CBSE Important Questions for Class 10 Economics (2025-26) Chapter 3: Money and Credit, Download PDF

CBSE Important Questions for Class 10 Economics (2025-26) Chapter 3 Money and Credit: The CBSE Class 10 Social Science 2026 Exam is scheduled to be conducted on 7th March 2025 by the Central Board of Secondary Education (CBSE). As the exam date has been released, students should begin thorough preparation and focus on revising important chapters, especially Economics Chapter 3 Money and Credit. 

This chapter plays a vital role in understanding financial systems, formal and informal sources of credit, and the importance of banking in economic growth. To help students prepare effectively, we have compiled CBSE Class 10 Economics Important Questions (2025–26) based on the latest CBSE syllabus and NCERT textbook. Practising these important questions will boost confidence, improve conceptual clarity, and enhance exam performance. Check this article to download the CBSE Important Questions for Class 10 Economics (2025-26) Chapter 3: Money and Credit PDF.

CBSE Class 10 Economics Important Questions: Key Highlights

Students can use these CBSE Class 10 Economics Important Questions to strengthen their understanding of key concepts and enhance their exam preparation. The table below highlights the essential details for Chapter 3: Money and Credit as per the CBSE 2025–26.

Important Questions and Answers for CBSE Class 10 Economics for Chapter 3

Part A (1 Mark Questions)

Q1. Rohan has taken a loan of Rs.5 lakhs from the bank to purchase a house at a 12% rate of interest. He has to submit papers about the new house and salary records to the bank. What is this process called? 

a. Interest Rate 

b. Collateral 

c. Principal Amount 

d. Installments 

Q2. A porter making pots, wants to exchange pots for wheat. Luckily, he meets a farmer who has wheat and is willing to exchange it for pots. What is this situation known as?

a. Incidence of wants 

b. Double incidence of wants 

c. Barter system of wants 

d. None of the above 

Q3. Rita has taken a loan of Rs.7 lakhs from the bank to purchase a car. The annual interest rate on the loan is 14.5 percent and the loan are to be repaid in 3 years in monthly installments. The bank retained the papers of the new car as collateral, which will be returned to Rita only when she repays the entire loan with interest. Analyze the loan information given above, considering one of the following correct options. 

a. Mode of re-payment 

b. Terms of credit 

c. Interest on loan 

d. Deposit criteria 

Q4. Which one of the following is not a modern form of money? 

a) Demand Deposits 

b) Paper currency 

c) Coins 

d) Precious metals

Q5. In India, who issues the currency notes on behalf of the central government? 

a. Reserve Bank of India 

b. State Bank of India 

c. Finance Minister of India 

d. None 

Q6. Which one of the following is the main source of credit for rich urban households? 

a) Moneylenders 

b) Businessmen 

c) Banks 

d) Self Help Groups 

Q7. In a SHG most of the decisions regarding loan activities are taken by

a) Banks 

b) Members 

c) Non-government organization 

d) Cooperative 

Q8. Most agricultural laborers like Mohan depend upon loans from the informal sector. Which of the following statements about this sector is correct 

a. There is govt. bodies to supervise the informal sector 

b. Money lenders ask for a reasonable rate of interest 

c. Cost of informal loans to the borrower is quite high 

d. Money lenders use fair means to get their money back 

Q9. Which of the following is a formal source of credit? 

a) Friends 

b) Relatives 

c) Moneylenders 

d) Co-operative Society 

Q10. Which is major reason that prevents the poor from getting loans from banks? 

a) Lack of capital 

b) Not affordable due to high rate of interest 

c) Absence of collateral security 

d) Absence of mediators 

ASSERTION REASON QUESTIONS

Direction: In each of the following questions there are two statement assertion (A) and reason (R) mark your answer as per code provided below:- 

a) Both statements are true and R is correct explanation of A 

b) Both statements are true but R is not correct explanation of A 

c) A is true R is false 

d) A is false R is true

Q1. ASSERTION: The Reserve Bank of India supervises the functioning of formal sources of loans. 

