Questions & Answers - CBSE Class 10 (60 from NCERT PDF)
20 Short (2M), 20 Medium (4M), 20 Long (8M) based on PDF exercises/content.
Short Questions (2 Marks Each) - 20 Total
1. What is barter? (PDF p.39)
Answer: Direct exchange without money.
2. Double coincidence? (PDF p.39)
Answer: Mutual wants in barter.
3. Modern currency issuer? (PDF p.40)
Answer: RBI.
4. Demand deposits? (PDF p.40)
Answer: Withdrawable bank deposits.
5. Cheque? (PDF p.41)
Answer: Payment instruction paper.
6. Bank cash reserve? (PDF p.42)
Answer: ~5%.
7. Debt-trap? (PDF p.44)
Answer: Unrecoverable debt situation.
8. Collateral? (PDF p.44)
Answer: Loan security asset.
9. SHG members? (PDF p.51)
Answer: 15-20.
10. Grameen members? (PDF p.52)
Answer: 9 million.
11. Demonetisation year? (PDF p.38)
Answer: 2016.
12. NSSO survey round? (PDF p.38)
Answer: 77th, 2019.
13. Formal rural credit %? (PDF p.48)
Answer: ~50%.
14. Informal interest? (PDF p.49)
Answer: Higher.
15. RBI role? (PDF p.48)
Answer: Supervises formal.
16. Yunus Nobel year? (PDF p.52)
Answer: 2006.
17. Krishak members? (PDF p.47)
Answer: 2300.
18. Informal rural %? (PDF p.48)
Answer: ~50%.
19. SHG saving range? (PDF p.51)
Answer: Rs 25-100+.
20. Grameen start? (PDF p.52)
Answer: 1970s.
Medium Questions (4 Marks Each) - 20 Total
1. Barter system limitations? (PDF p.39)
Answer: Requires double coincidence of wants; difficult to find mutual desires. Money eliminates this by acting as intermediate. Example: Shoe manufacturer needs wheat farmer wanting shoes; without, no exchange.
2. Modern currency features? (PDF p.40)
Answer: Paper notes/coins; no intrinsic use; authorised by government (RBI in India); legal tender, cannot refuse. Unlike past (precious metals/grains).
3. Demand deposits as money? (PDF p.40)
Answer: Withdrawable anytime; cheque facility for payments without cash; earn interest; safe. Constitute money with currency in modern economy.
4. Bank loan process? (PDF p.42)
Answer: Keep 5% cash; lend rest at higher interest; difference income. Mediate surplus (depositors) to need (borrowers); manage as not all withdraw same day.
5. Positive credit example? (PDF p.43)
Answer: Salim borrows for shoe order; hires/buys, delivers, profits, repays. Meets working capital, increases earnings.
6. Negative credit example? (PDF p.43)
Answer: Swapna borrows for crop; fails, debt grows, sells land. Debt-trap worsens situation.
7. Terms of credit? (PDF p.44)
Answer: Interest rate, collateral (asset security), docs (proof), repayment mode. Vary; e.g., house loan needs salary docs, property collateral.
8. Rural credit demand? (PDF p.44)
Answer: For crop production (seeds/fertilisers etc.); 3-4 months till harvest; repayment from income, risky if failure.
9. Shyamal credit? (PDF p.46)
Answer: From trader at 3%/month; supplies inputs, forced sell crop low post-harvest.
10. Arun credit? (PDF p.46)
Answer: Bank at 8.5%; repays after harvest, stores for fresh loan against receipt.
11. Rama credit? (PDF p.46)
Answer: From employer at 5%/month; works to repay, owes Rs 5000; landless depend on such.
12. Cooperatives role? (PDF p.47)
Answer: Pool resources; deposits collateral for bank loan; lend for implements/cultivation etc.
13. Formal sources? (PDF p.48)
Answer: Banks/cooperatives; RBI supervises cash/lending; to small cultivators etc.
14. Informal issues? (PDF p.49)
Answer: No supervision; high interest, unfair means; larger earnings part repays.
15. Graph 2 insight? (PDF p.49)
Answer: Poor 54% informal; rich 83% formal; poor pay more.
16. SHG formation? (PDF p.51)
Answer: 15-20 poor/women; save regularly; internal loans low interest; bank-eligible after.
17. SHG benefits? (PDF p.51)
Answer: No collateral; timely/reasonable loans; self-reliant; discuss social issues.
18. Grameen success? (PDF p.52)
Answer: Poor women reliable; income activities; 9M members.
19. Demonetisation? (PDF p.38)
Answer: 2016; invalid notes, promote digital/bank.
20. NSSO data? (PDF p.38)
Answer: Rural debt 2019; formal/informal.
