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Table of Contents
MONEY AND CREDIT MCQ FOR NTSE
Basic term
• Currency: Paper notes and coins.
• Cheque: The document instructing the bank to pay a certain sum of money to the person specified from out of the depositors account.
• Collateral: Security against which banks advance loans.
• Demand deposits: Deposits in the bank accounts that can be withdrawn on demand.
• Double coincidence of wants: What a person desires to sell is exactly what the other wishes to buy.
• Formal sector loans: Loans from banks and cooperatives.
• Consumer International: An umbrella body for 240 Consumer Protection Organizations.
• Consumer movement: Movement for protecting and promoting the interests of consumers against unfair trade practices.
• COPRA: Consumer Protection Act.
• Expiry date: The date after which the sale of a medicine or food product is banned.
• MRP: Maximum Retail Price (It is not a price fixed by government).
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• The intervention of money helped in getting over the problem of double coincidence under the barter system. Money became the measure of the value of a commodity and a standard in exchange operations. For those dealing in perishable goods, it became possible to store the value of their products in terms of money.
• Modern economic societies use money in many forms. There are coins. Their real value is not the value engraved on them. Thus the metal in a five rupee coin is not worth five rupees. Paper currency is in the nature of a promissory not issued by the Reserve Bank.
• Credit Cards are examples of plastic money.
• People deposit their savings in banks. They can with draw money from their account when needed. They can even make payments to third parties through cheques. Depositors are paid interest on deposits at rates varying with the type of deposit.
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• Banks keep around 15% of total deposits as ready cash. The rest is lent out to industry and business people at high rates. Banks make profit by offering lower rates of interest to depositors and charging high rates from the borrowers.
• Business people do not always depend on Bank loans for their operations. They even resort to private loans and deferred payments. Credit plays a very important role in business operations. • Banks are reluctant to give loans to small farmers and artisans. They have not much to offer by way of security. The risk of non-payment is high. They have to depend on private moneylenders who charge very high rates of interest.
• People needing a loan from a bank are required to mortgage the car, property or machines that the banks hold as security. In case of default the balance due is recovered by sale of the mortgaged property. The amount of loan is always well below the market value of the pledged goods or property. Loans are given only after the bank is satisfied about the repaying capacity of the borrower.
• Banks also finance higher education. Loans are given to students who get admission to professional colleges. They are to be repaid at the end of the course and after the students have gained employment. In such cases to the banks insist on someone guaranteeing repayment.
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• Big farmers and orchard owners usually meet their credit needs from wholesale merchants. The dealers give advance against standing crops and bind the grower to sell their product only through them. Banks also give advance on grains, etc, stored in their custody.
• Marginal farmers and landless labourers do not get loans from organized banks. They are forced to borrow at high rates of interest from private moneylenders. They are rarely in a position to get out of their debt burdens.
• Cooperative agencies can be very helpful in making finance available to small farmers and artisans. The success o cooperative ventures depend largely on the integrity of the members and the elected managers.
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• Rural households depend on both the formal and the informal sector for their credit needs borrowing from the formal sector is limited to rich families.
• The formal sector like banks functions under the over al supervision of the Reserve Bank. There is urgent need for some regulation in respect of private money lending too People with no security to offer can form self help groups to meet their credit needs. The Grameen banks in Bangladesh are an example of a self help model. In India SEWA (Self Employed Women’s Association – Gujarat) under the guidance of Ela Bhat has been doing good work in providing credit to self-employed women at affordable rates.
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• Banks serve as a bridge between those who can save and those who need money for financing productive projects. Economic development could be meaningful if credit facilities at affordable terms become available even to small peasants, artisans and rural households.
• The individual consumer needs protection from sellers who exploit through a variety of means. Some of these are short weighing, adulteration and sale of defective gadgets. Big manufactures spend huge amounts on publicity and advertisements often making false claims about the efficacy of their products.
• The government needs to take a number of measures to provide protection to consumers.
• It should be made mandatory that responsibility for replacement of defective articles rests with the dealer who accepted payment and not the invisible manufacturer. The consumer should have easy access to a statutory body in case the dealer refuses to honor the warranty or guarantee as the case may be.
