10th Econ Chapter 3 Money and Credit Assignment 2024-25 PDF

***ECONOMICS*** ***CHAPTER-3 MONEY AND CREDIT*** ***ASSIGNMENT -- ANSWER KEY, 2024-25*** +-----------------------+-----------------------+-----------------------+ | ***I. ANSWER THE | | | | FOLLOWING | |...

***ECONOMICS*** ***CHAPTER-3 MONEY AND CREDIT*** ***ASSIGNMENT -- ANSWER KEY, 2024-25*** +-----------------------+-----------------------+-----------------------+ | ***I. ANSWER THE | | | | FOLLOWING | | | | QUESTIONS*** | | | +=======================+=======================+=======================+ | 1. | ***Correct the | 1 | | | incorrect | | | | statement.*** | | | | | | | | Deposit is an | | | | agreement in which | | | | the lender supplies | | | | the borrower with | | | | money, goods, or | | | | services in return | | | | for the promise of | | | | future payment. | | | | | | | | **Ans: *Credit*** is | | | | an agreement in which | | | | the lender supplies | | | | the borrower with | | | | money, goods, or | | | | services in return | | | | for the promise of | | | | future payment. | | +-----------------------+-----------------------+-----------------------+ | 2. | Which one of the | 1 | | | following is not true | | | | about credit? | | | | | | | | A. In rural | | | | households, money | | | | lenders are the | | | | biggest source of | | | | credit for the | | | | people. | | | | | | | | B. Cheap and | | | | affordable credit is | | | | crucial for the | | | | development of the | | | | country. | | | | | | | | **C. Credit can never | | | | push a person into a | | | | debt trap.** | | | | | | | | D. Credit helps | | | | farmers to meet their | | | | expenses of food | | | | grain production. | | +-----------------------+-----------------------+-----------------------+ | 3. | Which one of the | 1 | | | following is not true | | | | about banks? | | | | | | | | A. The Reserve Bank | | | | of India supervises | | | | the functioning of | | | | banks across the | | | | country. | | | | | | | | **B. Banks keep a | | | | major portion of the | | | | deposits as cash with | | | | themselves.** | | | | | | | | C. Banks provide | | | | cheap and affordable | | | | credit. | | | | | | | | D. Banks demand | | | | collateral while | | | | lending. | | +-----------------------+-----------------------+-----------------------+ | 4. | ***Look at the given | 1 | | | picture.*** | | | | | | | | 1\. What is the role | | | | of the bank here? | | | | | | | | ***Answer:*** In this | | | | way, banks mediate | | | | between those who | | | | have surplus funds | | | | (the depositors) and | | | | those who need funds | | | | (the borrowers). | | | | | | | | 2\. Which kind of | | | | credit sector does | | | | bank belong to? | | | | | | | | ***Answer:*** Formal | | | | Sector Credit | | +-----------------------+-----------------------+-----------------------+ | 5. | The data on formal | 1 | | | and informal sector | | | | credit is surveyed by | | | | the National Sample | | | | Survey Organisation | | | | (NSSO) which is now | | | | known as the | | | | ***[National | | | | Statistical Office | | | | (NSO).]** | | | | * | | +-----------------------+-----------------------+-----------------------+ | 6. | In November 2016, | 1 | | | currency notes in the | | | | denomination of Rs. | | | | 500 and Rs. 1,000 | | | | were declared invalid | | | | in India. People were | | | | asked to surrender | | | | these notes to the | | | | bank by a specific | | | | period and receive | | | | new Rs. 500, Rs. | | | | 2,000, or other | | | | currency notes. What | | | | is this act called? | | | | | | | | ***Answer:*** | | | | 'Demonetisation'. | | +-----------------------+-----------------------+-----------------------+ | 7. | The following table | 1 | | | shows the source of | | | | rural households in | | | | India in the year | | | | 2003. | | | | | | | | **Source** | | | | **Sh | | | | are** | | | | ------------------- | | | | ---------------- ---- | | | | ------- | | | | Commercial Bank | | | | 25% | | | | Money lenders | | | | 30% | | | | Co-operative societ | | | | ies 27% | | | | Other (Merchant, Re | | | | latives, etc.) 18% | | | | | | | | Analyzing the table | | | | above, what is the | | | | share of the informal | | | | sector in total | | | | credit? | | | | | | | | A. 25% | | | | | | | | **B. 48%** | | | | | | | | C. 52% | | | | | | | | D. 18% | | +-----------------------+-----------------------+-----------------------+ | 8. | There are two | 1 | | | statements given | | | | below, marked as | | | | Assertion (A) and | | | | Reason (R). | | | | | | | | Read the statements | | | | and choose the | | | | correct option. | | | | | | | | Assertion (A): The | | | | poor have to depend | | | | on informal sources | | | | of credit. | | | | | | | | Reason (R): The | | | | absence of collateral | | | | is one of the major | | | | reasons which | | | | prevents the poor | | | | from getting bank | | | | loans. | | | | | | | | **Options:** | | | | | | | | A. A is true, but R | | | | is false. | | | | | | | | B. A is false, but R | | | | is true. | | | | | | | | **C. Both A and R are | | | | true, and R explains | | | | A.