can
A. Always increase income
B. Push people into debt trap
C. Never be risky
D. Be risk-free in farming
11. What is collateral?
A. Extra money paid by borrower
B. Security against a loan
C. Bank profit
D. Loan document
12. What was taken as collateral in Megha’s housing loan?
A. Salary slip
B. Her old house
C. Papers of the new house
D. Jewellery
13. Terms of credit include
A. Loan amount, interest rate, collateral
B. Only interest rate
C. Only loan duration
D. Only repayment method
14. Why do lenders ask for collateral?
A. To give gifts
B. To ensure repayment
C. To earn interest only
D. To reduce deposits
15. Shyamal earlier borrowed at
A. 5% per year
B. 60% per year
C. 3% per year
D. 12% per year
16. Arun was able to get a bank loan because
A. He had collateral
B. He was a landless labourer
C. He was a trader
D. He was a moneylender
17. Who provides loans to landless workers like Rama?
A. Cooperative societies
B. Employers/landowners
C. Reserve Bank of India
D. Commercial banks
18. Cooperative societies are a major source of credit in
A. Urban industries only
B. Rural areas
C. Foreign trade
D. Government offices
19. In India, which authority supervises banks?
A. Supreme Court
B. State Bank of India
C. Reserve Bank of India
D. Finance Commission
20. Which sector charges higher interest on loans?
A. Formal sector
B. Informal sector
C. Cooperative banks
D. Government agencies
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