Long Questions (8 Marks Each) - 20 Total
1. High risks credit problems? (PDF p.52, NCERT Q1)
Answer: In high-risk situations, credit can create further problems for the borrower, as seen in Swapna's case where crop failure led to inability to repay the loan from the moneylender, resulting in mounting debt and eventual sale of land to clear it. This is known as a debt-trap, where repayment becomes impossible, pushing the borrower into a cycle of borrowing more to repay old loans, reducing income and assets. In contrast, low-risk credit, like Salim's for production, can improve earnings if successful. The outcome depends on factors like crop success, support systems, and terms of credit. High risks amplify exploitation in informal sectors with high interest (e.g., 60% annual), leading to loss of livelihood. Formal credit with reasonable terms mitigates this, but access is limited for poor. Discuss with examples how credit should be expanded equitably to prevent such traps and promote development.
2. Money solves double coincidence? (PDF p.52, NCERT Q2)
Answer: Money solves the problem of double coincidence of wants by acting as a medium of exchange, allowing people to sell goods for money and then use it to buy what they need, without needing mutual desires in barter. For example, a shoe manufacturer can sell shoes to anyone for money and then buy wheat from a farmer, even if the farmer doesn't want shoes. In barter, exchange requires the shoe maker to find a wheat farmer who exactly wants shoes, which is difficult and time-consuming. Money eliminates this by providing an intermediate step, making transactions efficient. Historically, before money, grains or cattle were used, but modern currency (notes/coins authorised by RBI) is widely accepted as legal tender. This facilitates large-scale economic activities, payments, and growth. Explain with barter limitations and how money's role in daily life (buying/selling) underscores its importance in modern economies.
3. Banks mediate surplus/need? (PDF p.52, NCERT Q3)
Answer: Banks mediate between those with surplus money (depositors) and those who need money (borrowers) by accepting deposits and using a major portion to extend loans, while keeping a small cash reserve (~5%) for daily withdrawals. Depositors earn interest on savings, and borrowers pay higher interest, with the difference being banks' income. For instance, workers deposit extra salary cash, earning interest, and banks lend to businesses for activities. This mechanism ensures funds flow from surplus to deficit, supporting economic growth. Without banks, no demand deposits or cheque payments. RBI supervises to maintain cash balance and direct lending to priority sectors like small industries. Discuss risks (if all withdraw) but regulations prevent; examples like cheque transactions show efficiency. This linkage makes modern money (currency/deposits) functional.
4. 10 rupee note statement? (PDF p.52, NCERT Q4)
Answer: A 10 rupee note states "I promise to pay the bearer the sum of ten rupees" signed by the RBI Governor, meaning it's legal tender authorised by the government, guaranteeing its value and acceptance for transactions in India. This promise legalises the rupee as a medium of payment that cannot be refused. Unlike precious metal coins of the past, modern currency has no intrinsic value but is accepted due to government backing. RBI issues notes on behalf of the central government; no other can issue currency. Explain historical evolution from grains/cattle to metallic coins to paper; in India, refusal of rupees is illegal. This ensures smooth exchanges, eliminating barter issues. Discuss implications for trust in banking system and digital shifts post-demonetisation.
5. Expand formal credit India? (PDF p.52, NCERT Q5)
Answer: We need to expand formal sources of credit in India because they provide cheap, regulated loans (low interest, fair terms) compared to informal (high interest, exploitation), reducing debt-traps and increasing incomes for borrowers, especially poor/rural. Currently, formal meets only ~half rural needs; rest informal leads to higher costs, less enterprise. Expansion via banks/cooperatives/SHGs would allow cheap borrowing for crops/business/industries, boosting development. RBI supervision ensures priority lending to small borrowers. Graph 1 shows moneylenders 23%; poor rely more informal (Graph 2: 54% for poor vs 17% rich). Informal lacks oversight, unfair recovery. Expanding formal distributes equally, empowers poor like through SHGs. Discuss with examples: Arun's bank loan vs Rama's employer loan; aim for inclusive growth.
6. SHGs basic idea? (PDF p.52, NCERT Q6)
Answer: The basic idea behind Self-Help Groups (SHGs) for the poor is to organise them, especially women, into small groups (15-20 members) to pool savings and provide internal loans at reasonable rates, overcoming lack of collateral and bank access, fostering self-reliance and timely credit for self-employment. After regular savings, groups become eligible for bank loans without collateral, as group responsibility ensures repayment. This helps poor escape informal high-interest traps, start income activities (e.g., seeds/assets). Regular meetings discuss social issues (health/violence). Inspired by Grameen Bank (poor women reliable). In India, NABARD supports; empowers financially/socially. Explain formation: Save Rs 25-100; decisions group-made; building blocks for rural poor development.
7. Banks unwilling certain borrowers? (PDF p.52, NCERT Q7)
Answer: Banks might not be willing to lend to certain borrowers, like small farmers or poor without collateral/docs, because they require security (collateral) to recover if default, and proper documentation (income proof) to assess repayment capacity. Poor often lack assets (land/building) or steady income records, making loans risky. In rural India, 80% small farmers need credit for cultivation but banks unwilling due to high default risk from crop failure. They prefer profit-makers with collateral. This pushes poor to informal (moneylenders) with high interest. Discuss solutions: SHGs/cooperatives provide alternatives; RBI directs priority lending. Examples: Megha submits salary/house papers; poor like Rama depend employers.
