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 banking transactions?

1. A.Demonetisation: currency notes in the denomination of Rs 500 and Rs 1,000 were declared invalid and replaced with new currency and digital payment systems.
2. B.Complete nationalisation of all cooperative and private microfinance institutions.
3. C.A total prohibition on the issuance of plastic credit and debit cards.
4. D.The mandatory conversion of all demand deposits into physical gold bars.

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.