REASON: The RBI sees that the banks give loans not just to profit-making businessmen and traders but also to small cultivators. 

Q2. ASSERTION: Collateral is an asset that the borrower owns and uses this as a guarantee to a lender until the loan is repaid. 

REASON: Collateral is given so that lender can sell the collateral to recover the loan amount if the borrower fails to repay the loan. 

Part B (2 Mark Questions)

Q1. What are the limitations of Barter system that led to evolutions of money? 

Q2. What is required to get loan from a bank? 

Q3. Is credit useful to everybody?

Q4. What is debt trap. 

Q5. How does money solve the problem of double coincidence of wants? 

Q6. What is collateral? Why do lenders ask for collateral while lending? 

Q7. What is the most essential feature of Barter system? 

Q8. How is money used as a medium of exchange? Explain with examples. 

Q9. What is double coincidence of wants? 

Part C (3 Mark Questions)

Q1.  Amrita is a government employee and belongs to a rich urban household whereas Rani works as a helper on a construction site and comes from a poor rural household. Both have a crisis at home and wish to take loans. Create a list of arguments explaining who between the two would successfully be able to get the loan from a formal source. Why?

Q2. How do Self Help Groups help borrowers to overcome the problem of lack of collateral? Explain.

Q3. Why is the supervision of the functioning of formal sources of loans necessary?

Q4. In what ways RBI supervises the functioning of banks? 

Part D (5 Mark Questions)

Q1. Why is credit a crucial element in economic development?

Or 

Why cheap and affordable credit is important for a country?

Q2. Why do we need to expand formal sources of credit in India? Explain. 

Or

Why are formal sources of credit preferred over informal sources of credit? Give three reasons. 

Or

Why is it necessary that banks and co-operatives increase their lending in rural areas? Explain.

Q3. Why do most rural households still remain dependent on informal sources of credit? 

Q4. What are benefits of SHG What is the basic idea behind the SHGs for the poor? 

Q5. Differentiate between formal and informal sources of credit?

Case Study Question

In recent years, people have tried out some newer ways of providing loans to the poor. The idea is to organize rural poor, in particular women, into small Self- help Groups and collect their savings. A typical SHG has 15 to 20 members, usually belonging to one neighbourhood, who meet and save regularly. Saving per member varies from 25 to 100 or more depending on the ability of the people to save. Members can take small loans from the group itself to meet their need. The group charges interest on these loans but this is still less than what the moneylender charges. After a year or two, if the group is regular in savings, it becomes eligible for availing loan from the bank. Loan is sanctioned in the name; of the group and is meant to create self- employment opportunities for the members. For instance, small loans are provided to the members for releasing mortgaged lands, for meeting working capital needs for housing materials, for acquiring assets like sewing machine, handlooms, cattle, etc.

1. Which statement is correct - 

i) SHG have mainly encouraged rural women to obtain credit. 

ii) SHG have helped women to become self-reliant. 

iii) SHG have helped women to discuss on relevant issues like health. 

iv) All of the above 

2. In SHG decide the savings and loan activity option. 

3.  85% of the loans taken by the poor households in the rural areas are from which of the following sources? 

i) Cooperatives 

ii) Government Banks 

iii) Informal Sources 

iv) Local bank 

Q1. How deposits with banks beneficial for individual as well as for the nation? Explain with example.

Q2. Define cheque.  

Q3. Who issues currency notes in India?

Answers 

Part A (1 Mark Questions)

To check all the detailed answers of the important question of CBSE Class 10 Economics Chapter 3 Money and Credit, download the PDF from the link provided below:

Practising these CBSE Class 10 Economics Important Questions for Chapter 3 – Money and Credit (2025–26) will help students gain conceptual clarity and answer confidently in exams. Regular revision, along with solving these questions, ensures strong preparation and higher marks in the CBSE Class 10 Board Exam 2026.

Also check:

CBSE Important Questions for Class 10 Economics (2025-26) Chapter 1: Development

CBSE Important Questions for Class 10 Economics (2025-26) Chapter 2: Sectors of the Indian Economy