Mock Test of Economic Unit II 4 for STGT
Marks -100 Time-50 Minute
Chung Sajak
- Q: What is money?
Options:
A) Anything widely accepted as payment and debt settlement
B) Only coins and notes
C) Only gold and silver
D) Only bank deposits. - Q: What is the main function of money?
Options:
A) Store of value
B) Medium of exchange
C) Unit of account
D) Standard of deferred payment. - Q: Which function of money measures value?
Options:
A) Medium of exchange
B) Unit of account
C) Store of value
D) Deferred payment. - Q: Which function allows money to be saved?
Options:
A) Medium of exchange
B) Store of value
C) Unit of account
D) Deferred payment. - Q: Money used for future payments is called?
Options:
A) Unit of account
B) Standard of deferred payment
C) Store of value
D) Medium of exchange. - Q: What is liquidity in money?
Options:
A) Ability to float
B) Ease of converting money into goods/services
C) Ability to save money
D) Ability to lend. - Q: Problem without money is?
Options:
A) Inflation
B) Deflation
C) Barter inefficiency
D) Credit problem. - Q: Which function helps compare prices?
Options:
A) Medium of exchange
B) Store of value
C) Unit of account
D) Deferred payment. - Q: Which function helps in trade?
Options:
A) Store of value
B) Unit of account
C) Medium of exchange
D) Deferred payment. - Q: Which function allows postponed payment?
Options:
A) Medium of exchange
B) Store of value
C) Standard of deferred payment
D) Unit of account. - Q: Example of physical money?
Options:
A) Coins and notes
B) Bank balance
C) Digital wallet
D) Credit card. - Q: Example of digital money?
Options:
A) Coins
B) Bank balance
C) Gold
D) Notes. - Q: Does money have intrinsic value?
Options:
A) Always
B) Never
C) Mostly symbolic
D) Only gold coins. - Q: Function affected by inflation?
Options:
A) Medium of exchange
B) Unit of account
C) Store of value
D) Deferred payment. - Q: Money issued by RBI is?
Options:
A) Commodity money
B) Fiat money
C) Digital money
D) Gold coins. - Q: Medium of money in India?
Options:
A) Dollar
B) Pound
C) Indian Rupee (INR)
D) Euro. - Q: Can gold act as money?
Options:
A) No
B) Yes, historically
C) Only now
D) Never. - Q: Is money necessary for a modern economy?
Options:
A) No
B) Yes
C) Optional
D) Only in trade. - Q: Easiest form of money to carry?
Options:
A) Coins
B) Paper money
C) Digital money
D) Gold. - Q: Function of money involving paying debts later?
Options:
A) Store of value
B) Deferred payment
C) Medium of exchange
D) Unit of account. - Q: What is credit?
Options:
A) Earning money
B) Borrowing to repay later
C) Only bank deposits
D) Investing money. - Q: Main purpose of credit?
Options:
A) Avoid saving
B) Facilitate transactions and investment
C) Reduce spending
D) Pay taxes. - Q: Credit helps in which type of purchase?
Options:
A) Immediate purchase
B) Deferred purchase
C) Barter purchase
D) None. - Q: Credit encourages which activity?
Options:
A) Saving
B) Consumption and investment
C) Hoarding
D) None. - Q: Principal in credit?
Options:
A) Interest
B) Original borrowed amount
C) Collateral
D) Repayment. - Q: Interest is?
Options:
A) Original loan
B) Cost of borrowing
C) Collateral
D) Duration. - Q: Collateral is?
Options:
A) Loan
B) Security pledged for loan
C) Principal
D) Interest. - Q: Creditworthiness?
Options:
A) Ability to borrow
B) Ability to repay loan
C) Total wealth
D) Loan duration. - Q: Term/duration in credit?
Options:
A) Interest rate
B) Period for repayment
C) Principal amount
D) Collateral. - Q: Credit helps in which business activity?
Options:
A) Expansion and production
B) Only sales
C) Marketing
D) Saving. - Q: Credit bridges which gap?
Options:
A) Supply-demand gap
B) Temporal gap between income and expenditure
C) Inflation gap
D) Exchange gap. - Q: Short-term credit example?
Options:
A) Home loan
B) Working capital loan
C) Gold loan
D) None. - Q: Long-term credit example?
Options:
A) Working capital loan
B) Home loan
C) Credit card
D) Gold loan. - Q: Credit can be in the form of?
Options:
A) Only money
B) Only goods
C) Money or goods
D) Only digital. - Q: Credit function supporting economic growth?
Options:
A) Consumption
B) Investment facilitation
C) Inflation
D) Saving. - Q: Credit in agriculture is mainly for?
