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NCERT Solutions for Social Chapter 3 Money and Credit Class 10 PDF

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NCERT Solutions for Class 10 Social Science Understanding Economic Development Chapter 3 - Money and Credit PDF Download

Economics Class 10 NCERT Solutions Chapter 3 is considered an extremely helpful resource for preparing for Board Exams. Chapter 3 of NCERT Class 10 Economics facilitates knowledge on the two most crucial aspects of the Economy, Money and Credit. In order to be precise, there exist a plethora of concepts related to money and credit. Students must clear their concepts on Ch 3 Economics Class 10 to build a solid foundation.


Class:

NCERT Solutions for Class 10

Subject:

Class 10 Social Science

Subject Part:

Social Science Part  - Understanding Economic Development

Chapter Name:

Chapter 3 - Money And Credit

Content-Type:

Text, Videos, Images and PDF Format

Academic Year:

2023-24

Medium:

English and Hindi

Available Materials:

  • Chapter Wise

  • Exercise Wise

Other Materials

  • Important Questions

  • Revision Notes



With the help of these solutions, you can score good marks in your final examinations. Undoubtedly, nowadays, there are ample learning hacks that allow students to bolster his/her preparation. The Money and Credit Class 10 NCERT Solution are formulated in a simple style that enables a student of any calibre to understand them pretty easily. Subjects like Science, Maths, English ,Hindi and Social Science will become easy to study if you have access to NCERT Solution for Class 10 Science, Maths solutions and solutions of other subjects. You can also download NCERT Solutions for Class 10 Maths to help you to revise complete syllabus and score more marks in your examinations.

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Access NCERT Solutions for Class 10 Social Science (Economics) Chapter 3 – Money and Credit

1. In situations with high risks, credit might create further problems for the borrower. Explain.

Ans:

In situations with high risks, credit might create further problems for the borrower, also known as a debt-trap. Taking credit involves an interest rate on the loan, in case if this is not paid back on time, then the borrower is forced to give up his asset used as the guarantee, to the lender while taking loan. If a farmer takes a loan for crop production and it fails to produce crops, then the loan payment becomes impossible. To repay the loan, the farmer will have to sell a part of his land making the situation quite worse than before. Hence, a situation with high risks, if the risk is affecting a borrower badly, then he will end up losing more in financial terms, than he would have without the loan.

 

2. How does money solve the problem of double coincidence of wants? Explain with an example of your own.

Ans: In a barter system, where goods are exchanged directly without the use of money, double coincidence of wants is an important and essential feature. Money Serves as a medium of exchange, it also removes the need for double coincidence of wants and the difficulties associated with the barter system. For example, now it is not necessary for a farmer to search for a book publisher who will buy his cereals and at the same time sell him books. Now, he has to find a buyer for his cereals. Farmers now can exchange their cereals for money, and can purchase any goods or services which they need.

 

3. How do banks mediate between those who have surplus money and those who need money?

Ans: Banks keep a small portion of deposits informed of cash (15%) for themselves, to pay the depositors on demand. Banks use the major portion of these deposits to give loans to those people who need money. In this way banks mediate between those who have surplus money and those who need money.

 

4. Look at a 10 rupee note. What is written on top? Can you explain this statement?

Ans: “Reserve Bank of India” and “Guaranteed by the Government” are written on top.

In India, the Reserve Bank of India (RBI) issues currency in the country on behalf of the central government. This statement means that the currency is authorized and guaranteed by the Central Government. Law legalizes the use of rupee in India as a medium of payment, which cannot be refused in setting transactions in India.

 

5. Why do we need to expand formal sources of credit in India?

Ans: We need to expand formal sources of credit in India because:  

To reduce dependency on informal sources of credit because the latter charge high interest rates also, they do not benefit the borrower much.

  • Affordable and cheap credit is essential for a country's development.

  • Co-operatives and banks need to increase their lending especially in rural areas.

6. What is the basic idea behind the SHGs for the poor? Explain in your own words.

Ans: The basic objective behind the SHGs is to provide financial resources to the poor people by organizing the rural poor, particularly women, into small Self-Help Groups. They even provide loans at a reasonable rate of interest without collateral.

The main objectives of the SHGs are:

  • To organize rural poor people particularly women into small Self-Help Groups.

  • To collect the savings of their members.

  • To provide loans without collateral.

  • To provide timely loans for various purposes.

  • To provide loans at responsible interest rates and easy terms.

  • Provide a platform to discuss on various issues and act on a variety of social issues like education, health, nutrition, domestic violence etc.

7. What are the reasons why the banks might not be willing to lend to certain borrowers?

Ans: The banks may not lend certain borrowers due to the following reasons:

  • Banks require some necessary documents and collateral as security against loans, some persons fail to meet these requirements.

  • The borrowers who did not repay their previous loans, the banks do not lend them further.

  • The banks may not be willing to lend loans to those entrepreneurs who are going to invest in their business with high risks.

  • One of the main objectives of a bank is to earn more profits. For this purpose, they adopt judicious loan and investment policies which guarantee fair and stable return on the funds.