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• Consumer movements in India are of recent origin. Protection against exploitation by traders assumed international significance with the setting up of the consumer international. Consumer Protection Act was enacted in India in 1986. Consumer Forums have been set up under an Act on the parliament. These function at the District, State and National levels. Individual consumers can approach these courts directly for claiming compensation for deficiency in service. These court follow a semi-judicial procedure if convinced of deficiency in service, the courts award compensation besides litigation costs and additional fine for causing mental harassment.
• Ordinary consumers have been able to seek redressal through consumer courts even when they were faced with trade giants like Tata Teleservices and Insurance Companies. Appeal against the decision of the district Forum lies with the state Forum. The national level Forum deals with appeals against judgments given by state Forums.
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• Consumer movement is yet to take roots. Customers are often tempted to buy without getting a cash memo. No redressal is possible in such cases even if there is deficiency in service.
• Consumers have the right to be informed about a number of details on packaged goods. They also have the right to chose and cannot be forced to buy any particular ancillary product.
• The passage of Right to information Act has given a further boost to consumer rights. Further the MRP printed on a product should not be taken as the price fixed by the manufacturer or the government. Consumers should bargain as the MRP includes heavy dealer’s discounts.
• One way of ensuring quality is to insist on buying ISI and Agmark products where available. Consumer movement car gain momentum if public opinion asserts its rights and government agencies back up individual or group fights against consumer exploitation.
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1. Introduction of ………..eliminated the need for double coincidence of wants.
(a) Paper
(b) Gold
(c) Computer
(d) Money
Ans. (d)
2. What does modern form of currency include?
(a) Paper notes
(b) Coins
(c) Gold
(d) Both (1) and (2)
Ans. (d)
3. What are ‘demand deposits’?
(a) Deposits with banks kept for at least 10 years
(b) Deposits with bank which can be withdrawn on demand
(c) Deposits in bank in form of jewellery only
(d) All of them
Ans. (b)
4. What is the income of a bank?
(a) Deposits of the depositors
(b) Salary given by government to bank officials
(c) Difference between what is charged from borrowers and what is paid to the depositors.
(d) None of them
Ans. (c)
5. What do you mean by ‘credit’?
(a) Agreement in which the borrower supplies the lender with money, goods and services in return for the promise of future payment.
(b) Agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment.
(c) Agreement in which the lender supplies the borrower with money, goods and services in return for the promise of no future payment.
(d) None of them
Ans. (a)
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6. In rural areas, what is the major reason behind taking the credit?
(a) Telecommunication
(b) Crop production
(c) Establishment of factory
(d) For buying luxuries
Ans. (b)
7. Which of the following are Informal sector loans?
(i) Loan from relative
(ii) Loan from trader
(iii) Loan from moneylender
(iv) Loan from employer
(a) Only option (i)
(b) Only option (ii) and (iv)
(c) Only option (iii) and (i)
(d) All of them
Ans. (d)
8. Is there any organization which supervises the credit activities of lenders in the informal sectors?
(a) Yes
(b) No
(c) Might be
(d) Can’t say
Ans. (b)
9. The cost to the borrower of informal loans is much higher. Is it true?
(a) Yes
(b) No
(c) Might be
(d) Can’t say
Ans. (a)
10. Absence of…..is one of the major reasons which prevent the poor from getting bank loans.
(a) House
(b) Relatives
(c) Collateral
(d) All of them
Ans. (c)
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11. What do you mean by SHG?
(a) Self Help Groups
(b) Service Holder Groups
(c) Self Housing Groups
(d) Soul Harassing Groups
Ans. (a)
12. How many members are there in SHG?
(a) 10-15
(b) 15-20
(c) 20-25
(d) 25-30
Ans. (b)
13. In 1985 what was done by the United Nations to ensure protection of consumer?
(a) UN adopted the UN guidelines for Consumer Protection
(b) UN formed Consumer Councils
(c) UN held exhibitions to spread consumer awareness
(d) None of them
Ans. (a)
14. Which right makes sure that the manufacturer displays all information on the packing of the product?
(a) Right to choice
(b) Right to be informed
(c) Right to be heard
(d) Right against exploitation
Ans. (b)
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15. What happens if the good is found to be defective and the expiry period is not printed on the goods?