** | | | | | | | | D. Both A and R are | | | | true, but R does not | | | | explain A. | | +-----------------------+-----------------------+-----------------------+ | 9. | Read the following | 1 | | | statements carefully | | | | and choose the | | | | correct alternative | | | | from the following: | | | | | | | | **Statement 1:** The | | | | cost to the borrower | | | | of informal loans is | | | | much higher. | | | | | | | | **Statement 2:** | | | | There is no | | | | organisation that | | | | supervises the credit | | | | activities of lenders | | | | in the formal sector. | | | | | | | | **Alternatives:** | | | | | | | | A. Both the | | | | statements are true. | | | | | | | | B. Both the | | | | statements are false. | | | | | | | | **C. Statement 1 is | | | | true and Statement 2 | | | | is false.** | | | | | | | | D. Statement 2 is | | | | true and Statement 1 | | | | is false. | | +-----------------------+-----------------------+-----------------------+ | 10. | Read the following | 1 | | | statements carefully | | | | and choose the | | | | correct alternative | | | | from the following: | | | | | | | | **Statement 1:** | | | | Modern currency is | | | | accepted as a medium | | | | of exchange. | | | | | | | | **Statement 2:** The | | | | Indian law legalises | | | | the use of rupee as a | | | | medium of payment. | | | | | | | | **Alternatives:** | | | | | | | | **A. Both the | | | | statements are | | | | true.** | | | | | | | | B. Both the | | | | statements are false. | | | | | | | | C. Statement 1 is | | | | true and Statement 2 | | | | is false. | | | | | | | | D. Statement 2 is | | | | true and Statement 1 | | | | is false. | | +-----------------------+-----------------------+-----------------------+ | 11. | Mr. Kishore, an | 2 | | | entrepreneur, wants | | | | to pay 9 lakhs and 80 | | | | thousand to Mr. | | | | Kumar, a TV seller. | | | | Fill up the cheque on | | | | behalf of Mr. | | | | Kishore**.** His A/C | | | | No. is 100020504077. | | | | | | | |  | | +-----------------------+-----------------------+-----------------------+ | 12. | -- ---------------- | 3 | | | --------------------- | | | | --------------------- | | | | --------------------- | | | | ----- --------------- | | | | --------------------- | | | | --------------------- | | | | ------ | | | |  A picture conta | | | | ining text Descriptio | | | | n automatically gener | | | | ated | | | | -- ---------------- | | | | --------------------- | | | | --------------------- | | | | --------------------- | | | | ----- --------------- | | | | --------------------- | | | | --------------------- | | | | ------ | | | | | | | | What kind of | | | | transaction is | | | | depicted in the above | | | | pictures? Explain the | | | | problems the sellers | | | | and buyers face in | | | | this type of | | | | transaction. (Any two | | | | points) | | | | | | | | ***Answer:*** | | | | | | | | **BARTER SYSTEM** | | | | | | | | ***[i) Lack of double | | | | coincidence of | | | | wants]**: | | | | * | | | | Simultaneous | | | | fulfillment of mutual | | | | wants by buyers and | | | | sellers is known as | | | | double coincidence of | | | | wants. The seller has | | | | to find a person who | | | | wants to buy his | | | | goods and at the same | | | | time who must have | | | | what the seller | | | | wants. | | | | | | | | For example: If a | | | | farmer wants to | | | | exchange rice for | | | | cloth, he must find a | | | | weaver who not only | | | | possesses cloth but | | | | is also willing to | | | | exchange cloth for | | | | rice. | | | | | | | | ***[ii) Absence of | | | | common measure of | | | | value:]** | | | | * | | | | In barter system, | | | | each article must | | | | have as many | | | | different values as | | | | there are other | | | | articles for which it | | | | has to be exchanged. | | | | The absence of a | | | | common denominator in | | | | order to express | | | | ratios creates many | | | | difficulties. | | | | | | | | ***[iii) Difficulty | | | | in storing | | | | wealth:]* | | | | ** | | | | It is difficult for | | | | people to store | | | | wealth for future use | | | | in the form of goods | | | | like cattle, wheat, | | | | etc. Holding stocks | | | | of such goods | | | | involves cost for | | | | storage and leads to | | | | deterioration in | | | | quality. | | | | | | | | ***[iv) Lack of | | | | standard for deferred | | | | payment:] | | | | *** | | | | There is a lack of | | | | satisfactory units to | | | | engage in future | | | | contracts. If the | | | | contracts which | | | | involve future | | | | payments are stated | | | | in terms of specific | | | | goods, there can be | | | | disagreements about | | | | the quality of goods, | | | | specific types of | | | | goods, etc. | | +-----------------------+-----------------------+-----------------------+ | 13. | ***Read the given | 3 | | | passage and answer | | | | the following | | | | question.