8. In what ways does the Reserve Bank of India supervise the functions of Banks? Why is this necessary?

Ans: The Reserve Bank of India supervises all the functions of banks in several ways:

  • The commercial banks need to hold a part of their cash, as a reserve with their RBI. RBI ensures that the banks maintain a minimum cash balance limit, from the deposits they receive.

  • RBI observes and ensures that the banks are giving loans not only to profit making businesses owners and traders, also to small industries, small scale cultivators, small borrowers etc.

  • The commercial banks need to submit complete information, regarding how much they are lending, to whom, and at what interest rate etc.to the RBI.

It is required to ensure equality in the economy of the country, especially small depositors, farmers, small scale industries, small borrowers etc. In this process, RBI acts as the lender to the last resort to the banks.

 

9. Analyse the role of credit for development.

Ans: Affordable and Cheap credit is important, it plays a crucial role in the country’s development. Many of us, including businessman, common people, borrow money, so there is a huge demand for loans to carry-out various economic activities. The credit helps us to fulfil the expenses required for their production which further develop their business. Now, Farmers can grow crops, businessmen can do their business, set up industries etc.

 

10. Manav needs a loan to set up a small business. On what basis will Manav decide whether to borrow from the bank or the moneylender? Discuss.

Ans: On the basis of the following terms of credit, Manav will decide whether to borrow from the bank or the money lender:

  • How cheap is the rate of interest the bank is giving on loan?

  • Documentation required by the banker and requirements for the availability of collateral.

  • How flexible is the EMI option, that is, direct cash or account transfer?

  • Depending on these factors, Manav has to decide whether to borrow money from the bank or the moneylender.

11. In India, about 80 percent of farmers are small farmers, who need credit for cultivation.

(a) Why might banks be unwilling to lend to small farmers?

(b) What are the other sources from which the small farmers can borrow?

(c) Explain with an example how the terms of credit can be unfavourable for the small farmer.

(d) Suggest some ways by which small farmers can get cheap credit.

Ans:

a) Farmers, at times they fail to repay the loan amount on time, because of the uncertainty of the crop. Hence, banks may not be willing to lend to small farmers.

b) After banks, the small farmers may borrow money from local money lenders, agricultural traders, cooperatives, big landlords, SHGs etc.

c) The terms of credit can be unfavourable for the small farmer – For example: Ram, a small farmer borrows money from a local moneylender at 3% to grow rice. But unfortunately, the crop is hit by drought and it fails. As a result, Ram has to sell a part of his land to repay the loan. Now, the condition becomes quite worse than before.

d) The small farmers can get a credit at low interest rate from different sources like – Banks, Agricultural Cooperatives, and SHGs.

 

12. Fill in the blanks:

i) Majority of the credit needs of the _______ households are met from informal sources.

ii) ________ costs of borrowing increase the debt-burden.

iii) ________ issues currency notes on behalf of the Central Government.

iv) Banks charge a higher interest rate on loans than what they offer on _________.

v) ________is an asset that the borrower owns and uses as a guarantee until the loan is repaid to the lender.

Ans:

(i) poor

(ii) high

(iii) Reserve Bank of India

(iv) deposits

(v) Collateral

 

13. Choose the most appropriate answer.

(i) In a SHG most of the decisions regarding savings and loan activities are taken by

(a) Bank.

(b) Members.

(c) Non-government organisation.

Ans:

Option (b) Members.

 

(ii) Formal sources of credit does not include

(a) Banks.

(b) Cooperatives.

(c) Employers.

Ans:

Option (c) Employers

 

Score Good Marks with Money and Credit Class 10 NCERT Solutions

Money is an exciting topic, and children are naturally drawn to it. This chapter has therefore been added to Class 10 Economics to satisfy students' interest. The NCERT Answers for Class 10 Economics Chapter 3 in PDF format offer a firm grasp on textbook information. If you want to do well on your tests, the questions in the textbooks will not enough.

 

It would be best if you solved exam-based questions to obtain better marks in your exams. The solutions provided here include 100% precise answers to every question you would find in your NCERT textbook. As a majority of the questions asked in the Class 10 examinations are from the NCERT textbook, you have to solve them carefully. What’s more, the solutions are drafted by the experienced teachers who have been associated with teaching the Class 10 students for years.

 

You will know how to structure your answers throughout the examination if you use the Class 10 Economics Chapter 3 NCERT Solutions. Many students struggle to earn excellent grades in Class 10 Economics despite their talents and intellect since they are unfamiliar with the format. If you utilised these solutions, you would be aware of the exact format in which the responses are to be written. In other words, by appropriately organising your comments, you will have a better chance of impressing the examiner.


NCERT Class 10 Social Science Books Available for:

 

NCERT Class 10 Social Science (Understanding Economic Development) Chapterwise Solutions:

 

NCERT Class 10 Social Science (India and the Contemporary World - II) Chapterwise Solutions:

NCERT Class 10 Social Science (Democratic Politics) Chapterwise Solutions

Advantages of Opting for the NCERT Solutions Class 10 Economics Chapter 3

Note that Economics Chapter 3 Class 10, forms the bulk of questions to be asked in your examinations. Hence, it becomes all the more important to know the right way to answer these questions.