(a) Seller gives compensation to the buyer
(b) Manufacturer gave compensation to the buyer
(c) Manufacturer does not take the responsibility of goods
(d) None of them
Ans. (c)
16. What does RTI stand for?
(a) Retail Trade Information
(b) Right to Information
(c) Remedy to Information
(d) None of them
Ans. (b)
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17. What has COPRA led to?
(a) Setting up separate departments of Consumer Affairs in Central and State government
(b) Setting up separate departments of Consumer Affairs in Supreme Courts
(c) Setting up separate departments of Consumer Affairs in High Courts
(d) All of them
Ans. (a)
18. The district level court deals with the cases involving claims up to
(a) 10 lakhs
(b) 20 lakhs
(c) 30 lakhs
(d) 40 lakhs
Ans. (b)
19. What does BIS stand for?
(a) Bank Insurance System
(b) Bureau of Indian Standards
(c) Bold Italic Style
(d) Body Ingredient System
Ans. (b)
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20.
| Column – I | Column – II |
| (A) 1969 | (p) The Prevention of Goods Adulteration Act |
| (B) 1974 | (q) The monopolies and Restive trade produces act |
| (C) 1976 | (r) Consumer protection Act |
| (D) 1986 | (s) Prevention and controls of pollution |
(a) A
(b) A
(c) A
(d) A
Ans. (a)
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21.
| Column – I | Column – II |
| (A) A Accident due to faulty engine in a scoter | (p) Agency that develops standards for goods and services |
| (B) District consumer court | (q) Right to safety |
| (C) Bureau of Indian standards | (r) Right to information |
| (D) Availing details of ingredients of a product | (s) Dealing with consumer cases |
(a) A
(b) A
(c) A
(d) A
Ans. (d)
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22.
| Column – I | Column – II |
| (A) Agemark | (p) Certificate of standardistion welfare |
| (B) Hallmark | (q) Global level institutions of consumer organisation |
| (C) Consumers International | (r) Certificate of edible oil and cereals |
| (D) ISI | (s) Gold and silver products |
(a) A
(b) A
(c) A
(d) A
Ans. (b)
23. Consider the following statements:
(i) Modern forms of money include curry paper rates and coins.
(ii) State bank of India issues currency, notes on behalf of the control government.
(iii) No individual in India can legally refuse a payment made in rupees
(iv) No other organisation except SBI is allowed to issue currency.
Which of the above statements are correct?
(a) (i), (iii) and (iv)
(b) (i) and (iii)
(c) (ii) and (iv)
(d) None of the above
Ans. (b)
24. Consider the following Statements:
(i) ISI mark is given under Bureau of Food standard Act,
(ii) Consumer Protection Act was fraud to restrict sale of luscury goods.
(iii) ISI is the certification mark which is used in the case of food products.
(iv) AGMARK is meant for metal products.
Which of the above statement(s) is/ are correct?
(a) (i), (iii) and (iv)
(b) Only (iii)
(c) All of the above
(d) None of above
Ans. (b)
25. Consider the following Statements:
(i) Reserve Bank India grants loans to commercial banks.
(ii) Prof. Muhammad Yunus was the founder of Grameen Bank.
(iii) Cheque is as example of plastic money.
(iv) Moneylender is on example of Reserve Bank of India.
Which of the above statements are correct?
(a) (i), (iii) and (iv)
(b) (i) and (ii)
(c) (ii) and (iii)
(d) (ii), (iii) and (iv)
Ans. (b)
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PASSAGE-1
While buying many commodities on the cover we can see a logo with the letters ISI, AGMARK or Hallmark. It helps consumers get assured of quality while purchasing the goods and services. Though these goods and services. Though these organisations develop quality standards for many products, it is not compulsory for all producers to follow standards. OPRA is a short term for consumer protection Act which was passed by the government of India in 1986 on 24th December and every gear this day is celebrated as consumers’ day in India. These are 500
Distinct consumer courts in the country.
