Money and Credit

Which among the following banks issues currency notes on behalf of the Central Government in India?

• (a) RBI

• (b) State Bank of India

• (c) Bank of India

• (d) Central Bank of India

An agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment refers to

• (a) Debt

• (b) Deposit

• (c) Credit

• (d) Collateral

Which body (authority) supervises the functioning of formal sources of loans?

• (a) Finance Ministry

• (b) Head Office of each Bank

• (c) Reserve Bank

• (d) Cooperative Societies

Money-lenders usually demand a ‘security’ from the borrower. What is the formal word used for the ‘security’, such as land, vehicle, livestock, building, etc.?

• (a) Deposit

• (b) Collateral

• (c) Credit

• (d) Guarantee

A typical Self Help Group usually has

• (a) 100-200 members

• (b) 50-100 members

• (c) less than 10 members

• (d) 15-20 members

Which of the following is not an informal source of credit?

• (a) Money-lender

• (b) Relatives and Friends

• (c) Commercial Banks

• (d) Traders

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 prevents the poor from getting bank credit?

• absence of collateral
• documentation procedure
• high rate of interest
• none 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

Goods are directly exchanged without the use of money in this system.

• Cooperative system

• Bank system

• Barter system

• Pascal system