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NCERT Class 10 Economics – Chapter 3: Money and Credit
NCERT-based online test for Board Exam 2026.
- Money acts as a medium of exchange.
- Modern money includes currency and bank deposits.
- Banks accept deposits and give loans.
- Credit plays a vital role in economic activities.
- Formal and informal sources of credit exist.
Q1. Money is mainly used as a:
Store of goods
Medium of exchange
Source of profit
Means of production
Money removes the need for barter.
Q2. Barter system involves:
Direct exchange of goods
Use of currency
Bank deposits
Credit cards
Barter means exchanging goods for goods.
Q3. Modern forms of money include:
Gold only
Silver coins
Currency and deposits
Goods
Currency and bank deposits are modern money.
Q4. Deposits in banks are examples of:
Paper money
Demand deposits
Barter
Credit cards
Deposits can be withdrawn on demand.
Q5. Cheques are used to:
Transfer money
Buy goods only
Store gold
Pay tax
Cheques transfer money from bank accounts.
Q6. Banks accept:
Taxes
Deposits
Gold
Services
Banks accept deposits.
Q7. Banks provide loans from:
Deposits
Taxes
Exports
Profits
Loans are given from deposited money.
Q8. Credit means:
Saving money
Paying cash
Loan given now to be repaid later
Donations
Credit involves future repayment.
Q9. Which institution provides formal credit?
Moneylender
Bank
Trader
Employer
Banks are formal sources.
Q10. Informal credit includes:
Moneylenders
Banks
Cooperatives
Government
Moneylenders are informal sources.
Q11. Credit is useful because it:
Reduces income
Helps in production
Stops trade
Creates losses
Credit supports production.
Q12. High interest rates can lead to:
Debt trap
Development
Savings
Profit
Borrowers may fall into debt trap.
Q13. Formal credit is supervised by:
Moneylenders
Traders
RBI
Farmers
RBI supervises banks.
Q14. SHGs help by:
Increasing debt
Providing cheap loans
Closing banks
Raising taxes
SHGs provide affordable credit.
Q15. Collateral means:
Asset pledged for loan
Interest
Deposit
Income
Collateral secures the loan.
Q16. RBI stands for:
Reserve Bank of Industry
Reserve Bank of India
Rural Bank of India
Revenue Bank
RBI = Reserve Bank of India.
Q17. Formal sector credit includes:
Banks
Moneylenders
Relatives
Employers
Banks are formal sources.
Q18. Which is a risk of informal credit?
Low interest
High interest
Security
Stability
Informal credit charges high interest.
Q19. Credit supports:
Economic activity
Poverty only
Loss
Stagnation
Credit boosts economic activity.
Q20. Which sector uses more formal credit?
Poor households
Large farmers
Labourers
Tenants
Large farmers access banks easily.
Q21. Banks keep a small cash reserve because:
All depositors do not withdraw together
They do not give loans
They store gold
They avoid profit
Not all withdraw at once.
Q22. Which promotes formal credit?
Moneylenders
RBI
Traders
Landlords
RBI regulates formal credit.
Q23. Credit can be harmful if:
Interest is very high
Used properly
Income increases
Investment grows
High interest harms borrowers.
Q24. Which group relies more on informal credit?
Industries
Poor households
Companies
Government
Poor lack bank access.
Q25. Formal credit helps to:
Reduce exploitation
Increase debt trap
Raise interest
Promote moneylenders
Formal credit is safer.
Q26. Which is NOT a formal source?
Bank
Moneylender
Cooperative
Government bank
Moneylender is informal.
Q27. Demand deposits are:
Withdrawable anytime
Locked
Non-monetary
Barter
They can be withdrawn anytime.
Q28. Credit supports farmers by:
Reducing production
Buying inputs
Stopping farming
Selling land
Loans help buy inputs.
Q29. Which institution regulates banks?
RBI
IMF
UN
WHO
RBI regulates banks.
Q30. Credit is important for:
Consumption only
Production and trade
Loss
Debt only
It supports production and trade.
Q31. Which is a formal institution?
Commercial bank
Relatives
Traders
Employers
Banks are formal institutions.
Q32. Credit may lead to debt trap if:
Income increases
Interest is high
Loan is cheap
Profit rises
High interest causes debt trap.
Q33. Which helps increase formal credit?
Banks expansion
Moneylenders
High interest
Informal loans
More banks = more formal credit.
Q34. SHGs mainly help:
Rich farmers
Poor households
Companies
Traders
SHGs support the poor.
Q35. Which ensures safety of deposits?
Bank regulation
Moneylenders
Barter
Trade
Regulation protects depositors.
Q36. Informal lenders charge:
Low interest
High interest
No interest
Fixed interest
They charge high interest.
Q37. Which is true about credit?
It can be both useful and harmful
Always harmful
Always useful
Never needed
Depends on terms of credit.
Q38. Which helps reduce dependence on moneylenders?
High interest
Formal banks
Debt trap
Informal loans
Banks reduce exploitation.
Q39. Which credit source is regulated?
Formal sector
Informal sector
Moneylenders
Traders
Formal credit is regulated.
Q40. Which is NOT collateral?
Land
Interest
House
Vehicle
Interest is not collateral.
Q41. Banks provide credit mainly to:
Those with collateral
Everyone
Only poor
Only rich
Collateral is required.
Q42. Credit can improve living standards if:
Used wastefully
Used productively
Interest is high
No income
Productive use helps.
Q43. Which is safer for borrowers?
Formal credit
Informal credit
Moneylenders
Relatives
Formal credit is regulated.
Q44. Credit supports:
Stagnation
Economic growth
Decline
Unemployment
Credit boosts growth.
Q45. RBI controls credit by:
Supervising banks
Lending directly
Trading
Producing goods
RBI supervises banks.
Q46. Which helps poor get loans?
Moneylenders
SHGs
Traders
Landlords
SHGs help poor.
Q47. Credit is linked with:
Future income
Past income
Loss
Barter
Loans depend on future income.
Q48. Which is a source of cheap credit?
Moneylender
Cooperative bank
Trader
Employer
Cooperatives give cheaper credit.
Q49. Formal credit sector aims to:
Protect borrowers
Exploit borrowers
Charge high interest
Trap borrowers
It protects borrowers.
Q50. Credit plays a vital role in:
Barter system
Economic development
Decline
Stagnation
Credit supports development.
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