Question Bank - MONEY AND CRED...
Explore the concepts of money, its role in the economy, and the functioning of credit systems in this chapter.
What is the role of credit in economic development?
Explain the concept of formal and informal sources of credit.
What is the primary function of modern money?
Which of the following is NOT considered modern money?
What does it mean when currency is called 'fiat money'?
What institution issues currency in India?
How do demand deposits enhance the utility of money?
What was a significant effect of demonetisation in India in 2016?
Which of the following describes an ATM card?
What type of money is represented by mobile payment apps?
Why are bank deposits considered safer than holding cash?
What is a potential drawback of credit?
How does digital money primarily differ from traditional currency?
Which of these represents a common misconception about money?
In which situation is credit most beneficial?
What happens to the value of money during hyperinflation?
What might be the impact of closing bank branches on local businesses?
How does the provision of credit impact economic development?
What percentage of deposits do banks typically hold as cash for withdrawals?
What is the primary source of income for banks?
Which of the following statements is true regarding demand deposits?
If a bank lowers the interest rate on loans, what is likely to happen to the demand for loans?
What happens when a borrower repays a loan with interest?
In the context of loans, what does the term 'interest rate' refer to?
Which of the following best describes the relationship between depositors and borrowers?
If all depositors withdraw their money at the same time, what is this situation called?
What is a potential consequence for a bank if it has a low reserve ratio?
When taking a loan, what factor is most likely considered by banks to assess repayment capability?
Why do banks often charge higher interest rates for loans compared to the interest paid on deposits?
What is the general reason banks require collateral for loans?
Which of the following scenarios would most likely cause a bank to refuse a loan application?
When a bank provides a loan, what must the borrower do to ensure the bank receives interest payments?
What role do loan activities of banks play in economic development?
What does money primarily function as in transactions?
Why is a double coincidence of wants necessary in a barter system?
What is one major advantage of using money over barter?
Which of the following is NOT a function of money?
How does modern currency differ from historical forms of money?
What role does the Reserve Bank of India play in the context of money?
Which of the following best explains the term 'demand deposits'?
What is the primary reason why people prefer to hold money as deposits in banks?
Which of the following is a key characteristic of modern currency?
What does the term 'legal tender' mean in the context of money?
In a barter system, what problem does the double coincidence of wants create?
Why can't individuals legally refuse a payment made in the local currency in India?
How does the introduction of money change economic transactions?
What is typically included in the 'terms of credit'?
Why do farmers usually seek loans at the beginning of the crop season?
What is collateral in a loan agreement?
What can increase the risk for borrowers in agricultural loans?
What plays a crucial role in a farmer's ability to repay a loan?
Which scenario describes a debt trap?
What factor often makes it difficult for small farmers to obtain loans from banks?
Which of the following is NOT a documented requirement for getting a loan?
What is credit?
What term describes the agreement that outlines loan conditions?
In which situation did Salim use credit?
Which of the following is a characteristic of cooperative credit?
What was Salim's outcome after taking credit?
To improve their credit situation, farmers should focus on which of the following?
What main risk did Swapna face with her loan?
Which farming factor can result in high borrowing costs?
What did Swapna have to do when she couldn't repay her loan?
Why is income from farming vital in loan repayment?
What role does collateral play in credit agreements?
In what scenario can credit help a farmer improve their financial status?
How did the terms of credit affect Swapna's situation?
What should borrowers consider when looking for loans?
What can be a direct consequence of failing to repay a loan?
Which aspect of credit is most likely to vary by lender?
Which factor does not constitute a risk in Swapna's farming business?
Why is timely repayment important in credit agreements?
What financial strategy could help prevent Swapna from getting into a debt trap?
What term refers to the situation where a borrower cannot repay their loan despite making efforts?
Which of the following is considered a formal source of credit in India?
What is the role of the Reserve Bank of India (RBI) concerning banks in India?
Which type of lender operates without any organizational supervision?
Which segment of the population benefits most from loans offered by formal sector banks?
What information do banks need to periodically submit to the RBI?
Which of the following is a disadvantage of borrowing from informal lenders?
What requirement do banks in India have concerning cash balances?
Which of the following informal sources contributes 23% of credit in rural India?
Why is formal credit important for small scale industries?
What is a key difference between formal and informal credit sources?
What can happen if banks do not maintain the required cash balance as per RBI guidelines?
How do small borrowers typically differ in their credit sourcing compared to large businesses?
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