Options:
A) Seeds, fertilizers, machinery
B) Land only
C) Harvesting only
D) None. - Q: Credit in trade is mainly for?
Options:
A) Machinery
B) Buying raw materials and inventory
C) Saving
D) Wages only. - Q: Credit in industry is mainly for?
Options:
A) Advertising
B) Machinery and production
C) Selling only
D) Savings. - Q: Credit in daily life helps in?
Options:
A) Saving
B) Buying essentials and paying later
C) Investing only
D) None. - Q: Does credit increase money circulation?
Options:
A) Yes
B) No
C) Sometimes
D) Never - Q: Principal + Interest = ?
Options:
A) Interest only
B) Total repayment
C) Loan balance
D) Collateral. - Q: What determines interest rate?
Options:
A) Risk, duration, and lender’s policy
B) Borrower’s age
C) Inflation only
D) Collateral type only. - Q: What is unsecured credit?
Options:
A) Credit backed by collateral
B) Credit without collateral
C) Long-term credit only
D) Short-term credit only. - Q: What is secured credit?
Options:
A) Credit with collateral
B) Credit without collateral
C) Only short-term loans
D) Only corporate loans. - Q: Short-term credit duration?
Options:
A) Less than 1 year
B) 1–5 years
C) More than 5 years
D) 6 months–2 years. - Q: Medium-term credit duration?
Options:
A) Less than 1 year
B) 1–5 years
C) 5–10 years
D) More than 10 years. - Q: Long-term credit duration?
Options:
A) Less than 1 year
B) 1–5 years
C) More than 5 years
D) 2–4 years. - Q: What is overdraft facility?
Options:
A) Long-term loan
B) Short-term credit from bank above account balance
C) Collateral-free loan
D) Bill discounting. - Q: What is bill discounting?
Options:
A) Paying bills late
B) Bank gives cash before bill maturity minus interest
C) Credit for goods only
D) Loan for farmers. - Q: What is hire purchase?
Options:
A) Pay full price now
B) Buy goods now, pay in installments
C) Borrow without collateral
D) Microcredit. - Q: What is credit score?
Options:
A) Bank balance
B) Number indicating borrower’s creditworthiness
C) Loan amount
D) Interest rate. - Q: Who assesses creditworthiness?
Options:
A) Government
B) Banks and financial institutions
C) RBI only
D) Borrowers themselves. - Q: What is revolving credit?
Options:
A) Fixed-term loan
B) Credit limit available repeatedly after repayment
C) Collateral-backed loan
D) Only short-term loan. - Q: What is installment credit?
Options:
A) Repayment in fixed schedule
B) Repayment anytime
C) Only short-term credit
D) Only long-term credit. - Q: What is line of credit?
Options:
A) Loan for buying property
B) Pre-approved borrowing limit
C) Microloan only
D) Bank deposit. - Q: What is microcredit?
Options:
A) Small loans to low-income households
B) Corporate loan
C) Agricultural loan
D) Long-term credit. - Q: What is consumer credit?
Options:
A) Loan for personal consumption
B) Loan for corporate investment
C) Loan for government
D) Loan for agriculture. - Q: What is corporate credit?
Options:
A) Loan for business purposes
B) Loan for personal use
C) Microloan
D) Short-term only. - Q: What is refinancing?
Options:
A) Borrowing new loan to replace old debt
B) Paying in installments
C) Bill discounting
D) Short-term loan. - Q: What is interest rate risk?
Options:
A) Risk of default
B) Risk due to changing interest rates
C) Risk of inflation
D) Risk of collateral loss. - Q: Main formal credit provider in India?
Options:
A) Cooperative banks
B) Commercial banks
C) RRBs
D) MFIs - Q: Bank mainly serving rural areas?
Options:
A) Commercial banks
B) Cooperative banks
C) RRBs
D) NBFCs. - Q: Banks focusing on agriculture in India?
Options:
A) Commercial banks
B) Regional Rural Banks (RRBs)
C) NBFCs
D) MFIs. - Q: Institutions providing non-bank financial credit?
Options:
A) Commercial banks
B) NBFCs
C) RRBs
D) Cooperative banks - Q: Small loans to poor households are given by?
Options:
A) NBFCs
B) Microfinance institutions (MFIs)
C) Commercial banks
D) Cooperative banks - Q: Formal credit is regulated by?
Options:
A) Commercial banks
B) Reserve Bank of India (RBI)
C) MFIs
D) NBFCs. - Q: Formal credit requires what?
Options:
A) No documents
B) Documentation and collateral
C) Only collateral
D) Only credit score - Q: Banks provide which type of credit?
