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.

This CBSE Class 10 Social Science practice quiz has 18 multiple-choice questions on Money and Credit, and 18 of them come with an explanation. Try the 5 sample questions below (tap an option to check yourself), then play the full quiz 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 questions in this quiz

Answers and explanations are in the full quiz.

1. Which of these is NOT a traditional form of money?
2. How does credit from formal financial institutions differ from informal sources?
3. Which institution in India regulates the issue and supply of currency?
4. What does the term 'liquidity' refer to in economics?
5. What factor primarily influences the interest rate on a loan?
6. How can high inflation rates affect lenders?
7. What role do banks play in the creation of money?
8. Which type of credit involves regular monthly payments?
9. How does diversification affect credit risk?
10. What does a credit score of 750 typically imply?
11. How does government intervention typically stabilize the economy during a credit crisis?
12. What distinguishes 'fiat money' from other types of money?
13. Which of the following best describes the correlation between inflation and nominal interest rates?

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