Economics Practice Quiz 49

Q1.For rich urban households, what percentage of their loans are from formal sources, according to the information related to Graph 2?

A. 17 per cent B. 54 per cent C. 83 per cent D. 46 per cent

Q2.What pattern is observed in rural areas regarding formal and informal credit for rich versus poor households?

A. Poor households avail cheap credit from formal lenders, while rich households pay more for borrowing. B. Both rich and poor households primarily rely on informal sources. C. Rich households avail cheap credit from formal lenders, whereas poor households have to pay a large amount for borrowing. D. Formal sector meets all credit needs for both rich and poor households.

Q3.In rural areas, approximately what proportion of the total credit needs is met by the formal sector?

A. About three-quarters. B. Only about half. C. Nearly all. D. Less than one-quarter.

Q4.If the formal sector meets only about half of the total credit needs of rural people, how are the remaining credit needs met?

A. Through government grants. B. From international aid. C. From informal sources. D. By reducing consumption.

Q5.Which of the following is a characteristic feature of most loans provided by informal lenders?

A. Very low interest rates B. Significant increase in borrower income C. Very high interest rates D. Strict requirement for government collateral

Q6.What action is necessary for banks and cooperatives, especially in rural areas, to reduce dependence on informal credit?

A. Decrease their lending to avoid risk B. Increase their lending C. Focus only on urban areas D. Introduce new types of collateral

Q7.What is the current distribution pattern of formal credit in society?

A. Formal credit is distributed equally among all households. B. Richer households primarily receive formal credit. C. Poor households primarily receive formal credit. D. Formal credit is unavailable to any household.

Q8.What is identified as one of the major reasons preventing the poor from obtaining bank loans?

A. High income levels B. Presence of excessive collateral C. Absence of proper documents D. Absence of collateral

Q9.What are the typical requirements for obtaining a loan from a bank?

A. Only personal acquaintance with the lender B. Proper documents and collateral C. Absence of any documents D. High interest rates only

Q10.What is a key characteristic of informal lenders that often makes them accessible to borrowers?

A. They always require extensive collateral. B. They are regulated by the Reserve Bank of India. C. They often give loans without collateral. D. They only lend to richer households.

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Economics Practice Quiz 49