Monday 11 January 2021

MCQ of Money & Credit

 Q.1. System of exchanging goods for goods is called :

(a)  monetary system          (b)  credit system

(c)  barter system                (d)  exchange system

Ans. (c)

Q.2. Money

(a)  eliminates  double-coincidence  of wants

(b)  acts as a common measure of value

(c)  acts   as   a   standard   of   deferred payments

(d)  all the above

Ans. (d)

Q.3. At  present  which  form  of  money  is increasingly used apart from paper money?

(a)  Commodity money            (b)  Metallic money 

(c)  Plastic money                    (d)  All the above

Ans. (c)

Q.4. What are the modern forms of money?

(a)  Currency                (b)  Plastic money

(c)  Demand deposits  (d) All the above

Ans. (d)

Q.5. Terms of credit are with respect to :

(a)  interest rate        (b) collateral

(c)  documentation    (d) all the above

Ans. (d)

Q.6. Credit or loan refers to an agreement between :

(a)  lender and borrower              (b)  consumer and producer

(c)  government and tax payer     (d)  all the above

Ans. (c)

Q.7. The  formal  sector  meets  only  about _______  of  the  credit  needs  of  rural people :

(a)  25%                    (b) 52%         (c)  75%                    (d) 15%

Ans. (b)

Q.8. The part of the total deposits which a bank keeps with itself in cash is

(a)  zero                               (b)  a small proportion 

(c)  a big proportion            (d)  100 percent

Ans. (b)

Q.9. An  asset  that  the  borrower uses  as  a repayment guarantee to a lender is termed as a :

(a)  deposit                (b) collateral

(c)  advance              (d) all the above

Ans. (b)

Q.10. Currency is issued in India by :

(a)  commercial banks                   (b)  regional rural banks 

(c)  nationalised banks                   (d)  Reserve Bank of India

Ans. (d)

Q.11. Who supervises the credit activities of lenders in the informal sector?

(a)  Central Bank of India            (b)  Commercial banks

(c)  Moneylenders                       (d)  None

Ans. (d)

Q.12. Rich  households  in  urban  areas  avail cheap credit from

(a)  formal sources   (b)  informal sources

(c)  government        (d)  all the above

Ans. (a)

Q.13. Productive loans by farmers are taken

(a)  to buy seeds, fertilisers, implements etc.

(b)  for celebration of marriages

(c)  for storage of foodgrains in godowns

(d)  none of the above

Ans. (a)

Q.14. Which of the following is not a source of rural credit?

(a)  Regional rural banks            (b)  Moneylenders

(c)  Traders                                 (d)  Government

Ans. (d)

Q.15. Rate of interest charged by moneylenders as compared to that charged by banks is :

(a)  lower                  (b) same

(c)  slightly higher    (d) much higher

Ans. (d)

Q.16. Regional  Rural  Banks  were  set  up  in

(a)  1969                    (b) 1979 (c)  1989                    (d) 1999

Ans. (a)

Q.17. A Self-Help Group usually has :

(a)  5-10 members    (b) 10-15 members

(c)  15-20 members  (d) 20-25 members

Ans. (c)

Q.18. When  was  the  KCC  (Kisan  Credit Card) scheme introduced?

(a)  1969                    (b) 1979

(c)  1987-88              (d) 1998-99

Ans. (d)

Q.19. Which  state  accounts  for  maximum percentage of SHGs (self-help groups) in bank credit?

(a)  Andhra Pradesh (b) Tamil Nadu

(c)  Kerala                 (d) Karnataka

Ans. (a)

Q.20. _________  are  widely  accepted  as  a medium of exchange.

(a)  Rupee notes       (b) Gold coins

(c)  Silver coins        (d) All the above

Ans. (a)

Q.21. Majority of the credit needs of the poor households are met from

(a)  formal sources (b)  informal sources (c)  self-help groups (d)  none of the above

Ans. (b)

Q.22. Who  supervises  the  functioning  of formal sources of loans?

(a)  RBI (Reserve Bank of India) (b)  Central government

(c)  State government                   (d)  None

Ans. (a)

Q.23. Which  of  the  following  is  a  major reason  which  prevents  the  poor from getting bank loans?

(a)  Absence of collateral (security)         (b)  Non-repayment of loans

(c)  Higher interest rates                           (d)  Documentation

Ans. (a)

Q.24. Who helps the borrowers to overcome the problem of lack of collateral?

(a)  Self-help group (SHG) (b)  State government

(c)  Employers                    (d)  Moneylenders

Ans. (a)

Q.25. Formal sources of credit include

(a)  banks                 (b)  moneylenders

(c)  employers          (d)  all the above

Ans. (a)

Q.26. Which of the following is not a modern form of money?

(a)  Paper notes    (b) Demand deposits

(c)  Silver coins    (d)  None of the above

Ans. (c)

Q.27. Which  of  the  following  is  not  an advantage of self-help group?

(a)  Grant of timely loans

(b)  Reasonable interests

(c)  A platform to discuss various issues

(d)  Does not help women to become self- reliant.

Ans. (d)

Q.28. What do you mean by collateral?

(a)  It is the total sum of money with a person

(b)  It is the things kept in the locker

(c)  It is the guarantee given by the lender to the borrower.

(d)  It is the security to a lender until the loan is repaid

Ans. (c)

Q.29. Identify the formal source of credit. 

(a)  Cooperative societies        (b)  Moneylenders

(c)  Traders                              (d)  Landlords

Ans. (a)

Q.30. Which  one  of  the  following  is  not  a modern form of money?    