26. AGMARK is the certification maintained for the standardization of –
(a) Jewellery
(b) Clothes
(c) Food stuffs
(d) Consumer goods
Ans. (d)
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27. Day when COPRA was passed is celebrated as –
(a) Human Rights
(b) Consumers Day
(c) Protection Day
(iv) Indian Day
Ans. (b)
28. How many district consumer courts are there in the country?
(a) 500
(b) 600
(c) 400
(d) 100
Ans. (a)
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PASSAGE-2
Megha has taken a loan of Rs. 5 lakhs from the bank to purchase a house. The annual interest rate on the bank is 12% and the loan is to be repaid in 10 years in monthly installments. Megha had to submit to the bank, documents showing her employment records and salary before the bank agreed to give her the loan the bank relined as collateral the papers of the new house, which will be returned to megha only when she repays the entire loan with interest.
29. What was the loan amount which was taken be Megha?
(a) 5 lakh
(b) 2 lakhs
(c) 1 lakh
(d) 6 lakhs
Ans. (a)
30. What kind of documents are required for the approval of loan?
(a) Employment records
(b) Salary slips.
(c) Both a and
(d) None of them
Ans. (c)
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31. What is the period fixed duration for paying the loan?
(a) 15 years
(b) 5 years
(c) 10 years
(d) 1 year
Ans. (c)
32. Assertion: India is one of the many countries in the world which has exclusive courts for consumer redressal.
Reason: Hallmark is the certification maintained for standardisation of jewellery.
(a) Both A and R are individually true and R is the correct explanation of A.
(b) Both A and R are individually true but R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.
Ans. (b)
33. Assertion: Cheques and demand drafts are also known as modern currency.
Reason: Cheques or demand drafts are widely accepted as a means of payment and it make it possible to directly settle payments without the use of cash.
(a) Both A and R are individually true and R is the correct explanation of A.
(b) Both A and R are individually true but R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.
Ans. (a)
34. Assertion: ISI and AGMARK are logos and certification which help consumers get assured of quality while purchasing goods and services.
Reason LPG cyhaders, food colours and additions, cement, packaged drinking water etc. need certification because it affects the health and safety of consumers.
(a) Both A and R are individually true and R is the correct explanation of A.
(b) Both A and R are individually true but R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.
Ans. (a)
35. What is the correct definition of Self Help Groups?
(a) These are the groups who take loans from banks and give to their members.
(b) The groups who take loans from the money – lenders and then give it to their members.
(c) The groups whose members advance loans to their members and pool up their resources
(d) The groups who are the brokers of the banks.
Ans. (c)
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36. What is correct definition of Hallmark?
(a) It is a logo related to gold and silver products.
(b) It is a logo which gives certification to metal products.
(c) It is a logo which is meant for the food product.
(d) It is a logo meant for agricultural products.
Ans. (a)
37. On the basis of following features identify the correct option.
(i) This act has been passed in 1986.
(ii) According to this Act, a consumer has the right to choose the good among a variety of goods.
(iii) This act advocates that consumers should not pay more than the printed prices.
(iv) It gives protection to consumers from dishonest traders or sellers.
(a) District consumer Act
(b) Essential commodities Act
(c) Environment Protection Act
(d) Consumer protection Act
Ans. (d)
38. On the basis of following features identify the correct option.
(i) It supervises the functioning of formal sources of loan.
(ii) It monitors the banks in maintaining cash balance.
(iii) Periodically other banks have to submit information to into how such they are lending and to whom, at what interest rate etc.
(iv) It is fully owned by government of India and was nationalised in 1949.
(a) Chit fund
(b) Federal Bank
(c) State Bank of India
(d) Reserve Bank of India
Ans. (d)
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ALSO VISIT:
| Also study: | Also study: | Attempt the Quiz | Attempt the Quiz | Attempt the Quiz |
| INDUS VALLEY CIVILIZATION IMPORTANT MCQS | NTSE Syllabus | Indian Economy and globalisation | Quiz on Money and Credit, Consumer rights | Quiz on poverty and food security |
| Basic concepts of economics | Development and people as resource |
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