 

  • Created by the Best Teachers

NCERT Solutions for Class 10 Social Science Economics Chapter 3 in the PDF format are created by the best teachers. With their years of experience, they have answered the questions in the right format.

 

  • Use of Lucidly Clear Language

The questions of the Ch 3 Eco Class 10 have been drafted in an easy-to-understand language. There are various terms in Money and Credit, which are difficult to understand without guidance. Luckily, the Ch 3 Economics Class 10 NCERT Solutions are drafted in a simple language.

 

  • Master the Answering Format

By taking the NCERT Solutions of Class 10 Economics Chapter 3, you would master the answering format. With these solutions, there is no risk of writing unnecessary fluff that can result in the deduction of marks.


Important Topics Covered in the Chapter

A few of the important topics that are discussed in this chapter include:

  • Double Coincidence of Wants,

  • Modern Forms of Money,

  • Barter System,

  • Credit situations and more.


Important Points to Take Away from the Chapter

  • In rural areas, high-risk scenarios arise because the primary need for credit is for crop production, which requires significant costs for seeds, fertilisers, pesticides, water, energy, and equipment upkeep.

  • Between the time farmers acquire these inputs and the time they sell the produce, there is at least a three- to four-month gap.

  • Crop loans are often taken out at the start of the season and repaid after harvest.

  • The amount of money needed to repay the loan is mostly determined by the amount of money earned from farming.

  • A small farmer may be forced to sell a portion of his or her land to repay a loan if a harvest fails due to a lack of rain or for any other cause.

  • The failure of harvests adds to the debtors' problems. Credit does not boost his wages; in fact, it makes him worse off. In high-risk scenarios, credit forces the borrower into a debt trap, from which there is no easy way out.

Why Select Economics Ch 3 Class 10 NCERT Solutions by Vedantu?

The solutions to Class 10th Economics Chapter 3 were written by Vedantu's in-house subject matter experts to set your answer sheet out from the others. Furthermore, these answers are given in a straightforward manner, making it simple for pupils to understand. Money and Credit Class 10 NCERT answer also completely adheres to the most recent CBSE curriculum norms. As you can see, preparing at home is much easy with Vedantu's PDF answers.

FAQs on NCERT Solutions for Social Chapter 3 Money and Credit Class 10 PDF

1. What is the Need for NCERT Solutions for Class 10 Economics Chapter 3 Money and Credit?

Ans: The NCERT Solutions Class 10 SST Economics Chapter 3 would help you with deep-rooted preparation for your examinations. Being concise and well-structured, these solutions are your gateway to exam success.

2. How can you Prepare High-Scoring Answers for Money and Credit?

Ans: In order to prepare high-scoring answers, it is imperative that your basics are clear. NCERT Solutions for Class 10 Social Science Economics chapter money and Credit would help you clear your doubts.

3. How vital is it to Follow NCERT Guidelines for Ch 3 Eco Class 10?

Ans: It is quite crucial to follow the NCERT guidelines so that you can score better. The NCERT guidelines would also help you to study smartly and score better grades.

4. What are aspects discussed in NCERT Solutions for Chapter 3 of Class 10 Social Science?

Ans: Chapter 3 of Class 10 Social Science Money and Credit is a very interesting chapter. The main aspect in this chapter is the usage of money in different forms and at different times. This chapter has also given a clear explanation of the modern forms of money and their relationship with the banking systems. The chapter is very well explained in the NCERT Solutions for Class 10 Social Science. The student will be benefited and can prepare very easily.

5. Is it vital to learn about money and credit from NCERT Solutions for Chapter 3 of Class 10 Social Science?

Ans: Yes, it is very important to learn about money and credit from NCERT Solutions for Chapter 3 of Class 10 Social Science because it's an important aspect to know about money and its different forms. Money is also an important factor in the economic development of the country. Learning Chapter 3 of Class 10 Social Science from NCERT Solutions on Vedantu will make the preparation easier for students as each topic’s explanation is in detail.


6. What are the important factors to be analysed to take a loan in setting up a business according to Chapter 3 of Class 10 Social Science?

When considering starting a business and seeking for a loan, one must consider if a loan from a bank or a lender would be more helpful. The next stage is to determine who is interested in both instances. The option should be whoever charges the lowest interest rate. The next step is to calculate the amount and form of repayment to be made to the lender or bank. The next step is to prepare all of the required documentation for loan approval. Before starting, keep the following points in mind.

7. What is credit money according to Chapter 3 of Class 10 Social Science?

Ans: The transactions in which the money is not paid at the same time but in the future as per the agreement between the borrower and the supplier is called credit. The credit plays an important role to meet the expenses of the production and its completion on time and it is a method of increasing the earnings which could have been hindered because of the shortage of money at that particular moment.


8. What do banks do with the money of the investor as explained in Chapter 3 of Class 10 Social Science?

Ans: When the investors deposit the money in the bank, only a small portion of the deposit is kept in the form of cash by the bank. The other portions are given out as loans. There is a demand for loans for different economic activities. The bank charges a higher rate of interest on loans and the interest given to the depositors is less. The difference between the two is the bank's income.