Money and Credit Quiz - CBSE Class 10 Social Science

Free practice quiz: Money and Credit (CBSE Class 10 Social Science). 18 multiple-choice questions with answers and explanations. Play online, no sign-up needed.

Sample questions

1. What is the primary function of money?

   1. Medium of exchange
   2. Store of value
   3. Standard of deferred payment
   4. Unit of account
   Show answer

   Answer: A. Medium of exchange

   Money primarily serves as a medium of exchange, facilitating transactions.

2. What is one disadvantage of borrowing money informally?

   1. Fixed interest rates
   2. Legal protection
   3. Higher interest rates
   4. Access to credit history
   Show answer

   Answer: C. Higher interest rates

   Informal borrowing often involves higher interest rates than formal borrowing.

3. Which of the following is a secured form of borrowing?

   1. Home loan
   2. Credit card
   3. Payday loans
   4. Personal loans
   Show answer

   Answer: A. Home loan

   Home loans are backed by collateral, making them a secured form of borrowing.

4. What is the impact of a high loan-to-value ratio on risk?

   1. Decreases risk for borrowers
   2. Increases risk for lenders
   3. Has no impact
   4. Decreases risk for lenders
   Show answer

   Answer: B. Increases risk for lenders

   A high loan-to-value ratio indicates a higher risk for lenders since it means less equity from borrowers.

5. Why is collateral important in secured borrowing?

   1. Reduces interest rates
   2. Increases borrowing limit
   3. Protects lenders against default
   4. Ensures quick repayment
   Show answer

   Answer: C. Protects lenders against default

   Collateral mitigates the lender's risk of default by providing an asset that can be seized and sold.

More quizzes

• Sectors of the Indian Economy
• Consumer Rights
• Development
• Globalization and the Indian Economy

Browse all Economics quizzes