Economics Practice Quiz 48

Q1.According to Graph 1, 'Sources of Credit in Rural India, 2019', what was the largest source of formal credit for rural households in India?

A. Cooperative Banks and Society B. Other Formal Agencies C. Commercial Banks D. Moneylenders

Q2.Based on Graph 1, 'Sources of Credit in Rural India, 2019', which informal source provided the highest percentage of credit to rural households in India?

A. Relatives and Friends B. Moneylenders C. Other Informal Agencies D. Landlords

Q3.According to Graph 1, 'Sources of Credit in Rural India, 2019', what was the approximate total percentage of credit to rural households that came from the formal sector?

A. 34% B. 51% C. 66% D. 23%

Q4.What is a characteristic feature of interest rates in the informal credit sector?

A. They are strictly regulated by the RBI. B. They are generally lower than formal sector rates. C. Lenders can charge whatever interest rate they desire. D. They are fixed by government policies.

Q5.Banks are required to periodically submit information to the Reserve Bank of India (RBI) regarding which of the following aspects of their lending activities?

A. The number of new branches opened. B. The amount lent, to whom, and at what interest rate. C. The total number of employees hired. D. Their daily profit margins from all operations.

Q6.What is a key characteristic of informal lenders compared to formal lenders, as per the provided text?

A. They offer lower interest rates on loans. B. They provide loans primarily for agricultural purposes. C. They charge a much higher interest on loans. D. They are regulated by government bodies.

Q7.What can be a direct consequence of a high interest rate for borrowing, leading to the amount to be repaid being greater than the borrower's income?

A. Increased savings and investment. B. Higher income for the borrower. C. Increasing debt and debt trap. D. Expansion of new enterprises.

Q8.What effect does the high cost of borrowing have on people wishing to start an enterprise, according to the provided text?

A. It encourages them to borrow more for expansion. B. It may deter them from starting an enterprise. C. It leads to immediate higher profits. D. It ensures easier access to formal credit.

Q9.What is crucial for a country's development, as per the text, and what institutions are recommended to lend more to achieve this?

A. High interest rates; private moneylenders. B. Cheap and affordable credit; banks and cooperative societies. C. Strict repayment policies; informal lenders. D. Government subsidies; international organizations.

Q10.According to Graph 2 mentioned in the text, what percentage of loans taken by poor households in urban areas are from informal sources?

A. 17 per cent B. 54 per cent C. 83 per cent D. 49 per cent

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Economics Practice Quiz 48