NCERT Class 10 Chapter 3 Money and Credit MCQs for UPSC

1. What major monetary policy measure was implemented in India in November 2016 to curb unaccounted cash and promote digital transactions?

1. A.Demonetisation: specified bank notes (SBNs) in the denomination of Rs 500 and Rs 1,000 ceased to be legal tender, replaced by newly designed currency and accelerated digital payment mechanisms (UPI, QR codes, POS).
2. B.Nationalisation of all urban cooperative banks and microfinance institutions.
3. C.A statutory ban on the issuance and usage of debit and credit cards.
4. D.Compulsory conversion of all commercial bank demand deposits into sovereign gold bonds.

2. In economics, what is meant by the 'double coincidence of wants', and how does money overcome this limitation?

1. A.A condition where two banks agree to exchange foreign currencies at a pegged exchange rate.
2. B.An essential feature of a barter system where what a person desires to sell is exactly what the other wishes to buy, which money eliminates by acting as an intermediate medium of exchange.
3. C.A situation where a borrower holds two simultaneous mortgages on the same property.
4. D.An agreement between two merchants to fix minimum retail commodity prices.

3. Why is modern paper currency widely accepted as a medium of exchange in India even though it is not made of precious metals like gold or silver?

1. A.Because it contains high proportions of industrial copper and nickel alloys.
2. B.Because it is redeemable for equal acreage of agricultural land on demand.
3. C.Because it is authorised by the Central Government, issued exclusively by the Reserve Bank of India, and legalised as a medium of payment that cannot be legally refused in settling transactions in India.
4. D.Because all commercial retail shops are owned directly by the state government.