Are you a student of class 10th and you are looking for NCERT Solutions Class 10 Social Economics Chapter 3? Because this chapter is very important for the exam. Many questions from this chapter have come in the exam. Because of this, it is very important to know the question and answers of this chapter.
So students, after reading this article, you will get a lot of marks from this chapter in the exam, because the questions related to all the exams have been described in it, so definitely read it completely.
NCERT Solutions for Class 10 Social Economics Chapter 3 Money and Credit
|class | Classes
|CHAPTER | Chapter
|Chapter Name | Chapter Name
|Money and Credit
|board | board
|book | Books
|subject | Subject
|Medium | Moderate
|Study Material | Study Materials
|VVI Question answer
Economics class 10 chapter 3 question answer
Very short answer type questions
1. Give the definition of money.
Answer – In simple words, money means wealth around which all economic activities revolve.
2 What do you mean by credit?
Answer- In simple words, a loan means credit or a loan that is given to needy people on certain conditions so that they can meet their needs.
3 What is barter?
Answer- When the transaction of things is done among themselves without the use of money, then such a system is called barter.
4. Why is money called the medium of exchange?
Answer- Because money acts as an intermediary in the exchange process, hence it is called a medium of exchange.
5. Why is the amount deposited in banks called demand money?
Answer – Because the deposited amount can be obtained on demand.
6 What do you mean by cheque?
Ans- A check is a paper that is drawn on a check from the account of the depositor.An order to pay a specified amount to another person.
7 What is called a supporting credit base?
Answer- A collateral loan is that property (eg- land, property, vehicle, capital) whose borrower owner is the borrower. in lieu of paying off your debtsAnimalThe lender can ask for such guarantee from the borrower.
8 What is meant by the terms of the loan?
Answer – The terms of the loan are named after including the rate of interest, demand for property and documents, methods of payment, etc.
9. What is a formal sector loan?
Answer – Loans taken from banks and cooperative societies are called formal loans.
Short answer type questions
1 How does the use of currency facilitate the exchange of goods?
Answer – In a barter system where goods are exchanged directly without the use of money, a double coincidence of wants is a necessary condition. Money as a medium of exchange removes the need for a double coincidence of wants and the difficulties of the barter system. Thus, the use of money facilitates the exchange of goods. ,
2 Analyze the role of credit in development.
Answer – The role of credit in development-
(a) People who do not have money to run their business, they run their business by taking loans.
(b) Credit plays an important role in the development of the country.
(c) loans to farmers in rural areas and to traders in urban areas and provides special assistance to industrialists.
(d) Loan proves to be very beneficial for ordinary people also. With its help, people can build their houses, and can also buy cars, etc. for commuting. The rate of loan should also be low so that people can easily repay the loan.
3. What fixed intermediation do banks provide between people with excess currency and those in need?
Answer- Generally: Two types of people go to the banks, those who have excess money and the others who need money.
The bank provides an intermediary between these two types of people. Banks give interest to such depositors who have extra money and who are in need of money. Banks get interest from them.
Banks charge high rates of interest from the borrowers of money while they give low rates of interest to the depositors and thus they run their business with the money left with them. The intermediation of banks leads to the welfare of all sections, including the banks themselves.
4 What is the reason that banks are not ready to lend to some borrowers?
Answer- Many times banks are not ready to give loans to some borrowers, the main reasons for this are as follows-
(a) Some borrowers are unable to provide their income certificates to the banks.
(b) Some people do not provide details about their jobs to the banks.
(c) Some people cannot provide collateral in the form of land, animals, property, etc. in lieu of the loan. loan default
(d) Some people cannot bring two guarantors. Who can guarantee to repay their loan?
5. In risky situations, the loan may create more problems for the borrower. Explain.
Ans- (a) Undoubtedly, in a situation, a loan helps in increasing the income, due to which the person’s condition becomes better than before. In other cases, where the risk is high, the loan may create more problems for the borrower.
(b) For example, a person takes a loan for crop production. If for some reason his crop is killed, he is not able to return the loan.
(c) In such a situation, he again takes a loan to repay the loan or is forced to sell his land.
(d) The hazards of the situation thus determine whether the loan will be useful or not.
6 What are the basic ideas behind the organization of Self Help Groups for the poor? Explain in your own words.
Answer- Self-help groups have done a lot of good to the poor and especially to women.
A self-help group consists of 15 to 20 members who deposit their savings every month or some amount by forming a self-sustaining group.
Gradually this deposit amount becomes a huge amount. In times of need, the members of these self-help groups can also take loans from their respective groups.
If such self-help groups keep collecting their extra money for a year, then banks also give money to such groups in the form of loans because they are convinced that groups with 15 to 20 members are cheating. Can’t do it and helping such people will be in the interest of the society and the country.
Especially helping women’s organizations is an act of even more service, so banks are always ready to give loans to such groups. Serving the society is one of the main objectives of the banks.
There is a fear of drowning in the debt of a single person but not of self-help groups of 15 to 20 members.
Q 7. Look at the 10 rupee note. What is written on it? Can you explain this statement?
Answer- If we look at the note of 10 rupees, then it is clearly written on it-
reserve Bank of IndiaGuaranteed by the Central Government I undertake to pay to the bearer Rs. Signaturegovernor reserve bank Explanation of this statement- The meaning of this statement is that the Central Government has empowered the Reserve Bank to print 10 rupee notes on its behalf and the governor of the Reserve Bank promises to the holder of this note that he will print 10 rupee notes.