8. RBI supervises banks? (PDF p.52, NCERT Q8)
Answer: The Reserve Bank of India (RBI) supervises the functioning of banks by monitoring cash reserves (~5% deposits), ensuring lending to priority sectors (small cultivators/industries), and requiring periodic reports on amounts lent, to whom, at what rates. This is necessary to maintain financial stability, prevent failures (e.g., if all withdraw), direct credit for development, and avoid exploitation. RBI issues currency, legalises rupees. Without supervision, banks might lend only to profit-makers, ignoring poor. Contrast with informal (no oversight, high rates). Discuss role in demonetisation/digital push. This ensures smooth system, as money stock is currency + demand deposits.
9. Credit role development? (PDF p.52, NCERT Q9)
Answer: Credit plays a crucial role in development by providing funds for production/enterprise, increasing earnings if successful, but can hinder if risks lead to debt-trap. Positive: Meets working capital (Salim's shoes, profits); enables growth (crops/business). Negative: Failure worsens (Swapna's land sale). Analyse: Formal cheap credit expands incomes, sets industries; informal costly reduces. For India, expand formal/SHGs for poor to borrow reasonably, start activities, reduce inequality. Grameen shows poor reliable for development. Discuss terms (collateral/interest) impact; need equitable distribution for inclusive growth, as poor depend informal (Graph 2).
10. Manav borrow bank/moneylender? (PDF p.52, NCERT Q10)
Answer: Manav, needing loan for small business, will decide based on interest rate (bank lower ~8.5% vs moneylender 60%), terms (collateral/docs needed for bank; moneylender flexible but exploitative), repayment ease (bank structured, moneylender pressure), and access (bank regulated/safer but harder for poor). If Manav has collateral/docs, prefer bank for cheap/safe; else moneylender despite risks. Discuss pros/cons: Bank RBI-supervised, no unfair recovery; moneylender debt-trap possible. For development, promote formal to avoid exploitation.
11. Small farmers credit issues? (PDF p.52, NCERT Q11)
Answer: (a) Banks unwilling to lend small farmers due to lack collateral/docs, high risk from crop failure. (b) Other sources: Informal (moneylenders/traders/employers) high interest. (c) Unfavourable terms: High interest (5%/month), forced sell low, labour-bound; e.g., Shyamal sells to trader. (d) Ways for cheap credit: SHGs pool savings/bank loans; cooperatives low rates; government schemes/RBI priority lending.
12. Fill blanks. (PDF p.52, NCERT Q12)
Answer: (i) Rural (ii) High (iii) RBI (iv) Deposits (v) Collateral. Explain: Rural households informal; high costs burden; RBI issues; banks charge more on loans; collateral guarantee.
13. SHG decisions by? (PDF p.52, NCERT Q13(i))
Answer: In SHG, most decisions on savings/loans by members. (a) Bank (b) Members (c) NGO. Correct: (b). Discuss self-reliance, group responsibility; no external like NGO/bank for internal.
14. Formal not include? (PDF p.52, NCERT Q13(ii))
Answer: Formal sources not include employers. (a) Banks (b) Cooperatives (c) Employers. Correct: (c). Explain formal regulated (banks/coops); employers informal, high interest.
15. Occupations loan purposes? (PDF p.52, NCERT Q14)
Answer: Construction worker: Tools/house. Graduate: Computer/business. Government: House/car. Migrant: Daily needs. Maid: Emergencies. Trader: Stock. Driver: Vehicle. Factory closed: Job search. Classify bank (government/graduate/trader/driver with collateral) vs not (others poor/no collateral). Criterion: Collateral/income stability.
16. Demonetisation impact? (PDF p.38)
Answer: Demonetisation (2016) invalidated Rs 500/1000, replaced; promoted bank deposits/digital (mobile/cheques/ATM/cards/POS); reduced cash, corruption. Debate: Pros (formal shift, transparency); cons (initial disruption). Collage legitimate uses.
17. Grameen Bank details. (PDF p.52)
Answer: Started 1970s Bangladesh; 9M members (poor women); reasonable credit for income activities; reliable borrowers. Yunus: Credit to poor creates wonder. Nobel 2006. Inspires SHGs.
18. Formal vs informal differences. (PDF p.49)
Answer: Formal: Regulated (RBI), low interest, fair; informal: Unregulated, high interest, unfair. Formal expands development; informal debt-traps.
19. Credit reasonable all? (PDF p.49)
Answer: Reasonable credit for all crucial for incomes, enterprises, growth; reduces informal exploitation. Poor benefit most.
20. Informal supervisor? (PDF p.50)
Answer: Supervisor like RBI needed for informal to regulate rates/recovery; task difficult due to vast/unorganised nature.
Practice Tip: 2M: 2min; 4M: 5min; 8M: 12min; use graphs/examples.
