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Questions and Answers
What is the term for the exchange of goods for goods?
Who issues currency in India?
What is the primary function of the National Sample Survey Organization?
Who brought the gold mohar coin into circulation?
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Which agency is not included in the informal loan sector or agency?
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What organization conducted the All India Debt and Investment Survey in 2003?
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In a Self Help Group (SHG), who primarily takes decisions regarding savings and loan activities?
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What is a special feature of Gupta coins?
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What is the main source of credit for rich urban households in India?
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What system involves the exchange of goods without using money?
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What percentage of rural households in India was dependent upon money lenders for credit during 2003?
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How many members should a typical self-help group have?
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Who takes the decision in a Self Help Group regarding savings and loan activities?
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What percentage of total deposits do banks hold as cash reserves?
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'Debt Trap' refers to a situation in which:
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What is one special feature that distinguishes the formal sector from the informal sector?
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Study Notes
Economic Concepts
- Barter system refers to the exchange of goods for goods without using money.
- 'Debt Trap' denotes a situation where an individual cannot repay debts due to high-interest rates and ends up borrowing more to cover existing debts.
Currency and Financial Institutions
- The Reserve Bank of India (RBI) is responsible for issuing currency in India.
- The National Sample Survey Organization (NSSO) primarily conducts surveys to collect data on various sectors of the economy, including employment and household consumption.
Historical Context
- The gold mohar coin was brought into circulation by the Gupta Empire, highlighting the significance of trade and coinage in India's history.
- The All India Debt and Investment Survey conducted by the NSSO in 2003 assessed the debt levels and investments of households across the nation.
Loan Sectors and SHGs
- Agencies like banks and formal financial institutions are not part of the informal loan sector, which consists of unregulated money lenders.
- In self-help groups (SHGs), decision-making regarding savings and loan activities is primarily made by the members collectively.
Features of Indian Coins and Credit Sources
- Gupta coins are distinguished by their unique designs and inscriptions, often showcasing the rulers and their achievements.
- The main source of credit for affluent urban households in India is through formal financial institutions like banks rather than informal loans.
Rural Credit Dependency
- In 2003, approximately 40% of rural households in India relied on money lenders for credit, indicating considerable dependence on informal lending.
- A typical self-help group consists of 10 to 20 members, promoting collective savings and financial decision-making.
Banking Reserves
- Banks hold around 4% of total deposits as cash reserves, ensuring liquidity and stability within the banking system.
Formal vs. Informal Sector
- A key feature that distinguishes the formal sector from the informal sector is regulatory oversight; formal sectors are subject to government regulations while informal sectors operate without formal agreements.
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Description
Test your knowledge of Economics Chapter-3 Money and Credit with these 1-mark multiple-choice questions. From barter to currency issuance, challenge yourself with these important concepts.