Will pay him Rs. Without this authority of the Central Government, the 10 rupee note will remain just a piece of paper. This right and permission of the Central Government give this note the form of authorized currency.
8 How does the Reserve Bank of India keep an eye on the activities of other banks? Why is this important?
Answer- The Reserve Bank monitors the economic activities of other banks in the following way-
(a) Every bank maintains a minimum amount of deposit capital with it. reserve BankTakes care that each bank has that minimum amount in its keep it or not.
(b) The Reserve Bank also monitors that the banks are not only giving loans to profit-making units and traders, but they also give loans to small farmers, small industries, and small borrowers so that May the welfare of the common man be done.
(c) The Reserve Bank keeps on receiving this information from various banks continuously. to whom they are giving loans and that no one is doing injustice May this not happen and no one should be cheated.
9. What is the difference between formal and informal sources of credit? Or, explain the main sources of credit.
Answer- The main sources of credit are-
(a) authorized credit,
(b) Informal credit. formal sources of credit-
(a) It includes those sources of credit which are registered by the government. They have to follow government rules and regulations. These sources are banks and cooperative societies.
(b) The Reserve Bank of India monitors the working of formal sources of credit keeps.
(c) Their objective is to earn profit as well as social welfare.
(d) They generally have a lower rate of interest than informal sources of credit. Let’s ask
(e) They do not impose any unreasonable condition.
informal sources of credit
(a) It includes those small and scattered units which are generally outside the control of the government.
Although there are government rules and regulations for these too, they are not followed. These sources are moneylenders, traders, employers, friends, etc. Here
(b) In the informal sector there is no such organization that monitors the credit activities of the lenders.
(c) Their sole objective is to earn profit.
(d) They charge a higher rate of interest on loans than the formal lenders.
(e) They impose many other stringent conditions apart from high-interest rates.
10 Why do we need to increase the formal sources of credit in India?
(a) There are two main sources of credit – formal and informal. Formal loans are those which are obtained from banks or cooperative societies while informal loans are those which are obtained from moneylenders, traders, friends, relatives, etc.
(b) The rate of interest in formal loans is usually modest (8 to 10%) while informal loans are four to six times more expensive.
(c) There is no exploitation of borrowers in formal sources, but borrowers from informal sources have to become victims of exploitation in many ways. If the farmer takes this loan from a trader, he would like the farmer to sell his grain to him at a cheaper price. The above description shows that there is a great need to increase the formal sources of credit in India so that different types of borrowers can get credit at affordable rates and also protect them from exploitation.
11 Why should credit be available to all at reasonable rates?
Answer- Of course, loans should be available to all people at reasonable rates. This is because credit plays an important role in the development of modern business and the country.
In our day-to-day activities, extensive transactions are done through credit in some form or the other. The loan helps the farmers to grow their crops. It is helpful for entrepreneurs to set up business units, meet the working expenses of the production, and complete the production on time. This increases their income.
12. Explain the difficulties of barter.
Answer- The following are the defects or difficulties of the barter system-
(a) An exchange in which payment is to be made in the future represents a serious defect in the barter system. There is a risk of fluctuation in the price of the commodity delivered in the future, due to which there is a possibility of loss to any one party.
(b) Lack of unit of value of goods and services, i.e. if a person needs five meters of cloth and wants to exchange it with the wheat he has, then how much wheat he has to pay for per meter of cloth is not fixed. Finds.
(c) Barter system is a process based on bilateral coincidence i.e. one person seeks another person who wants to sell the same thing that the first person wants to buy. This makes the exchange more complex and time-consuming.
(d) There is no place for a store of value or money in the barter system. In this arrangement, only goods can be stored. Due to this, there is a possibility of spoiling things.
Long answer type questions
1 How does money solve the problem of double coincidence of wants? Explain by giving examples.
Answer – In the barter system, things are exchanged with things and there is no need to use currency. But how difficult it is to do so will be clear from an example. A shoe seller wants to buy wheat.
First, he has to find a person who wants to buy shoes and then he has to see where is such a person, who wants to buy shoes on one side and wants to sell wheat on the other. Thus coincidences are required in this transaction.
First, a person should be found to buy the shoes and secondly, he should be ready to sell the wheat. But with the use of currency, the shoemaker can sell his shoe to anyone and get currency, and with this currency, he can buy wheat from wherever he wants.
In such a situation, the problem of double coincidence does not arise by currency and it is solved automatically.
2. What is the role of banks in the country’s economy?
Answer- Banks play an important role in the country’s economy in many ways-
(a) Banks keep people’s hard-earned money safe by depositing it with them.
(b) Banks not only keep the depositor’s money safe but also pay reasonable interest. Many families depend on this interest of the bank.
(c) Banks act as an intermediary between those who have surplus funds and those who need funds.
(d) Banks also play an important role in increasing the production of the country by giving loans to the farmers. With this money, by increasing their irrigation facilities, farmers can do farming twice or thrice whereas earlier they used to do farming once in a year.
(e) Banks also prove to be very helpful in the development of the industry. People engaged in small-scale industries can upgrade their old industries by taking loans from banks at cheap rates and can also set up many new industries.
(f) By taking a loan from the bank, many traders can expand their business activities and trade in more goods than before.
Q. What is informal credit?
Ans- Loans taken from moneylenders, traders, owners, relatives, friends, etc. are called formal loans.
Q. Give two ways or methods of using money.
(a) Money is used to buy and sell many types of things.
(b) Money can also be used to get different types of services. Is. For example, taking advice from a lawyer, taking advice from a doctor, etc.