*** | | | | | | | | Mr. Shalem has taken | | | | a house loan of Rs 20 | | | | lakhs from the bank | | | | to purchase a house. | | | | The annual interest | | | | rate on the loan is | | | | 9.5 percent and the | | | | loan is to be repaid | | | | in 15 years in | | | | biannual | | | | installments. Mr. | | | | Shalem had to submit | | | | to the bank, | | | | documents showing his | | | | employment records | | | | and salary | | | | certificate before | | | | the bank agreed to | | | | give him the loan. | | | | The bank retained the | | | | papers of the new | | | | house as collateral, | | | | which will be | | | | returned to Shalem | | | | only when he repays | | | | the entire loan with | | | | interest. | | | | | | | | ***Fill out the | | | | following details of | | | | Shalem's housing | | | | loan.*** | | | | | | | | Loan amount (in Rup | | | | ees) ***20 lakhs*** | | | | ------------------- | | | | ------ -------------- | | | | --------------------- | | | | -------------- | | | | Duration of the loa | | | | n ***15 years*** | | | | Documents required | | | | ***employment | | | | records and salary ce | | | | rtificate*** | | | | Mode of repayment | | | | ***biannual in | | | | stallments*** | | | | Interest rate | | | | ***9.5 percent | | | | per annum*** | | | | Collateral | | | | ***the new hou | | | | se*** | | +-----------------------+-----------------------+-----------------------+ | 14. | Distinguish between | 5 | | | the Central Bank and | | | | Commercial Banks. | | | | | | | | +--------+--------+ | | | | | ***RBI | ***Com | | | | | | or The | mercia | | | | | | Centra | l | | | | | | l | Banks* | | | | | | Bank** | ** | | | | | | * | | | | | | +========+========+ | | | | | 1.It | 1. | | | | | | is | They | | | | | | called | functi | | | | | | the | on | | | | | | apex | under | | | | | | bank, | the | | | | | | that | guidel | | | | | | is | ines | | | | | | bank | of the | | | | | | of all | Centra | | | | | | banks. | l | | | | | | | bank | | | | | | | of the | | | | | | | countr | | | | | | | y. | | | | | +--------+--------+ | | | | | 2. It | 2. | | | | | | contro | They | | | | | | ls | contri | | | | | | the | bute | | | | | | flow | to the | | | | | | of | flow | | | | | | credit | of | | | | | | and | credit | | | | | | money | and | | | | | | | money | | | | | | in the | in the | | | | | | market | market | | | | | |. |. | | | | | +--------+--------+ | | | | | 3. | 3. | | | | | | There | Commer | | | | | | is no | cial | | | | | | public | banks | | | | | | dealin | direct | | | | | | g. | ly | | | | | | | deal | | | | | | | with | | | | | | | the | | | | | | | public | | | | | | | and | | | | | | | depend | | | | | | | on the | | | | | | | same. | | | | | +--------+--------+ | | | | | 4. | 4. | | | | | | It's | Commer | | | | | | the | cial | | | | | | custod | banks | | | | | | ian | have | | | | | | of | no | | | | | | foreig | role | | | | | | n | in it. | | | | | | exchan | | | | | | | ge | | | | | | | | | | | | | | reserv | | | | | | | es | | | | | | | of the | | | | | | | countr | | | | | | | y | | | | | | | and | | | | | | | issues | | | | | | | | | | | | | | curren | | | | | | | cy. | | | | | | +--------+--------+ | | | | | 5. RBI | 5. | | | | | | issues | Commer | | | | | | curren | cial | | | | | | cy | banks | | | | | | notes | have | | | | | | except | no | | | | | | one-ru | author | | | | | | pee | ity | | | | | | coin. | to | | | | | | | issue | | | | | | | curren | | | | | | | cy | | | | | | | notes. | | | | | +--------+--------+ | | +-----------------------+-----------------------+-----------------------+ | 15. | ***Read the source | | | | given and answer the | | | | questions that | | | | follow:*** | | | | | | | | In recent years, | | | | people have tried out | | | | some newer ways of | | | | providing loans to | | | | the poor. The idea is | | | | to organise rural | | | | poor, in particular | | | | women, into small | | | | Self-Help Groups | | | | (SHGs) and pool | | | | (collect) their | | | | savings. A typical | | | | SHG has 15-20 | | | | members, usually | | | | belonging to one | | | | neighbourhood, who | | | | meet and save | | | | regularly. Savings | | | | per member vary from | | | | Rs 25 to Rs 100 or | | | | more, depending on | | | | the ability of the | | | | people to save. | | | | Members can take | | | | small loans from the | | | | group