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1.

1) Double coincidence of wants means ____________.

a)

a) what a person desires to sell is exactly what the other person wishes to buy.

b)

b) what a person desires to sell is exactly what the other person also wishes to sell.

c)

c) what a person desires to buy is exactly what the other person also wishes to buy.

d)

d) None of the above.

2.

2) In a barter system where goods are directly exchanged without the use of money, double coincidence of wants is an essential feature.

a)

a) False

b)

b) True

3.

3) In India, _____________ issues currency notes on behalf of the Central Government.

a)

a) Reserve Bank of India (RBI)

b)

b) Ministry of Finance

c)

c) Finance Commission

d)

d) None of the above

4.

4) Banks in India these days hold about _________ of their deposits as cash.

a)

a) 25 percent

b)

b) 20 percent

c)

c) 15 percent

d)

d) 5 percent

5.

5) Banks use the major portion of the deposits to ______.

a)

a) extend loans

b)

b) invest in infrastructure

c)

c) deposit in foreign banks

d)

d) None of the above

6.

6) The difference between what is charged from borrowers and what is paid to depositors is the main source of banks income.

a)

a) true

b)

b) false

7.

7) In rural areas, the main demand for credit is for ________.

a)

a) purchasing land

b)

b) purchasing house

c)

c) medical expenses

d)

d) crop production

8.

8) Which of the following is an example of collateral?

a)

a) Live stocks

b)

b) Land

c)

c) Deposits with banks

d)

d) All of the above

9.

9) What are the different components of the terms of credit?

a)

a) Interest rate

b)

b) Documentation requirements

c)

c) Collateral

d)

d) All of the above

10.

10) Which of the following statements are true?

a)

a) As per Indian law, apart from RBI, no other individual or organisation is allowed to issue currency.

b)

b) The law legalises the use of rupee as a medium of payment that cannot be refused in settling transactions in India

c)

c) No individual in India can legally refuse a payment made in rupees

d)

d) All of the above are true

11.

11) Which of the following are examples of the informal sector loans?

a)

a) Moneylenders

b)

b) Traders

c)

c) Cooperatives

d)

d) Only (a) and (b)

12.

12) As of 2012, the major source of credit to the rural households in India was _______.

a)

a) Moneylenders.

b)

b) Commercial banks.

c)

c) Cooperative societies.

d)

d) Relatives and friends.

13.

13) Which of the following statements are false?

a)

a) There is no organisation which supervises the credit activities of lenders in the informal sector.

b)

b) RBI stops the money lenders from using unfair means to get their money back.

c)

c) Compared to the formal lenders, most of the informal lenders charges much lesser interest on loans

d)

d) Only (b) and (c)

14.

14) Which of the following statements are true?

a)

a) Periodically, banks do not submit information to the RBI on how much they are lending, to whom, at what interest rate, etc.

b)

b) The Reserve Bank of India does not supervise the functioning of formal sources of loans

c)

c) The RBI monitors the banks in actually maintaining cash balance.

d)

d) None of the above statements are true.

15.

15) ___________ of the loans taken by poor households in the urban areas are from informal sources.

a)

a) 85 percent

b)

b) 70 percent

c)

c) 65 percent

d)

d) 50 percent

16.

16) ___________ of the loans taken by rich households in the urban areas are from formal sources.

a)

a) 20 percent

b)

b) 10 percent

c)

c) 15 percent

d)

d) 90 percent

17.

17) ___________ of the loans taken by well-off households in the urban areas are from formal sources.

a)

a) 54 percent

b)

b) 64 percent

c)

c) 72 percent

d)

d) 90 percent

18.

18) ___________ of the loans taken by households with few assets in the urban areas are from informal sources.

a)

a) 72 percent

b)

b) 28 percent

c)

c) 53 percent

d)

d) 47 percent

19.

19) Which of the following could lead to a debt trap?

a)

a) The high interest rate for borrowing can mean that the amount to be repaid is greater than the income of the borrower

b)

b) Higher cost of borrowing means a larger part of the earnings of the borrowers is used to repay the loan.

c)

c) The high interest rate for borrowing can mean that the amount to be repaid is lesser than the income of the borrower.

d)

d) both (a) and (b.)

20.

20) Which of the following statements are correct?

a)

a) Members of a cooperative pool their resources for cooperation in certain areas.

b)

b) Besides banks, the other major source of cheap credit in rural areas are the cooperative societies.

c)

c) There are several types of cooperatives possible such as farmers cooperatives, weavers cooperatives, industrial workers cooperatives.

d)

d) All of the above statements are true.

21.

21) Which one of the following is a formal source of credit?

a)

(a) Traders

b)

(b) Cooperative societies

c)

(c) Moneylenders

d)

(d) Friends and relatives

22.

22) Which one of the following is the appropriate meaning of collateral?

a)

(a) It is the sum total of money borrowed from banks.

b)

(b) The amount borrowed from friends.

c)

(c) It is an asset of the borrower used as guarantee to a lender.

d)

(d) The amount invested in a business.

23.