Every question from this NCERT chapter, with a detailed explanation.
Consider the following statements regarding the impact of high cost of borrowing: 1. A larger part of the earnings of the borrowers is used to repay the loan. 2. The repayment amount is always less than the income of the borrower. 3. It may discourage people from starting enterprises due to the debt burden. Which of the statements given above is/are correct?
Consider the following statements regarding the 'Cheque' facility: 1. The payee instructs the bank to withdraw money from the payer's account. 2. It allows for the direct settlement of payments without the use of cash. 3. Cheques are a form of currency issued by the RBI. Which of the statements given above is/are correct?
With reference to the credit needs in rural areas, consider the following statements: 1. The main demand for credit is for crop production. 2. There is no time gap between buying inputs and selling the crop. 3. Repayment of the loan is crucially dependent on the income from farming. Which of the statements given above is/are correct?
Consider the following statements regarding the 'Krishak Cooperative': 1. It does not accept deposits from its members. 2. It uses deposits as collateral to obtain a large loan from the bank. 3. It provides loans for various purposes including house construction. Which of the statements given above is/are correct?
Consider the following statements regarding the supervision of credit activities in India: 1. The World Bank supervises the functioning of formal sources of loans. 2. There is no organisation that supervises the credit activities of lenders in the informal sector. 3. Banks are not required to share any lending information with the RBI. Which of the statements given above is/are correct?
With reference to Cooperative Societies, consider the following statements: 1. They are a major source of cheap credit in rural areas. 2. Members operate individually without pooling resources. 3. Cooperatives cannot obtain loans from banks; they must rely solely on member deposits. Which of the statements given above is/are correct?
With reference to the 'Reserve Bank of India', consider the following statements: 1. It issues currency notes on behalf of private banks. 2. It supervises the functioning of formal sources of loans. 3. It does not directly provide loans to farmers. Which of the statements given above is/are correct?
Consider the following statements regarding 'Money': 1. Modern currency has intrinsic value like gold coins. 2. It acts as a medium of exchange. 3. It is accepted based on social custom, not government authorization. Which of the statements given above is/are correct?
What is the primary benefit of 'Self-Help Groups' for women?
With reference to the 'Terms of Credit', consider the following statements: 1. Terms of credit refer only to the interest rate. 2. The mode of repayment is a component of the terms of credit. 3. Terms of credit vary substantially from one credit arrangement to another. Which of the statements given above is/are correct?
With reference to the 'modern banking system', consider the following statements: 1. Banks mediate between those who have surplus funds and those who are in need of these funds. 2. Banks keep the entire deposit amount as cash to ensure liquidity. 3. Depositors cannot withdraw money until a fixed lock-in period is over. Which of the statements given above is/are correct?
Consider the following statements regarding 'Demand Deposits': 1. They are called demand deposits because they can be withdrawn on demand. 2. They are not considered as money in the modern economy. 3. They can be used for making payments through cheques. Which of the statements given above is/are correct?
With reference to the 'Informal Sector' loans, consider the following statements: 1. It consists mainly of banks and cooperatives. 2. There is no organisation to supervise their credit activities. 3. They often lend without collateral based on personal knowledge of the borrower. Which of the statements given above is/are correct?
Why is the supervision of the Reserve Bank of India necessary for formal sources of loans? Statements: 1. To ensure banks lend exclusively to large industries. 2. To ensure banks maintain the required cash balance. 3. To set the interest rates for informal moneylenders. Which of the statements given above is/are correct?
Consider the following statements regarding the 'Self-Help Groups' (SHGs): 1. They are the building blocks of the organisation of the rural poor. 2. They increase the financial dependence of women on moneylenders. 3. They encourage members to save small amounts regularly. Which of the statements given above is/are correct?
Which of the following financial intermediaries operates on the principle of charging a higher interest rate on loans than what is offered on deposits?
With reference to the functioning of Self-Help Groups (SHGs), who takes the important decisions regarding savings and loan activities?
With reference to the 'Formal Sector' of credit, consider the following statements: 1. It includes moneylenders and landlords. 2. It charges lower interest rates compared to the informal sector. 3. It is less accessible to poor households in urban areas compared to the rich. Which of the statements given above is/are correct?
Consider the following statements regarding the 'Debt Trap': 1. It is a situation where credit pushes the borrower into a painful recovery situation. 2. It is most likely to occur in low-risk activities. 3. It is a common outcome of borrowing from formal sources like banks. Which of the statements given above is/are correct?
With reference to the 'Grameen Bank', consider the following statements: 1. It operates in Bangladesh. 2. It charges exorbitant interest rates. 3. It provides loans without collateral. Which of the statements given above is/are correct?
With reference to Self-Help Groups (SHGs), what is the primary benefit of maintaining regular savings by the group?