itself to meet | | | | their needs. The | | | | group charges | | | | interest on these | | | | loans but this is | | | | still less than what | | | | the moneylender | | | | charges. After a year | | | | or two, if the group | | | | is regular in | | | | savings, it becomes | | | | eligible for availing | | | | loan from the bank. | | | | Loan is sanctioned in | | | | the name of the group | | | | and is meant to | | | | create | | | | self-employment | | | | opportunities for the | | | | members. For | | | | instance, small loans | | | | are provided to the | | | | members for releasing | | | | mortgaged land, for | | | | meeting working | | | | capital needs (e.g. | | | | buying seeds, | | | | fertilisers, raw | | | | materials like bamboo | | | | and cloth), for | | | | housing materials, | | | | for acquiring assets | | | | like sewing machine, | | | | handlooms, cattle, | | | | etc. Most of the | | | | important decisions | | | | regarding the savings | | | | and loan activities | | | | are taken by the | | | | group members. The | | | | group decides as | | | | regards the loans to | | | | be granted --- the | | | | purpose, amount, | | | | interest to be | | | | charged, repayment | | | | schedule etc. Also, | | | | it is the group which | | | | is responsible for | | | | the repayment of the | | | | loan. Any case of | | | | nonrepayment of loan | | | | by any one member is | | | | followed up seriously | | | | by other members in | | | | the group. Because of | | | | this feature, banks | | | | are willing to lend | | | | to the poor women | | | | when organised in | | | | SHGs, even though | | | | they have no | | | | collateral as such. | | +-----------------------+-----------------------+-----------------------+ | | 15.1. SHGs are the | 1 | | | building blocks of | | | | organisation of the | | | | rural poor. Eliminate | | | | the incorrect | | | | statement given below | | | | regarding SHGs. | | | | | | | | A. The SHGs help | | | | borrowers overcome | | | | the problem of lack | | | | of collateral. | | | | | | | | B. Members can get | | | | timely loans for a | | | | variety of purposes | | | | and at a reasonable | | | | interest rate. | | | | | | | | **C. SHGs have a | | | | large share in | | | | providing loans for | | | | varied activities in | | | | India.** | | | | | | | | D. SHGs help women to | | | | become financially | | | | self-reliant. | | +-----------------------+-----------------------+-----------------------+ | | 15.2. Banks are | 1 | | | willing to lend to | | | | the poor women when | | | | organised in SHGs, | | | | even though they have | | | | no collateral. Give | | | | reason. | | | | | | | | ***Answer:*** | | | | | | | | The SHGs decide | | | | regarding the loans | | | | to be granted --- the | | | | purpose, amount, | | | | interest to be | | | | charged, repayment | | | | schedule, etc. | | | | ***Also, it is the | | | | group which is | | | | responsible for the | | | | repayment of the | | | | loan. Any case of | | | | nonrepayment of loan | | | | by any one member is | | | | followed up seriously | | | | by other members in | | | | the group.*** Because | | | | of this feature, | | | | banks are willing to | | | | lend to the poor | | | | women when organised | | | | in SHGs, even though | | | | they have no | | | | collateral. | | +-----------------------+-----------------------+-----------------------+ | | 15.3. In recent | 2 | | | years, people have | | | | tried out some newer | | | | ways of providing | | | | loans to the poor. | | | | SGHs are one among | | | | them. Justify. | | | | | | | | ***Answer:*** | | | | | | | | a. The idea is to | | | | organise rural | | | | poor, in | | | | particular women, | | | | into small | | | | Self-Help Groups | | | | (SHGs) and pool | | | | (collect) their | | | | savings. | | | | | | | | b. Savings per | | | | member vary from | | | | Rs 25 to Rs 100 | | | | or more, | | | | depending on the | | | | ability of the | | | | people to save. | | | | Members can take | | | | small loans from | | | | the group itself | | | | to meet their | | | | needs. | | | | | | | | c. The group charges | | | | interest on these | | | | loans but this is | | | | still less than | | | | what the | | | | moneylender | | | | charges. | | | | | | | | d. After a year or | | | | two, if the group | | | | is regular in | | | | savings, it | | | | becomes eligible | | | | for availing loan | | | | from the bank. | | | | | | | | e. The loan is | | | | sanctioned in the | | | | name of the group | | | | and is meant to | | | | create | | | | self-employment | | | | opportunities for | | | | the members. | | | | | | | | Thus, SGHs are one of | | | | the newer ways of | | | | providing loans to | | | | the poor. | | +-----------------------+-----------------------+-----------------------+