Economics Practice Quiz 50

Q1.What is stated about the presence of banks in rural India, contributing to the poor's dependence on informal credit?

A. Banks are present everywhere in rural India. B. Banks are not present everywhere in rural India. C. Banks only operate in urban areas. D. Banks are easily accessible to all rural households.

Q2.How does the text describe the difficulty of obtaining a loan from a bank compared to an informal source?

A. Getting a bank loan is much easier. B. Getting a bank loan is much more difficult. C. Both are equally difficult. D. Informal loans are impossible to get.

Q3.What is the primary benefit for the poor if formal credit is distributed more equally?

A. They will have to pay higher interest rates. B. They can benefit from cheaper loans. C. They will no longer need any loans. D. They will become informal lenders themselves.

Q4.According to the provided text, which of the following is NOT a characteristic practice of moneylenders?

A. Charging very high rates of interest B. Keeping detailed records of transactions C. Harassing poor borrowers D. Providing loans without collateral

Q5.In recent years, what newer way of providing loans to the poor has been tried out?

A. Direct government subsidies B. Large-scale corporate loans C. Self Help Groups (SHGs) D. International aid organizations

Q6.What is the typical membership size of a Self Help Group (SHG)?

A. 5-10 members B. 15-20 members C. 30-40 members D. 50-100 members

Q7.Under what condition does a Self Help Group (SHG) become eligible for availing a loan from a bank?

A. After all members have acquired collateral B. After completing a government-mandated training program C. After a year or two of regular savings D. After achieving 100% literacy among its members

Q8.What is the primary purpose of a bank loan sanctioned in the name of a Self Help Group (SHG)?

A. To provide personal consumption loans to members B. To create self-employment opportunities for the members C. To fund large-scale infrastructure projects D. To repay earlier high-interest loans from moneylenders

Q9.What is the typical range of saving per member in a Self Help Group (SHG)?

A. Rs 10 to Rs 20 B. Rs 25 to Rs 100 or more C. Rs 150 to Rs 200 D. Rs 500 to Rs 1000

Q10.Why are banks willing to lend to poor women organised in Self Help Groups (SHGs) even without collateral?

A. Because the government guarantees all SHG loans. B. Because SHGs primarily consist of women. C. Because the group itself is responsible for the repayment of the loan. D. Because SHGs have a high rate of business success.

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Economics Practice Quiz 50