(a)  Demand Deposits            (b)  Paper currency

(c)  Coins                               (d)  Precious metals

Ans. (d)

Q.31. Which one of the following authorises money as a medium of exchange?

(a)  Reserve Bank of India                     (b)  Self Help Groups

(c)  The Central Government                 (d)  The President of India.

Ans. (a)

Q.32. Which  of  the  following  is  not  true regarding the in convenience of Barter Exchange ?                (a)  Lack of double coincidence of want (b)  Absence of divisibility

(c)  Difficulty in storing wealth

(d)  Availability of money as a medium of exchange.

Ans. (d)

Q.33. Which one of the following is NOT an informal sector loans for poor rural household in India ?    

(a)  Commercial Banks       (b)  Moneylenders

(c)  Traders                         (d)  Landlords

Ans. (a)

Q.34. Which  one  of  the  following  is  the important characteristic of modern form of currency?          (a)  It is made from precious metal

(b)  It is made from thing of everyday use

(c)  It  is  authorised  by  the  commercial banks

(d)  It is authorised by the Government of the country

Ans. (d)

Q.35. Which one of the following constitutes money in modern day economy?

(a)  Gold               (b) Silver      (c)  Interest           (d) Demand Deposits

Ans. (d)

Q.36. In a SHG most of the decisions regarding loan activities are taken by

(a)  Banks                  (b) Member

(c)  Non-government organizations    (d)  Cooperatives

Ans. (b)

Q.37. Which one of the following is a major reason that prevents the poor from getting loans from the banks?

(a)  Lack of capital

(b)  Not  affordable  due  to  high  rate  of interest

(c)  Absence of collateral security

(d)  Absence of mediators

Ans. (c)

Q.38. Which  one  of  the  following  agencies issues currency notes on behalf of the government of India ?        

(a)  Ministry of Finance        (b)  Reserve Bank of India

(c)  State Bank of India         (d)  World Bank

Ans. (c)

Q.39. Formal Sources of credit include : 

(a)  money lenders  (b) co-operatives

(c)  Employers        (d)  Finance companies

Ans. (b)

Q.40. Anything  which  is  generally  accepted by the people in exchange of goods and services is called :            

(a)  money                 (b) barter       (c)  credit                  (d) loans

Ans. (b)

Q.41. Terms of credit does not include : 

(a)  interest rate   (b) collateral

(c)  cheque           (d) mode of repayment

Ans. (c)

Q.42. Banks do not give loans :  

(a)  to small farmers              (b)  to marginal farmers

(c)  to industries                    (d)  without proper collateral and documents

Ans. (d)

Q.43. The functioning of the formal sources of credit are supervised by :

(a)  Government of India (b)  Reserve Bank of India 

(c)  Ministry of finance    (d)  State Bank of India

Ans. (b)

Q.44. Which one of the following is NOT a formal source of credit?    

(a)  Commercial Banks       (b)  State Bank of India

(c)  Employers                     (d)  Co-operatives

Ans. (c)

Q.45. Which  one  of  the  following  is  not included in the terms of credit?

(a)  Rate of Interest              (b)  Mode of payment

(c)  Rate of saving                (d)  Collateral

Ans. (c)

Q.46. Which is not the main source of credit from the following for rural households in India ?        

(a)  Traders (b)  Relatives and friends (c)  Commercial Banks (d)  Moneylanders

Ans. (a)

Q.47. Cheap and affordable credit results in which one of the following ?

(a)  Slow economic growth     (b)  Creating a debt trap

(c)  Poverty                              (d)  Good economic growth

Ans. (d)

Q.48. Deposits in bank accounts withdrawn on demand are called :    

(a)  Fixed deposit    (b)  Recurring deposit (c)  Demand deposit (d)  None of these

Ans. (c)

Q.49. Banks  use  the  major  portion  of  the deposit to :                          

(a)  Keep reserve so that people may withdraw

(b)  Meet their routine expenses

(c)  Extend loans

(d)  Meet renovation of the bank

Ans. (c)

Q.50. When both parties agree to sell and buy each  others  commodities  it  is  known as :                      (a)  measure of value     (b)  double coincidence of wants

(c)  store of value     (d) credit

Ans. (b)

Q.52. Which  among  these  is  an  essential feature of barter system ? 

(a)  Money can easily exchange any commodity

(b)  It is based on double co-incidence of wants

(c)  It is generally accepted as a medium of exchange of goods with money

(d)  It acts as a measure and store of value

Ans. (b)

Q.53. Which one of the following is the main source of credit for the rich households?

(a)  Informal                             (b)  Formal

(c)  Both formal and informal

(d)  Neither Formal nor informal

Ans. (b)

Q.54. Why  bank  deposits  are  known  as demand deposits ?              

(a)  Deposits with the banks

(b) People  have  the  provision  to withdraw the money when they require.

(c) Deposits with the banks cannot be witdrawn.

(d) People  have  the  provision  to withdraw the money only by cash.

Ans. (b)

Q.55. Which  households  take  more  loans from the formal sector ?    

(a)  Poor households and rich household. 

(b)  Well off households and households

with few assets.

(c) Poor  households  and  well  off households

(d) Well  off  households  and  rich households.

Ans. (d)

Q.56. What  portion  of  deposits  are  kept  by the banks for their day to day transaction ?                         (a)  10%                    (b) 15%     (c)  20%                    (d) 25%

Ans. (b)

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