In the context of banking operations, the difference between the interest charged from borrowers and the interest paid to depositors represents:
With reference to the evolution of money as a medium of exchange, consider the following statements: 1. Money increases the need for double coincidence of wants. 2. In a barter system, the double coincidence of wants is an essential feature for transactions to occur. 3. The use of metallic coins made of precious metals like gold and silver preceded the use of grain and cattle as money in India. Which of the statements given above is/are correct?
Consider the following statements regarding modern forms of currency in India: 1. Modern currency notes are not made of precious metals. 2. The rupee is accepted because it is made of gold. 3. The law legalises the use of the rupee as a medium of payment that cannot be refused in settling transactions in India. Which of the statements given above is/are correct?
With reference to 'Demand Deposits', consider the following statements: 1. They are fixed deposits that cannot be withdrawn before maturity. 2. They share the essential features of money. 3. The facility of cheques against these deposits makes it possible to settle payments without the use of cash. Which of the statements given above is/are correct?
Consider the following statements regarding the loan activities of banks in India: 1. Banks keep the major portion of deposits as cash reserves. 2. Banks in India currently hold about 15 % of their deposits as cash. 3. The main source of income for banks is the interest paid to depositors. Which of the statements given above is/are correct?
With reference to the concept of 'Debt Trap', consider the following statements: 1. It occurs when credit pushes the borrower into a situation from which recovery is very painful. 2. It is most likely to happen when the borrower has a stable and high income. 3. In a debt trap, the borrower usually has to sell a part of their asset or land to repay the loan. Which of the statements given above is/are correct?
With reference to Self-Help Groups (SHGs), consider the following statements: 1. A typical SHG has 15-20 members, usually belonging to one neighbourhood. 2. Members can take small loans from the group itself, but the group does not charge any interest on these loans. 3. If the group is regular in savings, it becomes eligible for availing a loan from the bank. Which of the statements given above is/are correct?
Consider the following statements regarding the distribution of credit in urban areas: 1. The majority of loans taken by poor households in urban areas are from formal sources. 2. Rich households in urban areas receive the majority of their loans from formal sources. 3. The share of formal sector credit is lower for poor households compared to rich households. Which of the statements given above is/are correct?
Which one of the following concepts is defined as an agreement in which the lender supplies the borrower with money, goods, or services in return for the promise of future payment?
With reference to the role of the Reserve Bank of India (RBI), consider the following statements: 1. It monitors the banks in actually maintaining the cash balance. 2. It ensures that banks give loans only to profit-making businesses and traders. 3. It requires banks to submit periodic information regarding their lending activities. Which of the statements given above is/are correct?
Consider the following statements regarding the informal sector of credit: 1. Informal lenders are bound by government regulations on interest rates. 2. There is no one to stop informal lenders from using unfair means to get their money back. 3. The cost to the borrower of informal loans is generally much higher than formal loans. Which of the statements given above is/are correct?
What is the 'double coincidence of wants'?
Consider the following statements about the 'Barter System': 1. Goods are exchanged for money, which is then used to buy other goods. 2. Double coincidence of wants is an essential feature. 3. It has been replaced by money as the dominant form of exchange. Which of the statements given above is/are correct?
With reference to the credit situation of 'Swapna', consider the following statements: 1. The bumper crop allowed for easy repayment of the loan. 2. Credit pushed her into a situation from which recovery was painful. 3. She was able to repay the loan without selling any assets. Which of the statements given above is/are correct?
Consider the following statements regarding the 'medium of exchange' function of money: 1. It acts as an intermediate step in the exchange process. 2. It requires the shoe manufacturer to find a farmer who wants shoes. 3. It enables the holder of money to exchange it for any commodity or service they want. Which of the statements given above is/are correct?
With reference to the formal sector loans in India, consider the following statements: 1. It consists exclusively of moneylenders and traders. 2. The Reserve Bank of India monitors the cash balance maintained by banks. 3. Formal sector loans do not meet the entire credit needs of rural people. Which of the statements given above is/are correct?
Which of the following is NOT a source of informal credit?
With reference to the 'Terms of Credit', consider the following statements: 1. Collateral is an asset that the lender owns and gives to the borrower. 2. If the borrower fails to repay the loan, the lender has the right to sell the collateral. 3. Property such as land titles and deposits with banks are common examples of collateral. Which of the statements given above is/are correct?
Consider the following statements regarding the necessity of expanding formal sector credit: 1. Informal lenders charge interest rates similar to formal lenders. 2. Higher cost of borrowing means a larger part of earnings is used to repay the loan. 3. High-cost credit is crucial for the country's development. Which of the statements given above is/are correct?
With reference to the functioning of SHGs, consider the following statements: 1. Banks are willing to lend to SHGs once they have a track record of savings. 2. Non-repayment by a member is ignored by the group. 3. Regular meetings of the group provide a platform to discuss social issues. Which of the statements given above is/are correct?