Money and Credit

When a person wants to sell exactly what the other person wants to buy. This situation is known as

• Barter System
• Double coincidence of wants
• Trading
• None of these

What is the form of money in medieval period?

• Cowries
• Paper Notes
• Metallic Coins
• Barter System

A financial institution which accepts deposits from public and provide loans to them.

• Share Market
• Insurance Company
• Banks
• All of these

Debt-trap means :

• Ability to pay back loan
• Extravagance
• None of the above
• Increasing debt

Which one is the following is the important characteristic of modern form of currency?

• It is made from precious metal
• It is made from thing of everyday use
• It is authorized by commercial banks
• It is authorized by the Government of the country

Money can be best described as

• Medium of transaction
• Medium of exchange
• Deposit in Banks
• Payment through cheque

An asset that the borrowers own, and use this as a guarantee to the lender, until the loan is repaid.

• Security
• Collateral
• Property
• All of these

What is the main source of income for banks?

• Interest on loans

• Interest on deposits

• Difference between the interest charged on borrowers and depositors

• None of these

Why do banks keep a small proportion of the deposits as cash with themselves?

• To extend loan to the poor

• To extend loan facility

• To pay salary to their staff

• To pay the depositors who might come to withdraw money

Whether credit would be useful or not depends on

1. whether there is some support in case of loss
2. action of competitors
3. market response
4. risks in the situation

• 1 and 3

• 2 and 4

• 2 and 3

• 1 and 4