Competency based MCQ Money and credit

1. Mita produces cake and wants to sell it to people. She also requires flour to make cake, so she wishes to buy flour. Now, Mita is unable to find a person who will exchange flour for cake. Which of the following terms explain the problem that Mita is facing?

a)Lack of trade expertise

b)Double coincidence of wants

c)Irrational consumer behaviour

d)Future expectations

2.A porter making pots wants to exchange pots for rice and he meets a farmer who has rice and is willing to exchange it for the pots. What is this situation known as?

Select the appropriate option:

a)Incidence of wants

b)Double coincidence of wants

c)Barter system of wants

d)None of the above

3. Soma went to bank to deposits extra money at the end of the month. Subha also went to bank to take loan to buy a new car. Bank will satisfy the needs of both of them.

Which among the following statements is true regarding banks?

a)Banks mediate between those who want to sell one commodity in exchange of other commodity.

b)Banks use a major proportion of deposits to invest in mutual funds.

c)Banks charge lower interest rates on loan than the interest rate they offer on deposits.

d)Banks use the deposits to fulfil loan requirements of the people.

 4. Suman went to market by an auto and she paid money to the driver, then she went to a vegetables shop and buys some vegetables and again she given some money to the shop keepers.

Which of the following is a reason why Suman using money to buy goods and services?

a)Money can be easily exchanged for any good or service a person wants.

b)Money is more valuable than any good or service a person wants.

c)Money cannot be put to any other use apart from transaction.

d)Money is less valuable than any good or service a person wants so people easily give money for the goods and services

5. Lohit went to market with his father to buy some books, after completion of purchase his father made the payment through UPI.

What form of money is using here?

a)Bank deposits

b)Currency

c)Both of them  d)None of the these

6. Sumita has surplus money, so she opens a bank account and deposits in it.

Whenever she needs money, she can withdraw from there.

What is the name given to this kind of deposit with the banks?

a)Demand deposit

b)Term deposit

c)Fixed deposit

d)Surplus deposit

7. Gopal submit a paper in the bank that instructs the bank to pay a specific amount (mentioned on that paper) from a person’s account to Gopal.

Name the paper is used by Gopal.

a)Demand deposit

b)Time deposit

C)Bond

D)Cheque

8. Rita and Sita are small farmers. Rita has taken credit of Rs. 20,000 at 1.5% per month from a money lender while Sita has taken the same amount credit at 8%per annum from a bank. Which source of credit is profitable?

A)Money lender, because there is no paperwork.

B) Bank, because interest is less.

C) Money lender, because not asked any collateral.

D)Both are same.

9. Reba is a member of a group, which consists of 15-20 members or more, members pool their savings which acts as collateral to take loan from bank. She can take loans from this group at nominal rate of interest and it is an informal source of credit.

Identify the group to which Reba belong to

A)Farmers cooperative

B)Gramin Bank

C)Self help groups 

D)Club

10. Vikas takes a loan of ₹ 5 lakh from a bank for his production needs. He utilizes the money efficiently, makes a profit, and repays the loan with interest on time as per the credit terms. Identify the role of credit here.

A)Negative role, by helping him to increase his income.

B)Positive role, by helping him to increase his income.

C)Negative role, by helping him to create liability on him.

D)None of the above