Options:
A) Only short-term
B) Only long-term
C) Both short-term and long-term
D) Only microcredit. - Q: Formal credit for small farmers?
Options:
A) Commercial bank loans
B) Cooperative bank loans
C) NBFC loans
D) MFIs. - Q: Credit institutions working with rural poor?
Options:
A) Only RRBs
B) Only MFIs
C) RRBs and MFIs
D) Commercial banks only. - Q: Name an informal source of credit.
Options:
A) Commercial banks
B) Moneylenders
C) Cooperative banks
D) RRBs. - Q: Credit from friends or relatives is called?
Options:
A) Trade credit
B) Personal credit
C) Institutional credit
D) Microcredit. - Q: Traders giving credit to buyers is?
Options:
A) Formal credit
B) Trade credit
C) Microcredit
D) Personal credit. - Q: Indigenous bankers are part of which source?
Options:
A) Formal credit
B) Informal credit
C) Microfinance
D) Cooperative banks. - Q: Interest rates in informal credit are?
Options:
A) Low
B) Fixed
C) High and unregulated
D) Regulated by RBI. - Q: Documentation in informal credit is?
Options:
A) Extensive
B) Minimal
C) Mandatory
D) As per RBI. - Q: Which credit is more accessible in villages?
Options:
A) Formal credit
B) Informal credit
C) Corporate credit
D) Bank loans only. - Q: Which credit can be exploitative?
Options:
A) Formal credit
B) Informal credit
C) Microcredit
D) Bank loans. - Q: Which credit is regulated by RBI?
Options:
A) Formal credit
B) Informal credit
C) Moneylender credit
D) Trade credit. - Q: Which credit promotes rural economy despite high interest?
Options:
A) Formal credit
B) Informal credit
C) Corporate credit
D) Bank loans. - Q: Formal vs informal: which has lower interest?
Options:
A) Formal
B) Informal
C) Both equal
D) Depends on borrower. - Q: Formal vs informal: which is faster?
Options:
A) Formal
B) Informal
C) Both equal
D) Depends on loan. - Q: Formal vs informal: which is documented?
Options:
A) Formal
B) Informal
C) Both
D) Neither. - Q: Credit used for production is called?
Options:
A) Consumption credit
B) Productive credit
C) Personal credit
D) Informal credit. - Q: Credit for consumption is called?
Options:
A) Productive credit
B) Consumption credit
C) Trade credit
D) Microcredit. - Q: Credit helps economy by?
Options:
A) Increasing investment and consumption
B) Reducing production
C) Limiting trade
D) None. - Q: Which source of credit dominates in urban areas?
Options:
A) Informal credit
B) Formal credit
C) Moneylenders
D) Friends and relatives. - Q: Seasonal credit is mainly for?
Options:
A) Industry
B) Agriculture
C) Urban consumption
D) Trade only. - Q: Institutional credit is?
Options:
A) From informal sources
B) Credit from banks and regulated institutions
C) Credit from friends
D) Moneylender loans. - Q: Non-institutional credit is?
Options:
A) From banks
B) Credit from informal sources
C) NBFC credit
D) Microfinance - Q: Example of non-institutional credit?
Options:
A) Bank loan
B) Moneylender loan
C) Cooperative bank loan
D) RRB loan. - Q: Example of institutional credit?
Options:
A) Bank loan
B) Moneylender loan
C) Personal loan from friend
D) Trade credit. - Q: Credit plays a role in which economic sector?
Options:
A) Agriculture only
B) Industry only
C) Services only
D) Agriculture, industry, and services. - Q: Credit creates what in the economy?
Options:
A) Inflation only
B) Money circulation
C) Barter system
D) Trade deficit. - Q: Short-term loans help in?
Options:
A) Investment in machinery
B) Working capital needs
C) Buying land
D) Long-term projects. - Q: Long-term loans help in?
Options:
A) Working capital
B) Investment in machinery, land, and housing
C) Small purchases
D) Temporary needs. - Q: Which credit source requires RBI permission?
Options:
A) Informal credit
B) Formal credit institutions
C) Friends and relatives
D) Moneylenders. - Q: Which credit source is informal and flexible?
Options:
A) Commercial banks
B) Moneylenders and friends
C) RRBs
D) Cooperative banks. - Q: Main aim of credit in economy?
Options:
A) Facilitate growth and trade
B) Reduce spending
C) Hoard money
D) Only lending. - Q: Credit and money together ensure?
Options:
A) Inflation
B) Smooth functioning of economy
C) Only banking growth
D) Barter efficiency
