3
Economics
Money and Credit
359+ practice questions available
Sample Practice Questions
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1
Medium
What is a 'debt-trap'?
AWhen a person has no debt
BA situation where debt forces the borrower into a cycle of more debt
CWhen a bank refuses to give a loan
DWhen the government cancels all debts
2
Easy
Bank nationalisation in India (1969) was done primarily to:
AExpand banking services to rural areas and the poor
BIncrease bank profits
CReduce the number of banks
DMake banking available only to government employees
3
Medium
During severe hyperinflation, people may stop using the national currency and switch to foreign currency or barter. This happens because money loses its function as a:
AStore of value — money loses purchasing power too rapidly
BMedium of exchange — shops stop accepting it
CUnit of account — prices become meaningless
DAll of the above
4
Medium
Activity-Based Question: You are an SHG member. Your group has decided to take a loan from a bank. Who will sign the loan agreement with the bank?
AOnly the richest member of the group
BThe authorized representatives in the name of the group
CEvery single person in the village
DThe local moneylender
5
Easy
What percentage of deposits do banks in India usually keep as cash?
A5 percent
B15 percent
C50 percent
D100 percent
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